The Global Formic Acid Market stood at 870.03 kilotons in 2021 and is projected to register a CAGR of 3.87% in volume terms during the period 2022-2027.
Due to the COVID-19 pandemic-induced lockdown regulations and fewer workers, production in various chemical and other industries has reduced, resulting in a reduced supply of raw materials to industries. The animal feed sector, which is the major end-user industrial segment of formic acid, has also been badly affected by the closure of restaurants around the world. Despite global demand remaining relatively stable, the pandemic severely harmed the animal feed supply. Owing to all these factors, the formic acid market was impacted by COVID-19 in 2020. However, the mmarket is expected get better during the forecast period.
Key Highlights Over the medium term, the growing demand for animal feed and silage additives are driving the growth of the formic acid market?.
Sustainable Use of Formic Acid in Fuel Cell is likely to act as an oppurtunity for the formic acid market.
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 to Dominate the Market
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.
The UN Food and Agricultural Organization (FAO) estimates that the world will have to produce 60% more food by 2050, and it is believed that animal protein production will grow even more – meats (poultry/swine/beef) will double, as well as dairy, and fish production will almost triple by 2050 there increasing the feed consumption which in turn drives the market studied?.
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
Asia-Pacific region dominated the global market share. The region is expected to continue dominating the market during the forecast period, owing to the demand for meat and poultry coupled with the demand from the textile sector in countries such as China and India.
Chicken meat output is expected to rise by 2% to 14.3 MMT in 2022, following a drop in 2021, as large-scale white feather ("broiler") manufacturers use new production facilities. In 2022, China’s hog production is expected to fall by 5%, but Post anticipates a larger concentration in large-scale operations utilizing professional feed formulae.
China is the largest producer and exporter of textiles and clothing in the world. With enormous production capacity, China has an oversupply of textiles and clothing products. However, the increasing labor costs and rising global protectionism weakened its competitiveness. The labor costs in the country increased significantly in recent years and crossed many other countries in Asia.
India is the world’s largest producer of milk and buffalo meat. The country is also the second-largest producer of goat meat and the third-largest producer of poultry. In order to cater to 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.
Moreover, Invest India estimates that by 2025, the animal feed market might be worth USD 6 billion. Compound cattle feed, on the other hand, has a market potential of USD 400-650 million dollars, with a 16% annual growth rate by 2025, with main growth drivers including low organic feed market penetration, growing formal offtake, and others. Hence, such trends in the animal feed industry are projected to drive the demand for formic acid, notably for animal feed and silage additives.
All the aforementioned factors, in turn, are expected to affect the demand for formic acid in the region during the forecast period.
The global formic acid market is consolidated in nature. The major players in the market are BASF SE, Shandong Acid Technology Co. Ltd., LUXI Group, Eastman Chemical Company, and Perstorp, among others.
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