For the Quarter Ending September 2024
North America
During the third quarter of 2024, the North American wheat starch market experienced relative stability, paralleling trends seen in Europe. Pricing remained mostly flat, with a slight uptick toward the end of the quarter. Consistent production levels across key hubs kept the market balanced despite fluctuations in supply and demand. Subdued demand from sectors such as food processing and pharmaceuticals influenced market dynamics, with end-users adopting a cautious approach and focusing on need-based purchasing rather than restocking inventories, reinforcing bearish market sentiment.
Cost pressures from the downstream industry rose, causing reluctance among traders to engage in fresh procurements. However, as the quarter approached its conclusion in September, a moderate rise in wheat starch prices was observed, driven by increasing demand from the food, pharmaceutical, and industrial sectors. Health-conscious consumers spurred higher demand in the food industry for high-quality ingredients, while the pharmaceutical sector showed increased consumption of wheat starch for its use as a binding agent and stabilizer in drug formulations.
Despite this late-quarter demand surge, supply chain disruptions and rising production costs presented challenges. The overall market outlook remained weak, with oversupply conditions and subdued demand keeping prices settled at USD 745/MT CFR New York. This combination of factors led to a cautious market sentiment, with traders and manufacturers navigating fluctuating conditions throughout the quarter.
Asia Pacific
Across the APAC region, Q3 2024 witnessed a challenging period for Wheat Starch pricing, marked by an overall downward trajectory in market prices. Several significant factors contributed to this downward trend. Weak demand from both domestic and international markets played a crucial role, resulting in oversupply and surplus inventory levels. Additionally, competitive pricing strategies among exporting countries further intensified pricing pressures. The market also faced uncertainties related to economic conditions and geopolitical issues, adding complexity to the pricing environment. In India, where the most significant price changes were observed, the Wheat Starch market experienced notable fluctuations. Seasonal shifts, coupled with rising input costs, influenced price dynamics. The correlation between demand patterns and supply dynamics was evident, with strategic adjustments made to balance market equilibrium. Despite challenges, market resilience and adaptability were notable features during the quarter. However, the prices demonstrated a modest upward trend at the end of the quarter supported by improved inquiries from the regional market. Overall, the quarter recorded a -3% decrease from the previous quarter, reflecting the prevailing negative sentiment and culminating in a closing price of USD 85600/MT of Wheat Starch Ex- Ahmedabad in India.
Europe
While on the European market side, during the entire Q3 2024, the Wheat Starch market in Europe witnessed relative stability in pricing, with Germany experiencing the most significant price changes. Various factors influenced market prices, including stable production costs, subdued demand in key sectors, and oversupply challenges. The overall trend in the region indicated a balanced supply-demand scenario, with pricing dynamics remaining relatively flat and a steady upward trend at the end. Ahead of higher supplies witnessed by market participants, manufacturers cut production volumes accordingly at the second-quickest rate in the past six months in key producing nations further impacting the overall market trading atmosphere and the import prices. Lastly, market transactions continued to remain muted with the industry only focused on the needly basis. This as a result considerably creates a supply-demand imbalanced scenario with trading sentiments leaning on the southerly side. Germany, as a key player in the market, saw fluctuations in prices, albeit within a stable range. The correlation between price changes from the same quarter last year and the previous quarter in 2024 remained consistent at 2%. The quarter concluded with Wheat Starch prices at USD 765/MT CFR Hamburg in Germany, reflecting a stable pricing environment overall.
For the Quarter Ending June 2024
North America
In the second quarter of 2024, the North American Wheat Starch market experienced a persistent price rise, driven by an array of influential factors. The quarter was marked by significant supply-side disruptions and a higher-demand environment. Additionally, geopolitical tensions resulted in higher freight charges and contributed to a rise in overall shipment costs which further affected the overall trading sentiments and prices to rise considerably.
Focusing on the USA, which witnessed the most pronounced price adjustments, the Wheat Starch pricing environment revealed a consistent positive trend following the European region. The overall market sentiment was balanced by moderate inventories and higher purchasing activities. The end-user sectors, grappling with increased inflationary pressures, further support the higher prices of commodities including wheat starch for consumers.
