Mixed Trends in Agar-Agar Prices Across Asian Markets: Decline in China, Rise in India

The prices of Agar-Agar showcased a mixed trend in the Asian Market. The prices declined in China due to the presence of adequate stock, weakened demand, and a slowdown of business activity. Due to the impact of extreme heat and intense rainfall, the demand for Agar-Agar is poor in China's domestic market. In contrast, the prices of Agar-Agar rose in the Indian market because of rising end-user demand, fewer inventories, and increased inquiries from the global market. Moreover, increased inquiries from the international market further contributed to the rise in Agar-Agar prices.

Agar-Agar is a jellylike substance and mix of carbohydrates widely used in Asian cuisines and is a vegan alternative to Gelatin. It also helps to gel, stabilize, and thicken beverages, baked goods, confectionery, salad dressings, dairy products, meat products, and sauces.

The price of Agar-Agar remained on the higher side in India due to the increase in prices of raw materials. Agar-Agar is extracted from red algae. Rising temperatures and climate change limited the harvesting and supply of red algae and raw materials such as seaweed. This increased the prices of raw materials, subsequently leading to a rise in Agar-Agar prices. The COVID-19 pandemic has made people more health conscious and prefer dietary supplements to boost their immune systems and maintain overall health. Agar-Agar is extensively used in several nutritional supplements, like vitamin and protein supplements. Also, consumers increasingly turn to plant-based substitutes to reduce their dependency on animal-based products. All these factors further contributed to the increase in Agar-Agar prices in India.

According to the National Bureau of Statistics (NBS), the official manufacturing PMI (Purchasing Managers' Index) stood at 49.3 in July, from 49.0 in June. However, this number still remained below the 50-mark, suggesting contraction instead of expansion. Factory activity in China fell for the fourth consecutive month in July as the world's second-largest economy struggles to regain growth momentum. The business activity and production activity declined because of insufficient domestic demand, which put downward pressure on Agar-Agar prices. In addition, the Chinese yuan appreciated against the US dollar in July decreased the export, and increased the availability of Agar-Agar in the Chinese market, supporting a further decline in prices.

As per the ChemAnalyst analysis, Agar-Agar prices will likely increase in the upcoming months due to growing demand from end-user food and pharmaceutical industries. In addition, improving trading activity will also support keeping the market stable. Apart from this, manufacturers are likely to bring new innovative products into the market that might impact the pricing dynamics of Agar-Agar across the Asian market.