Rising End-Use Demand Drives German Tryptophan Prices in September 2023

Tryptophan prices rose in the German market due to rising demand from end-users and insufficient stock levels among market makers and merchants in September 2023. Recently, the cost of raw materials, such as corn and soybean, also climbed in September, supporting the increasing trajectory of Tryptophan prices. As September arrived, early maturing maize was identified, and the fresh maize had reached the entire harvest stage by the end of the month. The inventory of old maize was also reduced due to increased demand from end-users at the beginning of the month, which also impacted Tryptophan supplies globally, resulting in increased costs.

China is the biggest exporter in the European market. As the Golden Week draws near, many businesses in China speed up production and ship their goods before the public holidays, which subsequently caused a sudden surge in demand from both the domestic and international markets and raised Tryptophan prices. In addition, the increased demand for transportation also placed additional strain on logistics services, which drove Tryptophan prices even higher.

German inflation fell to its lowest level in September since Russia started its full-fledged invasion of Ukraine, signaling the end of the high inflation that has weighed hard on Europe's largest economy. According to preliminary figures from the Federal Statistics Office, German consumer prices grew by an annual 4.3% in September compared to other European Union countries. The ease of inflation led to positive consumer sentiments and increased Tryptophan prices. However, rising oil prices and rapid wage growth are raising concerns that inflation will remain consistently above the ECB's 2% target, forcing the bank to keep interest rates higher for longer and causing transportation costs and business expenditures to rise, further increasing Tryptophan prices.

According to ChemAnalyst analysis, Tryptophan prices are projected to grow further in the next few months due to persistently higher demand from end-users and the availability of fewer stockpiles in the market. China is one of the world's largest manufacturing nations, and its drop in output volume influences the global supply chain. During the Golden Week and Mid-Autumn season, many companies and manufacturing units in China will shut down, halting output and disrupting both local and international supply chains. This would further constrict freight space and raise ocean freight and airfreight rates, resulting in increased Tryptophan prices. Aside from that, it is forecast that German inflation will continue to reduce, reaching 3% by the end of the year, which would boost consumer confidence and contribute to the expansion of the Tryptophan industry.