The Asian potato starch market has recently experienced a significant downturn, with prices continuing their decline into early and mid-June 2025, following a sharp drop in May. This bearish trend has been primarily driven by a confluence of factors, including oversupply conditions, weak downstream demand, and reduced export interest across the region. However, industry experts are now forecasting a price rebound after June, spurred by seasonal demand, increasing freight costs, and strategic procurement by buyers.\
The consistent price decline reflects several underlying issues that have collectively weighed on market sentiment. A key factor has been the elevated inventory levels. In China, May saw a steep fall in potato starch prices as domestic manufacturing activity, while marginally improving from April, led to increased production volumes that exacerbated existing stockpiles. This supply glut was further intensified by a significant reduction in potato starch import prices from European suppliers, which subsequently depressed local market values. Suppliers in China had strategically ramped up stockpiling ahead of Labor Day holidays and scheduled plant maintenance, only to be met with weak consumption, forcing them to aggressively cut prices to manage inventory build-up. External trade sentiment was also affected; despite temporary tariff relief between China and the U.S., it failed to stimulate any meaningful recovery in demand. Furthermore, the depreciation of the U.S. dollar against the Chinese yuan negatively impacted export competitiveness, leading to fewer international inquiries and limiting the export market’s capacity to absorb surplus supply.
India’s potato starch market mirrored China’s trajectory, experiencing a substantial price drop largely due to an increase in domestic production. Government initiatives aimed at boosting local production and self-sufficiency led to an augmented supply of potato starch. However, this surge in supply coincided with muted demand, as Indian manufacturing remained sluggish, characterised by stagnant production and weak new orders. Consequently, demand for potato starch from critical sectors such as food processing and textiles declined. Despite the appreciation of the U.S. dollar, which typically enhances India’s export competitiveness, global market saturation prevented any significant export growth. High inventory levels with distributors and a marginal decline in overseas orders further dampened the market. Across Asia, cautious buying behaviour was prevalent among potato starch purchasers, who often delayed purchases in anticipation of deeper discounts or clearer demand signals amidst economic uncertainty and ample supply. Exporters also faced intense competition from lower-cost European shipments, diminishing their pricing power and contributing to the overall soft market.
Looking ahead, market sources anticipate a price increase for potato starch in Asia after June 2025. This expected turnaround is predicated on several emerging dynamics:
- Rising freight costs: Shipping rates are projected to increase due to reduced vessel availability, which will consequently drive up export costs.
- Shift in supplier strategy: Suppliers are expected to prioritise regional sales given the higher export costs.
- Proactive buyer behaviour: Buyers are anticipated to accelerate their procurement efforts to secure prices before the predicted increase.
- Strategic stockpiling: Some buyers are expected to strategically stockpile potato starch to hedge against potential supply chain risks in the forthcoming quarter.
These factors, combined with a return of seasonal demand, are set to create a stronger upward momentum for potato starch prices in the coming weeks. The market is poised for a significant shift from the recent period of decline as demand and supply dynamics begin to rebalance.
