Global Gelatin Prices Surge in March Amidst Rising Demand and Supply Pressures

The prices of Gelatin experienced a global upturn in March, continuing a trend seen in the preceding months. This escalation is driven by increased demand across several sectors including food, pharmaceuticals, and cosmetics, exacerbated by declining inventories within the market. In response, manufacturers have augmented production efforts to meet the rising demand for Gelatin, bolstering overall market sentiment.

In March, China's manufacturing sector experienced a significant turnaround, rebounding after five consecutive months of contraction. The official Purchasing Managers Index (PMI) surged from 49.1 in February to 50.8, signaling a resurgence in industrial activities following the Lunar New Year celebrations. The National Bureau of Statistics (NBS) observed increased market activity as companies boosted production post-holiday season. Notably, both manufacturers' output and new orders expanded at an accelerated rate. Furthermore, there was a notable uptick in external demand, driving new export orders to their highest level since February 2023. Overall, demand improved from both domestic and overseas markets, contributing to the upward movement of Gelatin prices.

Additionally, the upcoming Qingming Festival and Cold Food Festival, both celebrated in April, are traditional holidays in which families come together to prepare special foods. Gelatin holds a prominent place in Chinese cuisine during these festivals, being utilized in various jellied dishes, desserts, and broths. Anticipating the surge in demand during these festivities, manufacturers and distributors likely began stockpiling Gelatin inventories in March. This heightened buying activity exerted pressure on existing supplies, thereby driving Gelatin prices upwards.

As China plays a significant role as a major Gelatin exporter, a comparable pricing trend is evident in the USA market. Moreover, recent data indicating a surge in US business activity in March, marked by a rebound in orders after six months, along with indications of potential inflation easing, has further contributed to the upward momentum in Gelatin prices. Additionally, concerns have been raised by the National Oceanic and Atmospheric Administration regarding the Mississippi River, which faces the risk of bottlenecking for the third consecutive year due to warm, dry spring weather and low winter snowpack, limiting water flow. To mitigate potential shortages and ensure supply continuity, distributors and businesses have been placing large orders for Gelatin. This heightened demand is motivated by the need to stockpile inventory and pre-empt potential delays, thereby exerting upward pressure on prices.

During March, India's manufacturing sector witnessed a substantial upturn, indicating significant improvements in business conditions and robust expansion in manufacturing activity. The March report underscored a notable surge in the growth of new orders, reaching its highest pace in almost three and a half years, attributed to reports of vibrant demand conditions. This favorable momentum has propelled Gelatin prices upward in the Indian market.

According to ChemAnalyst's assessment, Gelatin prices are expected to continue their upward trajectory, propelled by a sustained surge in demand across multiple end-user sectors. Moreover, increased inquiries from the global market are predicted to amplify this upward momentum. As a result, market participants are likely to adjust their pricing strategies to capitalize on this trend, fostering a positive outlook within the market.