Prices for Sorbitol in the US are Probably Going Up. Why?

USA: The price of Sorbitol is likely to increase in the US domestic market due to an increase in demand from the end-use sectors, primarily pharmaceuticals. Sales of US pharma had declined during the previous few weeks, but large Chinese purchases of fresh Maize (the raw material for Sorbitol) and even some old-crop businesses have partially helped revive the US market.

Previously the US Drought Monitor showed that the country was experiencing unusually dry to extreme drought conditions. According to the source, this affected region has mostly been unusually dry weather for a long time. During the last week of October 2022, the prices for Corn increased as farmers faced challenges as dry weather continued in the US. Moreover, there may be an opportunity for even more old-crop US Corn exports to China, but the final tally will be significantly influenced by the upcoming harvest in Brazil and the future of the country's shipments. The supply chain could be further hampered, as a result, raising the cost of corn derivatives, particularly Sorbitol. Due to this, Sorbitol may become more expensive in the US market as the demand for pharmaceuticals is consistent.

Furthermore, the average prices of February's new-crop futures, including Corn, particularly Sorbitol, serve as insurance guarantees for the next harvests for US farmers. Although both are historically robust, Corn now has a competitive advantage over other grains compared to last year, which is why the market anticipates an increase in Corn acres in 2023 while beans may remain level. This would give the pharmaceutical industry even more peace of mind, but it cannot guarantee the low demand for Sorbitol.

As per the ChemAnalyst database, the prices of Sorbitol will be increasing in the upcoming months, backed increase in demand from China. Moreover, the demand for Sorbitol would follow an upward trajectory until there is stability in demand from the end-use sector, including pharmaceutical companies.