Propionic Acid Market - Growth, Trends, COVID-19 Impact, and Forecast (2021 - 2026)

Market Overview

The global propionic acid market size was estimated at USD 1.2 billion in 2020, and the market is projected to register a CAGR of over 6% in terms of revenue during the forecast period.

The market was negatively impacted by COVID-19 in 2020. The rising awareness related to health consciousness among the consumers has become the major factor hindering the demand for food preservatives. Additionally, as it is one of the major ingredients in food preservatives, propionic acid has also experienced a marginal decline in terms of demand, constraining the growth of the market. On the other hand, the cosmetic industry has also experienced a great crisis during the pandemic, and the revenue of the cosmetic industry fell about 20-30% in 2020. The widespread store closures have highly declined the sales of cosmetic creams, due to which the production of creams and other cosmetic products has experienced a high reduction. In addition, the shutdown of cosmetic production facilities due to social distancing policy has also become another reason in terms of production declining. These factors have impacted the demand for cosmetic ingredients, thus constraining the growth of propionic acid globally.

• Over the short term, one of the major factors driving the growth of the market studied is the increasing demand for grain preservatives and safe animal feed. The growing convenience food industry has also majorly contributed to the growth of the market.
• Propionic acid is also effective against molds or fungi and helps in the storage of grains for longer periods in high moisture places. The increasing feed demand and increase in awareness on grain preservation and safe animal feed are expected to significantly boost the demand for propionic acid during the forecast period.
• However, the detrimental effects of propionic acids on human health and environmental concerns regarding the use of pesticides are expected to hinder the market growth.
• Propionate esters as an alternative for solvents may provide opportunities for market growth in the future.
• Asia-Pacific is likely to witness the highest growth rate during the forecast period.

Scope of the Report

Propionic acid is a colorless liquid with a strong odor, which is miscible with water and a few organic solvents. The other names of propionic liquid include carboxylic acid, ethanecarboxylic acid, carboxyethane, and ethylformic acid. Propionic acid is a naturally occurring substance that can be used in essential oils as esters. The market is segmented on the basis of application, end-user industry, and geography. By application, the market is segmented into Animal Feed and Food Preservatives, Calcium, Ammonium, Sodium Salts, Cellulose Acetate Propionate, Herbicides, Plasticizers, Rubber Products, and Other Applications. By end-user industry, the market is segmented into Agriculture, Food and Beverage, Personal Care, Pharmaceutical, and Other End-user Industries. The report also covers the market size and forecasts for the Propionic Acid Market in 15 countries across major regions. For each segment, the market sizing and forecasts have been done on the basis of revenue (USD million) and volume (kilo tons).

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Key Market Trends

Growing Demand from the Agriculture Industry

• Propionic acid is used as a preservative in animal feed and grain in the agriculture industry. It is also used to sanitize the surface of places where silage and grain are stored.
• In addition to this, they are used as an anti-bacterial agent in water, which is used for drinking purposes by livestock. They are even sprayed into poultry litter to kill fungi and bacteria.
• Furthermore, according to the OECD-FAO Agriculture Outlook 2020-2029, the livestock sector's growth would increase feed consumption. Maize, wheat, and protein meals are projected to account for largely 75% of total feed demand, with imports accounting for nearly 90% of total feed demand. This trend is the outcome of policies that favor the development of food crops over feed crops.
• With the world population expected to grow by 2.3 billion people during 2009-2050, and the per capita income also following a rising trend, the demand for food is expected to increase at a rapid rate through the years, thereby driving the agricultural sector worldwide.
• According to the published data by the Food and Agriculture Organization of the United States, feeding a world population of 9.1 billion people in 2050 would require raising food production by around 70%. In developing countries, food production is likely to get double by 2050.
• Such positive growth factors are expected to drive the agriculture sector worldwide, which in turn, is expected to augment the consumption of propionic acid in the agriculture sector through the forecast period.
• However, according to the FAO survey, in most developing countries, the governments anticipated a decrease of over 50% of fruits, cereals, vegetables, and dairy products in terms of production during the pandemic.
• On the other hand, even if the demand for animal feed has been relatively stable, the supply chain of animal feed is gravely hit by the COVID-19 crisis. Most of the European countries, which are rich with animal feed in terms of stock and production, have banned the export to neighboring and other outer countries. This factor is creating severe demand-supply problems, and due to such reason, the demand of propionic acid have also been affected.

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