During April 2024, the domestic Propionic Acid market in India witnessed a significant increase in prices, driven predominantly by various factors. These factors included heightened demand from downstream food preservative sectors, elevated import prices from China, supply disruptions within China, and escalated prices of key feedstock ethylene and upstream crude oil. Together, these elements exerted significant upward pressure on Propionic Acid prices in the Indian market.

The demand for Propionic Acid surged notably in India, particularly within the food industry, signaling a positive trend. This heightened demand from the food industry contributed to increased utilization of Propionic Acid as a food preservative, aligning with rising consumer spending patterns. Globally, the United Nations Food and Agriculture Organization reported a noteworthy rebound in global food prices. Specifically, notable increases in vegetable oils and dairy products led to a substantial recovery in the FAO's food price index, which reached 118.3 points, indicative of improved market conditions. This growth trend was concurrent with India's strong economic performance in the first quarter of 2024, characterized by robust GDP growth driven by expansions in manufacturing and increased industrial production.

Furthermore, a series of disruptions in the feedstock ethylene supply chain occurred globally throughout April, with notable plants such as PTT Global Chemical Public Company Limited in Saudi Arabia, Shell Chemicals in the USA, and Long Son Petrochemicals – LSP in Vietnam shutting down. These closures exacerbated raw material shortages, consequently driving up ethylene prices worldwide. The resulting increase in production costs for Propionic Acid manufacturers prompted them to escalate production to meet escalating demand, both domestically and abroad.

Additionally, geopolitical tensions in the Middle East, coupled with OPEC's supply cuts, further bolstered crude oil prices, intensifying market conditions. Concurrently, severe weather events, including heavy rains and floods in southern China's Guangdong province, disrupted the supply chain for various petrochemicals, including Propionic Acid, leading to supply shortages and subsequent price hikes. These disruptions, compounded by challenges in regional transportation and business interruptions in flood-affected areas, posed significant obstacles to production and distribution across China.

Moreover, heightened procurement activity among Indian buyers in anticipation of the Labor Day holiday in China from May 1st to May 5th amplified the upward pressure on Propionic Acid prices in the domestic market, as buyers sought to replenish their inventories amidst concerns over limited availability and potential price fluctuations during the holiday period. Overall, amidst these dynamics, market sentiments remained positive. As of April 2024, the assessed price for Propionic Acid stood at INR 103875/MT Ex-Ahmedabad, reflecting a substantial 21.5% increase from the previous month. According to ChemAnalyst data, Propionic Acid prices are expected to continue increasing in the coming weeks until the supply disruption normalizes, and shutdown of plants resume production and strengthen supply dynamics.