Global Corn Starch Prices to Stay Elevated Due to Tight Feedstock Supply

The Corn Starch market in the North American and European regions continues to showcase an upward price trajectory due to the high cost of feedstock Corn and its tight supply. The late sowing in the United States, the cold weather, and the ongoing war in Ukraine are some of the main reasons that have affected the production and pricing of feed Corn. Another factor in the price surge of Corn Starch is the record-low temperature, as moisture content increases in this timeframe, which has affected previously accumulated inventories among regional manufacturers.

Corn production in the United States., the world’s major producer and exporter of Corn, was badly affected by an intense snowstorm in late December. Although the production of Corn has climbed by around 11% over the past five years, it has not yet caught up with the 14% growth in demand. As Corn remains short in supply, the rising price of Corn is being observed, resulting in an increased production cost for Corn Starch. Thus, the prices of Corn Starch in the United States increased by more than 5% over the course of January.

In the European region, the supply of Corn was severely hampered during the last year because of the war in Ukraine and supply-chain disruptions. However, the region’s ability to import grain from Ukraine is impacted, and restoration to normality is anticipated to take longer. The European Corn Starch market faces feedstock challenges, resulting in higher prices for downstream products. Although the supply of Corn Starch in Germany is still showing a modest decline, rising demand from the global market is driving up prices. As producers fulfill the constant orders of foreign purchasers from the existing stocks, traders raise the export price to recoup their profit. As a result, FOB Corn Starch prices in Germany increased by about 6% in January.

The ChemAnalyst team predicts a rise in US Corn Starch prices in the upcoming months. The domestic market will experience a shortage of Corn Starch due to accessibility issues of feed inventory, which will cause price patterns to shift. Moreover, high demand from major downstream food and pharmaceutical industries will also lead to a price hike.