On the other hand, the recent upward trend in feedstock i.e., wheat prices has inevitably led to increased production costs for Wheat Starch manufacturers. Elevated input costs and import prices reinforced the upward trajectory of Wheat Starch prices. Overall, following the market trend of other nations, the US also witnessed a mixed trajectory concerning wheat starch with a rise on an average basis when compared to the previous quarter.
Asia Pacific
In the APAC region, Q2 2024 has been characterized by a pervasive downturn in Wheat Starch prices, driven by multifaceted market forces. Predominant factors influencing this decline include elevated inventory levels, subdued demand across key sectors, and heightened transportation costs. Economic conditions, marked by inflationary pressures and a cautious purchasing sentiment, further exacerbated the price reduction. The influx of new manufacturers intensified competition, compelling incumbent players to reduce prices to maintain market relevance. Focusing on India, the nation witnessed the most significant price fluctuations during this quarter. A confluence of regional demand shifts, economic constraints, and increased freight costs played pivotal roles in this downward trend. Seasonality factors, such as anticipated higher supplies of feedstock wheat, led farmers to delay trading, anticipating future price escalations. Consequently, limited wheat availability within key producing mills pressured prices further. The market's overall trend demonstrated a consistent decrease, with prices in the first half of the quarter reflecting a more pronounced drop than in the latter half. No major plant shutdowns or disruptions were reported, yet the cautious approach by traders to avoid escalating storage costs underscored the negative sentiment. Comparatively, the price environment in Q2 2024 has been overwhelmingly negative, culminating in a quarter-ending price of USD 86700/MT for Wheat Starch in India. This continuous decline underlines the market's sensitivity to supply-demand imbalances, operational costs, and economic uncertainties, necessitating strategic agility among stakeholders to navigate this challenging landscape.
Europe
In the second quarter of 2024, Wheat Starch prices in the Europe region experienced a significant upward trajectory. This quarter's market saw a culmination of higher production costs, increased downstream purchases from end-users, and logistical disruptions. Key factors driving this surge include increased fuel prices, robust shipping demand, and operational expenditures for carriers due to geopolitical tensions resulting in ship schedule delays and container shortages. Furthermore, the depreciation of the US dollar against the euro added complexity, making Wheat Starch imports relatively cheaper in euros, further boosting procurement activity. On the other hand, the supply chain bottlenecks exacerbated by the Houthis' campaign and ship schedule delays around Africa's Cape of Good Hope introduced unpredictability, pressuring European markets in terms of product availability. Germany, in particular, observed the most pronounced price changes throughout the quarter. The nation grappled with limited inventories and delays from major producing regions, prompting domestic participants to raise prices to ensure maximum profit margins. The German market displayed a strong upward trend, influenced by high consumer sentiment and increased local purchasing activity amidst rising inflation. Seasonality factors contributed to price volatility, with a notable surge in the second half of the quarter as compared to the first. As a result, the overall trend in Germany showcased a consistent and significant price rise, correlating with global market dynamics and regional economic conditions. Conclusively, the quarter-ending price for Wheat Starch in Germany was USD 770/MT, underscoring a predominantly positive pricing environment driven by complex market factors and persistent supply chain challenges.
For the Quarter Ending March 2024
North America
Following the market trajectory of the European region, the prices of Wheat Starch demonstrated an overall downward trend across the North American region, primarily in the United States. This downward trend was influenced by several factors, including bearish inquiries from neighboring markets and muted demand from the regional sector. Moreover, the increased availability of stock among competitive exporting nations in the European market played a role in the price decline, with the USA aligning its market trajectory accordingly. Consequently, the substantial decrease in prices in the European region influences overall market sentiments in the United States. However, the market witnessed resiliency as February 2024 commenced demonstrating a steady rise in regional quotation which continued until the final weeks of March 2024. This was stably supported by an appreciation of the US dollar against the other nation's currencies which provided them additional support, supporting traders and buyers to purchase the goods at a lower cost. This was further accompanied by eased freight costs from past months, resulting in higher commodity availability, including wheat starch globally.
