Rising Inflation and Tight Feedstock Raise the U.S. Gelatin Prices

At the end of October, a 7.7% ease in persistent inflation that plagued the U.S. economy raised hopes that price increases have begun to slow. Still, it seems to be delayed as the effect of inflation will not resolve so quickly. Returning inflation to normal levels will take some time. Therefore, in November 2022, Gelatin continued showcasing a surging price trajectory in the U.S. However, prices of Gelatin have risen around 3.3% for (BS-150) and 1.1% for (BS-220), respectively. As a result of continued demand from the end-user sector last month, the need for more inventories in the domestic market was seen.

The overall inventories of the product remained tightened, propelled by the rising use in producing collagen along with the increase in medium and high bloom Gelatin use because of its applications in the Pharmaceutical and Nutraceutical sectors. Consequently, Gelatin manufacturers decided to raise the quotations in U.S. domestic market to maintain their profit margin.

It is not just the ongoing pace of increase that is troublesome but surging feedstock such as pig skin and bovine bone prices across the globe that have scarred the Gelatin manufacturers. Also, feedstock availability for Gelatin in the U.S. was sluggish because of delayed imports amid trucker shortages. Furthermore, logistics prices have increased, mainly due to stuck containers at sea or ports and a lack of workforce to offload from the ships. As a result of the tight feedstock supply in the U.S., the production of Gelatin in industrial plants is affected.

According to ChemAnalyst, the Gelatin prices might decrease in the coming month due to weak demand from the end user's food sector as the country is heading into the Christmas holidays. While the government has requested enterprises to reduce their electricity consumption to preserve electricity for the domestic industry during the winter months, output rates will remain low owing to the energy crisis.