Local Manufacturing in China Seems Gloomy, What Does It Mean For Food Additives

From the onset of the pandemic through the upheaval caused by the war in Ukraine, everyone has their anecdote to share about supply chain issues that have impacted the global economy. Orders placed on global e-commerce platforms such as Amazon and Walmart were effectively delayed due to virus lockdowns and limitations in some of China's key manufacturing hubs, wreaking havoc on the worldwide economy. 

Chinese sellers certainly became ubiquitous on these online platforms and due to the fear of loss aversion, they often specialized in cheaper versions of everyday goods, including several Food and beverages items. The market of Food and Beverages usually remains quite stable, but China's lockdown scenario has taken a toll on the business. As the factories went under maintenance in the last week of May, the prices of Food Additives are likely to increase in the country.

Although China's businesses continued to struggle in May, the slower rate of loss signals that the worst of the country's present economic woes may be behind us as the country eases off on its harsh lockdowns. As per the data provided by the National Bureau of Statistics on Tuesday, the official manufacturing purchasing managers index increased to 49.6 from 47.4 in April.  

While the Chinese economy hasn't fully recovered yet, the better-than-predicted statistics suggest that attempts to pardon the restrictions are assisting businesses in resuming production and putting a floor under the slowdown. Even still, this time around, the recovery will be gradual, with economists predicting that GDP would slip to 4.5 percent this year, significantly below the government's aim of roughly 5.5 percent. 

According to ChemAnalyst, after the manufacturing plants resume operations following the maintenance, pricing and demand for food Additives in the Chinese domestic market would progressively climb. As the warmer season approaches, it is expected that sellers would boost their quotations in response to increased demand from the food and beverage businesses.