Asia Pacific
The pricing environment for Wheat Starch in the APAC region, particularly across the Australian market during Q1 2024 has been characterized by various factors that have influenced market prices. Overall, there has been a significant increase in prices compared to the previous quarter of last year. This uptrend was attributed to several factors: sustained high demand from domestic and international markets, rising production costs due to increased processing, machinery, and energy expenses, and the influence of global economic conditions on pricing and market availability. Throughout the quarter, prices have steadily risen, driven by heightened demand from the food and excipient sectors, leading to tight stock levels and further price increases. Additionally, escalating freight costs have contributed to the price surge, evident in the nation's trading dynamics, with suppliers introducing Wheat Starch at higher prices, reflecting broader logistical challenges and global economic impacts on pricing and availability.
Furthermore, as the Australian dollar continuously depreciated against the US Dollar, local merchants raised their product prices, boosting their profit margins. The ongoing high demand for wheat starches in various food industries maintained consistent consumption, favoring merchants amidst traders purchasing goods in dollars. Overall, there was a continual price increase observed throughout the quarter. This trend is in line with the optimistic outlook for the Indian economy, which has shown positive signs of growth with the quarter-ending price for Wheat Starch in India assembled as USD 615/MT FOB Sydney. However, in early Q1, prices dipped due to a global decline in demand for wheat starch and related products, along with year-end destocking. This led to surplus inventory and decreased demand, pressuring prices downward. Western and Northern markets saw reduced orders after the holiday season, heightening competition among producers.
Europe
In Q1 2024, the European Wheat Starch market saw fluctuating prices influenced by multiple factors. Despite a slight recovery in February, the quarter overall experienced a significant decline compared to the previous year. The percentage change from the previous quarter was notably negative, signaling a downward price trend. Initially, the decline in wheat starch prices was fuelled by reduced enthusiasm for imports, notably from a key importing region. This led to excessive inventory levels among merchants, causing a downturn in market sentiments. Additionally, heightened competition from major exporters like Austria in the European region exerted downward pressure on global wheat starch pricing. The combined effect of decreased demand and increased competition has shifted market dynamics, necessitating a thorough evaluation of factors impacting trade and pricing in this vital agricultural commodity. Furthermore, as the first quarter progressed, prices began to steadily rebound. This was spurred by increased demand from downstream sectors, notably the food industries, and the depreciation of the Euro against the US dollar. Disruptions in the supply chain and rising freight costs also played a role in this price uptick. Throughout the final weeks of March, wheat starch inventories among merchants remained adequate compared to previous market conditions, with prices showing a slight upward trend. Regional trades prioritized replenishing stocks at elevated costs and preparing for upcoming demands, hindering merchants' ability to meet ongoing needs seamlessly. Overall, Belgium witnessed significant price changes for Wheat Starch. Prices in the country dropped by an average of 2.91% throughout the first quarter of 2024, with the supply side balancing the overall demand side across the region with the latest quarter-ending price recorded at USD 720/MT FOB Antwerp.
For the Quarter Ending December 2023
North America:
The last quarter of 2023 presented challenges for the North American Wheat Starch market, as a variety of factors influenced prices, resulting in a mixed trend. Starting in October 2023, the cost of Wheat Starch witnessed a notable increase, deviating from the consistent decline observed in previous months. This price surge was closely tied to its upstream Wheat market and increased demand from the regional market, driven by a positive demand outlook. Additionally, as we entered the fourth quarter, businesses were actively restocking their inventories through significant order placements, contributing to the maintenance of a strong market.
Moving into November, the supply side saw an abundance of locally sourced goods, coupled with a slowdown in trade orders as downstream consumption significantly declined, as reflected in the 3.0 percent decline in the FAO Cereal Price Index from October. On the supply front, merchants were actively focused on destocking their previous stockpiles at reduced rates. Additionally, competition from other Wheat Starch exporters, such as Austria and other nations, affected the overall pricing trajectory of wheat starch within the region.
