The formic acid market was valued at 840 kilotons in 2020 and is expected to grow at a CAGR of over 3. 5% during the forecast period. Due to COVID-19, lockdown regulations, and a deficient number of workers, the production in various chemical and other industries has decreased, and the supply of raw materials to the industries decreased.
New York, Jan. 07, 2022 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "Formic Acid Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)" - https://www.reportlinker.com/p06195681/?utm_source=GNW
The animal feed industry, which is the major end-user industry of formic acid, has also been badly affected by the closure of restaurants around the world. The coronavirus crisis has severely harmed the supply of animal feed, despite the fact that demand has remained relatively stable world. Owing to all these factors, the formic acid market is negatively impacted by COVID-19.
Over the medium term, the major factors driving the growth of formic acid are the growing demand for animal feed and silage additives?.
On the flipside, unfavorable conditions arising due to COVID-19 outbreak on formic acid are expected to hinder the market growth.
The Asia-Pacific region is expected to dominate the market and is estimated to witness the highest CAGR during the forecast period.
Key Market Trends
Animal Feed and Silage Additives Segment has a Huge Market Potential
Animal feed and silage additive manufacturers use formic acid as an additive in solid or liquid form which is also considered safe for animal health. With the growing population of animals, food security for them is an important issue that should be maintained.
Formic acid inhibits harmful bacteria in the feedthrough acidification, supports digestion of the feed with better feed conversion. Formic acid is also considered the second stronger organic acid which inhibits bacterial growth. It is used as an essential element for high-quality forage silage production to inhibit the proliferation of pathogens and has been found effective for the growth inhibition of silage microorganisms.
Additionally, the property of formic acid to preserve feed mixes makes it more unique, hence upsurging the demand for formic acid in the market over the period.
Countries of Asia and Europe are majorly shifting from the application of antibiotics and largely engaging themselves in feed acidulants. Moreover, the emerging economies such as China, India, Thailand, and Germany in these regions are escalating the demand for meat, milk, and egg which is propelling the demand for formic acid in the farms.
According to the IFIF (International Feed Industry Federation), the annual turnover for commercial feed manufacturing is more than USD 400 billion, and the production is estimated to be around one billion ton. Moreover, FAO estimates a huge growth of feed demand from 2010 to 2015 by 60%, where the meat demand will rise by 70%, dairy by 55%, and aquaculture by 90%.
China became the largest country in 2018 with 188 million ton of feed production, followed by the US with 177 million ton. In 2019, the AFIA declared that American domestic livestock and pets have consumed 284 million ton of safe and hygienic food. Due to the COVID-19 scenario, the consumption rate fell by 1.7% in 2020, recording 248.4 million ton of feed consumption.
BASF offers FDA-certified formic acid in the North American market as the application of antibiotics is declining in the US and shifting toward the safer feed solution to improve animal health. BASF is one of the largest suppliers of feed additives that help grow meat, milk, and eggs demanded by the farmers. Although the company has increased its prices in recent years to cite higher production costs, increased demand, and tightening supply.
Other major suppliers of formic acid for animal feed include Nutrex, Biomin, Perstorp, and others. These aforementioned factors are expected to boost the demand for formic acid in the global market over the forecast period.
Asia-Pacific Region to Dominate the Market
The Asia-Pacific region dominated the global market share. The region is expected to dominate the market during the forecast period, owing to the demand for meat and poultry, coupled with the demand from the textile industry in countries such as China and India.
In 2020, China restored its position as the world’s largest animal feed producing country, recording an output of 252.76 million ton. Pig and poultry feed production accounted for about 35.3% and 49.6% of total feed produced in the country, respectively.
In 2021, with expansion of pig livestock, the pig prices reduced to low levels. However, the demand for animal feed has increased in the country, affecting the global trade. The country aims at reducing the use of corn, by using alternative grains like wheat and rice as these offers price advantage over corn.
China stands to be the world’s largest leather producing country, accounting for 25% of the global production. As per 2020 statistics, the country holds 6,170 million sq. ft per year of average annual production. Nearly 40% of the leather produced from bovine skin comes from China.
India is the world’s largest producer of milk and buffalo meat. The country is also the second largest producer of goat meat and third largest producer of poultry. In order to cater such demand, the country holds world’s largest population of about 515 million. Such livestock farming scenario stands to be one of the factors driving animal feed demand in the country.
The major five meat producing states in India include – Uttar Pradesh, Maharashtra, West Bengal, Andhra Pradesh and Telangana, contributing to about 56.9% of the total meat production in the country. The country is also the world’s largest exporter of sheep and goat meat, and are majorly exported to countries like UAE, Saudi Arabia, Kuwait, Qatar and Oman.
India, hold huge prospects for leather demand from domestic as well as international markets, the Council for Leather Exports (CLE) was observed insisting the government to initiate a leather park scheme in October 2021. As per CLE, the scheme can help boost production amidst the expectations that large brands and manufacturers can increase sourcing of leather material from India.
All the aforementioned factors, in turn, are expected to increase the demand for formic acid in the region during the forecast period.
The global formic acid market stands to be a consolidated market, where the top five companies cater to about 85% of the worldwide market demand. The major players in the market are BASF SE, Shandong Acid Technology Co., Ltd., LUXI Group, Eastman Chemical Company, Perstorp, among others.
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