Constraint Supply Escalates US Citric Acid Prices

USA: After a continuous decline in the prices of Citric Acid over the past few months, the US market of this product has gradually picked up steam from the beginning of January 2023. In addition, due to the absence of Citric Acid imports from major exporting nations, particularly China, prices are projected to rise throughout this month. The cost of Citric Acid is increasing in China; however, the country is not quoting the product's price in its own domestic market for now. The manufacturers are currently not accepting the orders due to the unstable and escalating price, thus making the imports less and further supporting the price increase in the US.

Considering China was taking a weeklong Lunar New Year break, exports of Citric Acid from China were delayed in January in the US, which impacted supplies. Manufacturing was halted due to the week-long closure of several industries. The demand from end-user industries surged, and the traders' remaining inventory was insufficient to meet consumer demands, further driving up the cost of the good.

Citric Acid is one of the most utilized food additives as it increases acidity, improves flavor, and safeguards the integrity of the contents. Citric Acid is a crucial ingredient for many different enterprises because of its benefits, particularly in the food and beverage sectors. 70% of Foods & Beverages, 20% of pharmaceuticals, 10% of dietary supplements, and 10% of cleaning products are reported to contain Manufactured Citric Acid (MCA). The prices were increased despite increased demand from end-user industries due to the low availability of the stocks in the local market of the USA.

The majority of US domestic merchants who had already stored up on Chinese Citric Acid in earlier months were nearly out of it, leaving low. Citric Acid prices in the US are also on the higher end due to the recent holiday season in the end-user industries and the pause in manufacturing inventories in the market.

The limited imports and high demand from end-user businesses, according to the ChemAnalyst database, will lead prices for Citric Acid to rise through the end of February 2023. Prices for Citric Acid are anticipated to stabilize following the pause in the first quarter of 2023.