Global Agar-Agar Prices Likely to Rise in October 2023 Amidst Supply Chain Disruption

Global Agar-Agar prices are expected to rise in October 2023 as the market is experiencing limited supply.  However, demand from the food and beverage industry remained stable in both domestic and international markets, supporting the rising trend in Agar-Agar prices. The availability and procurement of raw materials, especially seaweed, are necessary to manufacture Agar-Agar. Supply-chain interruptions will likely affect production, which would raise the overall manufacturing cost and increase Agar-Agar prices.

In China, manufacturing activities are slowed down at the beginning of October due to the annual "Golden Week" holiday. The country is on vacation, resulting in business closures and a probable 14-day pause in manufactured goods production and shipping. This might lead to supply chain disruption and increased air and ocean freight prices and other logistical services, subsequently increasing the Agar-Agar prices.

According to most recent data, German inflation is projected to decline dramatically, potentially heralding the end of a period of elevated inflation that has weighed heavily on Europe's largest economy. The Governing Council believes that the key European Central Bank (ECB) interest rates have reached a level that, if sustained for an extended period of time, will significantly contribute to the prompt return of inflation to target. This could help gain consumers' confidence, supporting the upward trajectory of Agar-Agar prices. Meanwhile, eurozone energy prices are also anticipated to ease in October, further supporting increasing market demand and rising Agar-Agar prices.

In October, a similar trend in Agar-Agar pricing is expected in the United States. The US economy has shown extraordinary resilience despite being subjected to one of the most rigorous periods of monetary tightening in recent history, fueling expectations that the world's largest economy may have a "soft landing." Inflation is expected to be mild, which might result in positive consumer sentiments and a rise in Agar-Agar prices. However, the trading relationship between China and the USA has been suspended due to the extended holiday period in China, resulting in a decrease in the export volume to the US market, which in turn led to a decrease in the supply of Agar-Agar in the USA market, supporting the upward trajectory.

The ChemAnalyst predicted that Agar-Agar prices will likely reduce after October due to increased supply and stable demand from end-user sectors. Inflationary pressures in the United States and Europe are expected to lessen further, prompting central banks to hold interest rates level steady, resulting in stable market demand for Agar-Agar. However, manufacturing operations in China are anticipated to accelerate in the coming months to meet requests from local and foreign markets before the Christmas holidays, resulting in an adequate supply of Agar-Agar and keeping the market situation on the south side.