The global soy-based chemicals market is expected to grow at a CAGR of close to 8% during the period 2018-2022, according to a new market research study by Technavio.
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Technavio has published a new market research report on the global soy-based chemicals market 2018-2022 under their chemicals and materials library. (Graphic: Business Wire)
The report categorizes the global soy-based chemicals market by application, including biodiesel, food and beverages, plastic and polymers, paper and pulp, and personal care and cosmetics. The report also determines the geographic breakdown of the market in terms of detailed analysis and impact, which includes key geographies such as APAC, the Americas, and EMEA.
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Market driver: increasing demand for biofuels
As they reduce carbon emissions and removes the dependency on fossil fuels, the use of biofuels had increased. Also, the production of biofuels requires feedstock, which is generally renewable in nature. The use of biofuel is high in agriculture-based economies such as India, China, and Brazil because of the availability of vast area for the feedstock production. As they can reduce the emission of greenhouse gases, biofuels are used as a substitution for petroleum-based fuels.
According to a senior analyst at Technavio for specialty chemicals research, “Countries such as the US and Germany are supporting the use of biofuels to reduce the dependence on imported crude oil, which will boost the consumption of biofuel such as soy-based biodiesel. The production of biodiesel involves the use of soy-based chemicals. The growth in the global soy-based chemicals market during the forecast period is expected to increase due to the consumption of biofuels such as soy-based biodiesel.”
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Market trend: growing demand for natural waxes in candle industry
Rising environmental concerns and the demand for bio-based products are expected to foster the consumption of soy-based chemicals in the natural wax industry. In the natural wax industry, soy-based chemicals are used as substitutes of petroleum and synthetic products. Due to similar properties and functionality offered by soy wax, the major vendors in the candle industry are opting for soy wax than paraffin wax. Also, soy wax is a biodegradable product which is produced from soybeans, whereas paraffin wax is produced from petroleum. Paraffin wax releases substances that are harmful to humans such as black soot and carcinogens. Soy wax candles are non-toxic. They also facilitate cleaner burning, higher durability, and excellent fragrance. Soy-wax has a greater potential in the candle industry, owing to such properties.
Market challenge: volatility in soybean prices
The fluctuations in the costs of commodities have put a lot of financial pressure on the numerous producers in recent years. Fluctuation in the cost of soybean is affecting the cost of products derived from soybean after the global crisis (2008). For example, the cost of soy-based consumer packaged goods saw an increase of double digits in recent years. Only a few have recovered from the global crisis. Major economies are yet to recover; some are still struggling to recover. The fluctuations in prices of raw materials are yet to stabilize, even though the global economy has shown signs of a positive outlook. Many vendors do not have the adaptability to cater to market volatility.
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Some of the major contributors in the global soy-based chemicals market:
- Ag Processing
- Archer Daniels Midland
- Bunge
- Cargill
- Stepan
- Soy Technologies
The global soy-based chemicals market is moderately fragmented. Though there are few leading vendors, new vendors look at capturing the market share. Players in the market are trying to increase their global footprint by mergers and acquisitions and collaborating with local or regional players.
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