FOR IMMEDIATE RELEASE
Date: Jan 11 2024
Subject: Anticipated Shortage of Sodium Benzoate in Europe – Q2 and Q3 of 2024
BSP Sourcing is issuing a critical advisory to its customers, stakeholders, and partners about a projected shortage of Sodium Benzoate in Europe. This shortage, already taking effect, is expected to significantly impact the market in the second and third quarters of 2024.
The Issue:
Sodium Benzoate, an essential chemical in industries like food & beverages, cosmetics, pharmaceuticals, and agriculture, is facing a looming supply shortage in Europe in 2024. This shortage could critically affect a wide range of products relying on this compound.
Key Reasons for the Anticipated Shortage:
Increase Demand Across Industries: The demand for Sodium Benzoate is intensifying, marked by a CAGR of 5.05% projected through 2030, is causing strain. It's widely used in the food industry due to its cost-effectiveness and processing advantages. The cosmetics and pharmaceutical sectors also show a heightened demand for this preservative. Sodium Benzoate also has a growing application as a corrosion inhibitor in automotive antifreeze fluids and is becoming used more commonly in as a preservative in the agriculture sector.
Raw Material Price Instabilities: Significant fluctuations in the costs of raw materials, particularly of Crude oil and Toluene, are directly affecting the availability and pricing of Sodium Benzoate. These fluctuations are influenced by varying factors like labour costs, global supply and demand dynamics, and regional market conditions. Such volatility in raw material prices is directly impacting the cost and availability of sodium benzoate, given that these materials are integral to its production. As a result, industries relying on sodium benzoate may experience price changes and supply chain challenges.
Complex Supply Chain Dynamics: Post-COVID-19 recovery and geopolitical factors such as the conflict in Ukraine and tensions in the Middle East are adding to the supply chain challenges. The rerouting of shipping away from the Red Sea and Suez Canal due to Houthi rebel attacks has further complicated the situation, exacerbating supply challenges leading to delays and increased transportation costs.
Economic and Trade Tensions: In the prevailing economic climate the dynamics of the supply chain are experiencing a shift, leading to a tug-of-war at the ends of supply chain. While companies aim to cut costs and secure advantageous payment terms, suppliers are focused on protecting their margins and reducing trade financing risks. This push-pull effect is exacerbating the supply tightness of Sodium Benzoate.
Market Analysis:
Despite the European Sodium Benzoate market's projected growth, these compounded challenges pose a significant threat to its stability and availability. Customers are already having trouble securing product and meeting price expectations and production timelines. We anticipate the potential for considerable shortages throughout 2024.
Forward-Looking Statement:
BSP Sourcing remains vigilant in monitoring these developments and is actively seeking alternative solutions to mitigate the impact of this shortage for our customers.
About Us:
BSP Sourcing is a trusted sourcing partner for chemicals and raw materials offering Strategic Sourcing and Supply Chain Solutions across industry segments. BSP Sourcing is part of BioAktive Group Inc, a US company supplying best in class ingredients, raw materials and solutions at the intersection of chemicals and life sciences. For more information, please email us info@bio-aktive.com or info@bspsourcing.com.
For more information, please contact:
Solomon Matzner
President
BioAktive Group Inc
For media inquiries or for more information please contact us at info@bio-aktive.com
End of Press Release