Soaring Sorbitol Prices in January 2024 Driven by Increased Demand and Raw Material Costs

As the first month of Q4 unfolded, the Sorbitol market witnessed a significant surge in prices, propelled by a combination of increased demand, strategic inventory replenishments, and rising raw material costs.

The market dynamics for Sorbitol were set into motion as major players strategically placed bulk orders at the commencement of Q4 to replenish their inventories with fresh stock. This surge in demand, both domestically and internationally, contributed to a favorable trajectory for Sorbitol prices throughout January. One of the primary factors influencing the heightened prices in both exporting and importing regions was the surge in the prices of raw materials, particularly Corn starch and Feedstock corn. In Chinese provinces, the prices of Sorbitol rose in tandem with the escalating costs of raw materials. Late in January, a rebound in downstream demand for starch, coupled with low inventories of corn starch enterprises, led to a deviation in the price trend of corn starch from the domestic corn market price trend. This, in turn, supported the stable and robust operation of both the domestic corn starch and Sorbitol market prices.

The North American region experienced a similar trend, with the United States facing challenges in corn export business to Brazil, as the South American country expanded its output. Despite an active dispute between the United States and Mexico over the latter's proposal to curb genetically modified (GM) corn imports, Mexico secured a record volume of U.S. corn for shipment. This situation has impacted both the corn starch market and Sorbitol prices in the region.

Globally, the Sorbitol market, like many other industries, faced disruptions due to geopolitical disturbances in the Red Sea and the Suez Canal. The repercussions included a significant jump in freight prices and longer transit times around Africa, causing delays in product deliveries, including Sorbitol.

Contrary to these trends, European countries experienced a different scenario. Despite a slight rise in raw material prices, especially corn starch and upstream corn, the prices of Sorbitol in European countries maintained a downward trajectory. This can be attributed to an abundant supply and stable demand for Sorbitol, creating a supply-demand equilibrium that kept the Sorbitol market firm.

Looking at the global perspective, the forecast for foreign corn production has been raised, with increases noted for Russia, Ukraine, the European Union, and Egypt. These increases, however, were partially offset by reductions in Mexico and Canada. The dynamics of corn production in these regions play a pivotal role in shaping the Sorbitol market trends.

In conclusion, the increased prices of Sorbitol in January 2024 are a result of a complex interplay of factors, including heightened demand, strategic inventory replenishments, and rising raw material costs. The global Sorbitol market is navigating through challenges and opportunities influenced by geopolitical disruptions and regional production dynamics, creating a dynamic landscape for market participants to navigate.