Global Agar-Agar Prices Surge in November Amid Increased Demand and Trading Shifts

In November 2023, Agar-Agar prices experienced an upward trend in the global market. This surge can be attributed to increased inquiries from downstream industries, a decline in trading activities, and a reduced availability of inventories in the market. Given its gelling and stabilizing properties, Agar-Agar finds application in the cosmetic industry, particularly in the formulation of lotions, creams, and gels. As the winter season unfolds, the personal care industry has witnessed a notable surge in the demand for Agar-Agar, consequently driving prices higher.

In China, Agar-Agar prices experienced an uptick, driven by a moderate increase in new orders from the domestic market. The overall market sentiment demonstrated an improvement compared to the previous month, evident in the expanded supply and demand dynamics, enhanced logistics, heightened purchasing volumes, and a more optimistic outlook among manufacturers. Additionally, the upward trajectory of Agar-Agar prices was reinforced by a steady and accelerated growth in new business orders received by Chinese producers, particularly from major export destinations such as the USA and Germany.

In the United States, consumer confidence rebounded in November after three consecutive months of decline. This resurgence was fueled by increased retail sales across the US market, notably impacting the Agar-Agar market. Despite elevated interest rates, consumers exhibited a readiness to spend, especially during significant shopping events like Cyber Monday and Black Friday. The heightened consumer activity boosted overall demand for Agar-Agar in the food and cosmetic sectors, subsequently leading to an upturn in prices. Furthermore, the depreciation of the US dollar against the Chinese yuan in November posed a challenge to imports from China, resulting in a restricted supply in the US market and pushing the Agar-Agar prices upward.

In November, the manufacturing industry in India sustained its strong performance, with output showing a renewed growth momentum. The sector's success continued to hinge on firms' effective acquisition of new domestic and international businesses, contributing to the upward movement of Agar-Agar prices. Agar-Agar is a popular vegetarian and vegan culinary alternative, particularly as a substitute for Gelatin. Its widespread use spans dairy products, bakery items, desserts, and candies. The Indian food sector experienced a surge in November, driven by major festivals like Diwali that significantly heightened the overall demand for Agar-Agar and increased prices.

The ChemAnalyst expects a decrease in Agar-Agar prices in the upcoming months owing to a reduction in demand from end sectors and an abundant supply in the market. However, there is a possibility of a significant price rise at the beginning of FY24, driven by the revival of demand from the end-user food and pharmaceutical industries, indicating a positive market outlook for Agar-Agar.