The prices of Agar-Agar are expected to remain at the higher end globally by the end of January. Agar-Agar, a plant-based alternative to gelatin, is derived from seaweed and functions as a stabilizing and thickening agent. It is widely used across the food, pharmaceutical, and cosmetic industries.

Key Takeaways:

• Resurgence in food and pharmaceutical industries is driving demand for Agar-Agar.
• Strengthening Yen and anticipation of supply shortages are leading to increased Japanese imports.
• Robust domestic demand, along with a rise in export orders, is contributing to significant price hikes for Agar-Agar in India.
• Potential supply disruptions in China due to the Lunar New Year could further push prices up.

In China, the world’s largest producer of Agar-Agar, prices are projected to climb due to a rise in demand end-user food and pharmaceutical industries. As these sectors begin to recover from earlier slowdowns, demand for Agar-Agar is anticipated to increase, pushing prices upward.

Also, the approach of the Chinese Lunar New Year, typically a period of increased consumer spending and heightened demand in the food sector, is likely to further drive demand. As factories prepare for extended closures during the holiday period, the build-up of stock in anticipation of the break may create temporary supply shortages, pushing prices even higher. The seasonal demand for Agar-Agar-based food products such as desserts and snacks could further elevate market prices.

In Japan, which relies on importing Agar-Agar, prices are also expected to rise. The strengthening of the Japanese yen has made imports more affordable, enabling buyers to purchase larger volumes from China ahead of the Chinese Lunar New Year holiday. This surge in orders from Japan has sustained high demand, as importers work to replenish inventories in anticipation of potential supply shortages, further driving up Agar-Agar prices.

Similarly, in India, the Agar-Agar market is projected to see price increases due to sustained consumer demand. This heightened demand has created favorable conditions for increased sales, driving upward pressure on Agar-Agar prices. Additionally, the surge in new export orders, the fastest growth since July 2024, indicates strong international demand for Indian-manufactured goods, further contributing to the rise in Agar-Agar prices.

The depreciation of the Indian Rupee (INR) against the US Dollar has also been a key factor, making exports more affordable for foreign buyers. This has helped sustain high demand and supported the upward trend in prices. As global markets recover and demand continues to rise, Indian manufacturers have capitalized on the opportunity, adjusting their pricing strategies to align with the improved market conditions.

Overall, the continued demand from key sectors, combined with supply-side challenges in major production areas, points to a positive and bullish outlook for Agar-Agar prices in the near term.