The Global Formic Acid Market was valued at around 600 kilotons in 2020 and the market is projected to register a CAGR of over 3% during the forecast period (2021-2026). Due to COVID-19, due to lockdown regulations and a deficient number of workers, the production in various chemical and other industries has decreased and the supply of raw materials to the industries decreased. The animal feed industry which is the major end-user industry of formic acid has also been badly affected by the closure of restaurants around the globe. The coronavirus crisis has severely harmed the supply of animal feed, despite the fact that demand has remained relatively stable world. It is estimated that the animal feed mills in 2020 are 28,414 decreased to 3% compared to 29,345 in 2019. Owing to all these factors, the formic acid market is negatively impacted by COVID-19.
- Over the medium term, the major factors driving the growth of formic acid are the increasing demand for preservatives and feed additives and the increasing consumption of meat and poultry.
- On the flipside, regulations regarding the usage of formic acid and COVID-19 impact on formic acid are expected to hinder the market growth.
- Asia-Pacific region is expected to dominate the market and is estimated to witness highest CAGR during the forecast period.
Key Market Trends
Animal Feed a Huge Market Potential
- Formic acid, as a commercial animal feed additive, is added to the animal diet for feed acidification.
- It is used as an animal feed additive for fisheries, cattle, poultry, etc. The growth of cattle and poultry is higher in countries, such as the United States, China, India, etc., and these are the countries where the demand for formic acid has increased at a moderately high rate.
- Formic acid is also used as an antibacterial agent and preservative in livestock feed.
- Formic acid is sprayed on fresh hay, in order to delay or halt decay, thereby, allowing the feed a longer survival period. This process is of particular importance in the preservation of winter cattle feed.
- In poultry farming, formic acid is applied to feed, in order to kill salmonella bacteria. These practices are widespread in Europe, but are not as common in the United States, due to the generally low commercial availability of formic acid.
- In addition, the use of formic acid on hay feed may reduce the total milk fat when given to milch cows.
- According to survey by Alltech(animal nutrition, feed and supplements company), the global animal feed production increased 1% in 2020 to 1,187.7 million metric tons compared to 2019.
- These applications of formic acid are on the rise, due to the increase in demand for animal feed. This trend is expected to contribute to the demand for formic acid, over the forecast period.
Asia-Pacific Region to Dominate the Market
- The Asia-Pacific region dominated the global market share. The region is expected to dominate the market during the forecast period, owing to the demand for meat and poultry, coupled with the demand from the textile industry in countries, such as China and India.
- China is among the largest meat producers in the world. The top three categories include pork, chicken, and beef. In 2019, according to the National Bureau of Statistics China, the volume of beef and veal production in China is around 6.67 million metric tons.
- In 2020, according to the US Department of Agriculture, broiler meat production in China is estimated at around 15.5 million metric tons.
- At present, India is the fifth-largest feed manufacturer in the world. The commercial feed industry in India is around 28 million metric ton and caters largely to poultry feed (70-75%), aquaculture feed (10-12%), and dairy feed (10-15%). In terms of revenue, the local animal feed is valued at more than USD 5.35 billion in 2019 and is expected to reach more than USD 12 billion by 2025, with a CAGR of more than 14%. In 2019, India exported 123,830 metric ton of various kinds of animal feed to the world, valued at 228 million USD, representing 1.5% of the world's export.
- China's textile and apparel makers are going through painful industrial restructuring. While the country, with enormous production capacity, is still the world's largest clothing exporter, oversupply at home, high labor costs, and rising global protectionism have all eroded its competitiveness.
- All the aforementioned factors, in turn, expected to increase the demand for formic acid in the region during the forecast period.
The global formic acid market is fragmented. The major players in the market are BASF SE, Perstorp, Eastman Chemical Company, LUXI GROUP, and Anhui Asahi Kasei Chemical Co., Ltd, among others.
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