Moreover, As December 2023 unfolded, Wheat Starch prices once again experienced a moderate increase, primarily attributed to a surge in global demand. The agricultural landscape witnessed a significant rise in the prices of essential inputs like feed, fuel, and fertilizer, further reinforcing the upward trajectory of Wheat Starch prices. Lastly, the trajectory of Wheat Starch prices in the US closely mirrors that of exporting countries, creating a ripple effect across the entire global market. These synchronizations have contributed to robust market sentiments, further intensifying the upward pressure on prices.
Asia Pacific:
Throughout the entire fourth quarter of 2023 in the Asia-Pacific (APAC) region, Wheat Starch prices demonstrated a consistent upward trajectory, with a slight dip observed in the middle of the quarter. The increase in domestic Wheat Starch prices was primarily linked to a shortage in imports and lower-than-expected procurement within the merchant community. Furthermore, the heightened demand during the festive season significantly contributed to the escalation of Wheat Starch prices within the regional market, maintaining an overall upward trend in export prices, particularly in October. Additionally, the festive season, marked by numerous major holidays and celebrations, traditionally sees an uptick in the consumption of Wheat Starch and Wheat Starch-based products. This surge in demand, coupled with a constrained Wheat Starch supply, inevitably exerted upward pressure on prices. However, in November, demand from the domestic market stalled, and overseas inquiries weakened. With excess inventory, suppliers offered discounts to clear stockpiles and improve cash flow. Competitive pricing of alternative starches like corn and potato gave buyers more options, leading to a decrease in overall Wheat Starch prices. On the supply side, domestic retailers had ample Wheat Starch availability, causing market oscillations and a decline throughout November, with trade momentum decreasing. Moving into December 2023, the global Wheat Starch market rebounded, showing a noticeable rise in FOB prices. This resurgence was driven by increased inquiries from importing nations, especially due to a surge in demand from major downstream food industries during festive celebrations. Also, substantial demand from importing nations has become a pivotal driver for the current market dynamics. The festive season has traditionally been associated with increased consumption, particularly in the food industry. This surge in demand has played a crucial role in tilting purchasing sentiments towards the north side, creating a conducive environment for a higher price trend in Wheat Starch. Furthermore, overall market transactions remained high, supported by a steady influx of new inquiries. As of now, the latest prices of Wheat starch from Austria were recorded at USD 595/MT.
Europe:
Examining the Wheat Starch market in the European region, specifically in Belgium during the fourth quarter of 2023, reveals a fluctuating trend. Prices witnessed a significant increase in October, followed by a sudden drop in November and a notable rebound in December. Initially, the demand for Wheat Starch remained high throughout the quarter, primarily driven by higher consumption in downstream food industries. Belgium, experiencing the most substantial price changes, had a positive trend for Wheat Starch. Traders in the wheat starch futures market engaged in speculative trading activities, buying and selling wheat futures contracts based on their predictions of future price movements. This speculative behavior introduced higher price volatility in October as traders reacted to market news and forecasts, influencing the pricing dynamics of wheat starch during this period. Further, moving into November 2023, the demand for Wheat Starch from the importing region dropped considerably, impacting overall market sentiments. Plentiful wheat supply across the region, influenced by favorable weather and increased land planted for wheat in past months, contributed to the drop in Wheat Starch prices. The abundance of wheat supplies and its byproducts, including Wheat Starch, led to a sharp decline in prices, disappointing European wheat farmers who had initially expected strong demand. Given the prevailing market dynamics, Wheat Starch prices in the Belgium market experienced a modest increase yet again as December concludes. Wheat starch, a versatile ingredient used in various food and industrial applications, has seen growing demand, both domestically and internationally, attributed to an increased need for food products incorporating wheat starch during holiday seasons and celebrations like Christmas, Hanukkah, Kwanzaa, and New Year's Eve. Hence, the quarter-ending price of Wheat Starch in Belgium was USD 790/MT.
