Monosodium Glutamate (MSG) prices rose in March following the period of price surge in the previous month. The major underlying factor for this price revision is the rising price of corn globally which has reflected directly in the production expense of glutamic acid, an important precursor to MSG. Industry analysts believe that this trend may continue for some months before the possibility of stabilizing during summer when demand tends to ease off.

The increase in the price of MSG can be attributed directly to the rising cost of corn. Corn is the main raw material used in the production of glutamic acid by the process of fermentation. Since glutamic acid is a critical ingredient in the manufacture of MSG, any increase in its cost of production automatically results in higher prices for MSG. The market has witnessed an upward pressure on the price of corn which has resulted in an increase in manufacturing costs of MSG manufacturers globally.

This increase in prices of corn is due to an increase in demand across various industries such as food, biofuels and animal feed. Across South America, the second harvest of corn occurs later in the year. These factors when combined have brought about a short-term shortage in the global market that has driven up the price. Consequently, the cost of production for MSG has increased to drive up the market prices across the world.

ChemAnalyst anticipate that the recent trend of increasing MSG prices is expected to follow through in the coming months. The consistent strong demand for corn and continued worldwide supply chain problems indicate that production costs for MSG will continue to be high. But as summer nears and MSG usage normally slows down there is possibility for price stabilization to occur in the second half of the year.

ChemAnalyst suggests that suppliers and purchasers of MSG should employ strategic strategies to offset risks and seize opportunities. Purchasers should try to obtain long-term purchase agreements from suppliers to lock in future price fluctuations. It is suggested that MSG suppliers should try to expand their client base and streamline production cycles to keep prices competitive in the market. Having this knowledge of the market trend will help market participants to make better decisions and maintain a good share of profit.

The international MSG market remains closely intertwined with corn price trends and market players should remain alert to learn from these changing economic situations. With prices constantly changing, anticipation of market trends will be key to sustaining stability and profitability in the MSG industry.