Global Potato Starch Prices Expected to Drop Amid Waning Consumer Confidence

Prices of Potato Starch are expected to reduce globally in October 2023. This projection is attributed to a combination of factors: the prevailing subdued sentiments among consumers, the ease of inflationary pressures, and the ample availability of supply in the market. Furthermore, the fluctuations observed in the prices of potatoes, which serve as the primary source for Potato Starch production, have also influenced market dynamics.

An official measure of China's manufacturing activity unexpectedly slipped into the contraction area in October after climbing to the expansion zone for one month, indicating continued deterioration in the sector. According to the National Bureau of Statistics, the official manufacturing purchasing managers' index (PMI) decreased to 49.5 in October from 50.2 in September. The surprise decrease in manufacturing PMI suggests that China's recovery is on a rocky path as domestic demand remains weak, which may keep Potato Starch prices low in China. The new-orders subindex decreased to 49.5 from 50.5 in September, while the new-export-orders subindex fell to 46.8 from 47.8.

Inflation in Germany fell substantially in October, falling to its lowest point since August 2021, indicating a significant cooling in eurozone headline inflation. In Germany, inflation, as measured by the change in the Consumer Price Index (CPI), fell to 3.8% year on year in October from 4.5% in September. This might result in decreased production costs and a drop in Potato Starch pricing. The European Central Bank (ECB) kept interest rates constant at 4%, which is anticipated to weigh on consumer purchases, causing Potato Starch prices to fall. Furthermore, new data indicate that Germany may already be in a recession, as business activity fell for the fourth consecutive month in October. This might be due to weaker local and international demand, supporting a downward trend for Potato Starch.

The US economy is anticipated to experience a slowdown in its pace in the upcoming months, as a considerable portion of economic productivity is projected to be influenced by a reduction in domestic consumption and a decline in consumer expenditures. Consumer confidence in the United States decreased for the third month in a row in October as increasing interest rates and persistent inflation weighed on consumer optimism, contributing to the reduction in Potato Starch prices. According to preliminary data, consumer confidence fell from 68.1 in September to 63 in October, falling short of the projected 67.2 and reaching its lowest level since June.

According to ChemAnalyst, Potato Starch prices are projected to fall further in the coming months due to constant reduced demand from end-users and enough supply in the market. In addition, central banks are anticipated to uphold elevated interest rates, potentially resulting in subdued demand and, consequently, reduced prices of Potato Starch. Furthermore, trade operations are expected to improve, perhaps maintaining an adequate supply of Potato Starch in the market.