For the Quarter Ending September 2023
North America
Throughout the third quarter of 2023, the pricing trends of Wheat Starch in the North American region mirrored those of the APAC region, primarily Australia. Prices increased in July, dropped sharply in August, and rebounded in September 2023. July saw a surge in prices due to heightened demand in the food sector. One of the key factors driving this rise was the reduced global supply of Wheat Starch, a derivative of wheat, in North America and Europe, caused by factors like drought conditions and the conflict in Ukraine. Additionally, the consumer market sentiment in the United States was mixed in July 2023. The decision of the local Federal Reserve to raise interest rates from 5.25 to 5.50 contributed to a pessimistic economic outlook. Persistent concerns about inflation significantly impacted orders from both domestic and international buyers. In July 2023, the Consumer Price Index (CPI) for the United States was recorded at 305.69. Moving into August 2023, prices dropped again, leading to ample inventory levels among merchants. Businesses, wary of accumulating excessive stock due to potential selling challenges, contributed to a further decrease in future imports. However, September saw a modest market rebound, maintaining a balanced supply-demand equilibrium both regionally and locally. Merchants continued to maintain high stock levels while demand within the region experienced a notable increase, ensuring overall market stability.
Asia Pacific
Throughout the third quarter of 2023, the prices of Wheat Starch in the APAC region, notably in Australia, followed a fluctuating market trend. Initially, there was a substantial increase in prices during the first half of Q3, followed by a decline in August. However, prices rose again as September began. In July, the demand for wheat starch surged globally due to growth in the food and beverage, paper, and pharmaceutical sectors, leading to a continuous price increase throughout the month. During the same period, the Judo Bank Australia Manufacturing Purchasing Manager's Index showed a marginal improvement, indicating a slight stabilization in demand despite the ongoing decline in manufacturing activity since the beginning of 2023. Moving into mid-Q3, the cost of Wheat Starch notably decreased. Both foreign and domestic suppliers did not receive new inquiries, leading to a loss of optimism in the market. The presence of large inventories forced suppliers to adjust their prices to expedite product turnover. Additionally, some market players reduced their stockpiles to improve cash flow, contributing to the decline in prices. In August, foreign sales deteriorated at a slower rate, causing Australian manufacturing output to shrink for the ninth consecutive month. Although the contraction was marginal, companies continued to work through their backlog of orders. Towards the end of the third quarter, in September, Wheat Starch prices rose again and were assembled at $ 570/MT. Global economic factors, including fluctuations in exchange rates affecting the costs of imported materials, played a role in driving these price increases in Australia. Moreover, a decrease in the prices of the raw material, wheat, during this month facilitated easier accessibility for traders in importing regions, especially in Australia. Meanwhile, the Consumer Price Index (CPI) showed a 1.2 percent increase in the September 2023 quarter and a 5.4 percent annual rise, as per the latest data from the Australian Bureau of Statistics (ABS).
Europe
During the third quarter of 2023, Wheat Starch prices started on a bearish note but ended September on a bullish trend, indicating a positive shift. The decrease in demand for Wheat Starch in recent times played a significant role in the price decline observed in July 2023. This drop in demand was partially due to the global economic slowdown affecting various sectors, including food and beverage as well as agriculture, impacting the demand for Wheat Starch. In July 2023, the Wheat Starch market witnessed a decline in purchasing activity within the region, leading to surplus availability both in major producing regions and importing areas. Additionally, the euro gained strength against the US dollar in July 2023, causing the price of Wheat Starch to increase for buyers in the eurozone. This 2% appreciation of the euro made European buyers less competitive in the global Wheat Starch market. However, as the third quarter progressed, prices began to rise due to a consistent increase in downstream demand. Moreover, the rise in energy costs contributed to the overall increase in manufacturing expenses associated with Wheat Starch, leading to a further escalation in prices. Furthermore, the decrease in exporting costs for Wheat Starch in major producing regions such as Australia benefited European traders, allowing them to acquire goods at a lower cost and resell them at a higher price. The prices, moreover, continue to remain on the upper side until the final weeks of September, with price settlement at $ 930/MT in Belgium.
