Citric Acid Prices Explained

Citric acid prices showed bullish trends as consistent demand from the food and beverage industry, the volatile corn market, and the geopolitical tensions in the Red Sea affected global trade routes.

The Asian market experienced fluctuating prices as overproduction capacity and shifts in raw material costs started piling the inventory. Also, reduced demand from the market contributed to the modest citric acid prices. However, experts projected a rebound as the Chinese demand for industrial citric acid remained relatively stable. This is backed by strong Indian inquiries.

In Europe, stricter environmental regulations and higher energy costs across production hubs fueled manufacturers to increase citric acid prices. The implementation of new rule regulations in Western and Central Europe forced manufacturers to invest in sustainable production processes which influenced prices.

In North America, steady demand and import reliance translated to elevated citric acid prices. While the region’s corn market posted a bumper harvest, its transportation costs and supply chain disruptions contributed to the rising prices. Additionally, the U.S. reliance on Asian and European citric acid imports contributed to the commodity’s value.

Why are citric acid prices fluctuating?

1. Corn Market

The citric acid industry heavily relies on agricultural produce (particularly corn). While corn prices remained subdued due to bumper harvest in the Asian, North American, and South American markets, citric acid competes with ethanol (a biofuel mostly made from corn).

As the sustainability campaign intensifies, some countries ramp up their renewable fuel inventory. For instance, Brazil boosts its sugarcane and corn agriculture to strengthen its bio-ethanol production. This initiative is also implemented in India as the government encourages its farmers to invest in corn farming. Both countries aim to reduce reliance on fuel imports.

2. Food and Beverage Industry

The food and beverage industry is a major consumer of citric acid.

For example, the growing popularity of citrus-based beverages and snacks fuels the need for citric acid as a preservative and flavor enhancer. Additionally, consumer health preferences influence this trend as more people are opting for foods and drinks that contain probiotics and vitamins that promote health and wellness.

3. Pharmaceutical Industry

Citric acid is a buffering, chelating, and flavor enhancer in tablets and capsules. And with the development in medicine formulation, pharmaceutical companies utilize citric acid in some drug treatments.

For instance, Phathom Pharmaceuticals (U.S.) increased its orders for citric acid due to the FDA approval of its new drug (Voquezna). This drug treats gastroesophageal reflux disease (GERD) and requires citric acid for stabilization and taste enhancement.

4. Battery Industry

Generally, citric acid’s application is concentrated in the food and beverage industry. However, the tight competition in the EV (electric vehicle industry), particularly among the Chinese, the U.S., and European automakers prompted researchers to enhance the capacity of lithium-ion batteries.

In a study, citric acid (as a reductant) has superior metal leaching efficiencies under microwave-assisted leaching than hydrogen peroxide and ascorbic acid. The commodity’s properties provide a green and efficient solution for recycling lithium-ion batteries.

Which variables impact the price of citric acid?

• Corn Market
• Food and Beverage Industry
• Pharmaceutical Industry
• Battery Industry
• Other Alternatives

Where does citric acid come from?

Alchemist Jabir Ibn Hayyan discovered citric acid in the eighth century and the first person who separated citric acid by crystallization (in pure form) from lemon juice was the Swedish chemist, Carl Wilhelm Scheele.

Citric acid is found in citrus fruits. However, industrial production of this commodity doesn’t rely on squeezing lemons. It goes through a fermentation process called Aspergillus niger. Here are the steps:

1. Media Preparation – Ingredients in the fermentation process include sucrose or molasses, a nitrogen source, and other essential minerals.

2. Sterilization – The ingredients are sterilized to eliminate any contaminating microorganisms that can affect the citric acid-producing mold.

3. Inoculation – A specific strain of the fungus Aspergillus niger is introduced into the sterilized medium. This mold is carefully selected for its high citric acid-producing capabilities.

4. Fermentation – Then, it is transferred to large fermentation tanks and incubated under controlled conditions. Under optimal temperature, pH, and oxygen levels, the mold metabolizes the sugars in the medium, producing citric acid as a byproduct.

5. Recovery – Once the fermentation process is complete, the fermentation broth (containing citric acid ) is filtered to remove the fungal cells and other solid particles.

6. Purification – The filtered broth goes into a series of purification steps like precipitation, crystallization, and drying to get pure citric acid crystals.

Next, the purified citric acid crystals are dried to remove any residual moisture and they are packaged for various applications.

What are the uses of citric acid?

Here are the top 5 applications of citric acid:

1. Food and Beverage – Citric acid enhances the sour taste and maintains the food and drink’s freshness. As a result, it is extensively used as a preservative and flavoring agent in candies, soft drinks, ice cream, and food flavorings.

2. Cleaning Agent – Its natural cleaning properties are important in removing household limescale, stains, and soap scum from surfaces like kettles, showerheads, and countertops.

3. Cosmetics and Personal Care – Shampoo, soap, and lotion contain citric acid which adjusts the pH levels, making personal care products gentle on the skin and hair.

4. Water Softener – Citric acid is used as a water softener in laundry detergents and dishwashing products. It binds with metal ions in hard water, preventing mineral deposits and improving cleaning efficiency.

5. Pharmaceuticals – In the pharmaceutical industry, citric acid is used as a stabilizer and preservative in medications and dietary supplements. Also, it extends the medicine’s shelf life as it inhibits microbial growth.

What is the future price of citric acid?

Citric acid’s versatility makes it an important commodity in the food and non-food sectors. Its application covers the food and beverage industry, pharmaceuticals, and cosmetics. Experts predicted bullish sentiments with a market that will reach $4.45 billion by 2029.

Firm investments in natural ingredient applications in various companies are increasing as manufacturers want to capitalize on sustainable business. For instance, Molson Coors (a U.S. beverage company) launched Vizzy, a new watermelon hard seltzer drink that uses citric acid flavors from kiwi, mango, passionfruit, and blueberry to enhance the drink’s natural sweetness and lower synthetic sugars.

In the medical field, an Israeli biochemical company launched Cal2Mg (a new mineral blend designed to support optimal bone health). Each gram of Cal2Mg contains 100 mg of calcium and 50 of magnesium citrate.

Moreover, citric acid isn’t just for food and drink anymore. The commodity is used in energy storage tech like flow batteries to keep the electrolyte solutions stable. For instance, Chinese battery manufacturer BYD significantly increased its orders for citric acid due to advancements in its lithium iron phosphate (LFP) battery technology. The new manufacturing process for LFP batteries requires citric acid for the stabilization of cathode materials, translating to a 0.66% citric acid price increase.

Overall, these trends put the commodity on the bright spot as signals point to a bullish market with a $1.35 per kilogram price tag in 2030.