Anticipate Positive Price Momentum for Potassium Sorbate in the US as 2023 Ends

Potassium sorbate widely utilized as a preservative in the Food and Beverage (F&B) industries is expected to experience a modest upswing in the United States during December 2023. The trend, driven by a surge in demand for packaged and processed foods ahead of the holiday season, is anticipated to exert upward pressure on Potassium sorbate prices throughout the month.

As the year concludes, an increase in demand for Potassium sorbate across various F&B sectors is expected to rise at a moderate level. Market participants have noted a prior decrease in prices in recent months, prompting them to focus on destocking their Potassium sorbate inventories significantly until the end of December. Subsequently, they plan to restock their warehouses with newer stocks. With the holiday season in full swing, manufacturers are gearing up to meet heightened production requirements, placing additional strain on the available Potassium sorbate inventory.

Moreover, fluctuations in the price of key raw material used in Potassium sorbate manufacturing including sorbic acid, have played an important role in the upward trajectory of prices. As the cost of upstream sorbic acid is expected to drop further in December, manufacturers may experience increased availability, supporting the overall rising price trajectory for Potassium sorbate. A drop in raw material prices can increase profit margins, allowing manufacturers to potentially maintain selling prices while reducing production costs. This, in turn, leads to higher profit margins and enables them to reinvest in the business, improve product quality, or even lower prices further to stimulate demand. Secondly, it can enhance affordability and demand for end-products like Potassium sorbate, as lower raw material costs make the product more affordable for consumers, leading to a rise in demand, which can put upward pressure on prices as manufacturers seek to meet the rising demand.

Supporting evidence for this is the fact that continuous problems with global supply chains have affected the availability of various raw materials, including those needed to make potassium sorbate. Increased shipping delays and logistical problems have resulted in a shortage of supplies. This may also explain higher freight costs, as December is traditionally the busiest month for shipping due to holidays and peak season demand for processed and packaged food in major importing nations. This can result in higher demand for certain excipients like potassium sorbate and tighter capacity, driving up prices. Further supporting this, in December, gas prices, a significant cost element for shipping companies, may increase once more and be passed on to shippers in the form of higher rates. Stakeholders, however, are cautiously optimistic, viewing the current state of affairs as a normal part of the market's ups and downs and anticipating stabilization in the upcoming months.