European Soya lecithin Prices Set for a Rebound in March 2025 Amid Supply Constraints
- 25-Mar-2025 3:00 PM
- Journalist: Gabreilla Figueroa
As per the market experts, after a notable 10% decline in February, the European soya lecithin import market poised for a steady price increase in the month of March 2025. This anticipated uptrend is driven by several interrelated factors impacting both supply and demand dynamics.
Different market experts' reports that demand for soya lecithin is likely to experience a steady recovery in different industries. First, throughout the whole month, food processing, bakery, confectionery, and infant nutrition industries continue to depend much on lecithin's emulsifying and stabilizing characteristics. Second, the pharmaceutical and dietary supplement industries show robust increase in soya lecithin, especially for application in soft gel and encapsulation purposes. Animal nutrition industry also has an influence, applying lecithin in boosting nutrient digestibility in cattle. This long-standing demand with tight supplies for soya lecithin drives the price up. Additionally, stability in the ocean freight market and expected reduction of rates post Lunar New Year heavily influence the soya lecithin industry. Yet, uncertainties remain due to geopolitical matters in areas such as the Red Sea and changing trade policies, especially the United States' trade policies.
Logistical inefficiencies in major ports have raised storage and handling expenses, affecting commodity shipments like soya lecithin, thus also trades across the importing countries themselves, especially from the european region increasingly looking to sell their products at a higher price. All these contribute to ongoing logistical issues, such as shipping delays and higher transportation expenses, which consequently affect overall price structures. In addition, supporting to this additionally, previous reduction in Soybean Crushing in production countries, such as the India further estimates soybean reduction which is expected to support the trend increase in soya lecithin as demand improves. As between October 2024 and January 2025, across the Apac region, particularly in India, a major producer of non-GMO soya lecithin, witnessed a significant drop in soybean crushing activities. This decreased crushing activity led to an estimated reduction of around 3,500 to 4,000 tons in the production of lecithin. However, with weakened purchasing, initially the market remained steady with demand successfully balanced with the supply side. However, as the market moves forward with a recovery in downstream purchasing the importing sentiments of Soya lecithin improve which may further impact the trade side ahead of reduction in inventory level among the trades, rising the necessity for newer procurements with respect to the soya lecithin.
In total, the European soya lecithin market is anticipated to move from a phase of price reduction to one of gradual growth. The integration of lowered production in the major sourcing areas, continued demand in various industries, and convenience in freight cost with currency fluctuation across the importing countries, thus favorable to downstream consumers indicates that prices will rebound significantly but at a gradual pace soon including those for soya lecithin. Industry players are advised to keep abreast of these developments and make strategic adaptations to their sourcing and manufacturing strategies in order to best ride the changing market tide.