Juice Concentrates Market

The COVID-19 outbreak, which started in China, has had a major impact on the global economy. The outbreak has impacted the global economy in several ways, including industries such as oil & gas, manufacturing, energy, chemicals, and pharmaceuticals. This pandemic has not only caused disruptions in the supply chains of the industrial sector but also influenced the purchasing decisions and spending behavior of the end users. Moreover, the industrial sector has been severely affected as most countries worldwide have imposed lockdown restrictions, which have not only impacted the import & export of goods & services but has also declined the sales of products in the domestic market.

Furthermore, industries such as electrical and electronics, oil & gas, and manufacturing, among others, have either stopped operations completely or have reduced their workforce due to the pandemic and safety of the employees, which has drastically impacted the juice concentrates market. Most companies in the juice concentrates business have seized operations to ensure the safety of employees. However, some companies are operating at minimum capacity to support essential industries.

Economic Impact

The pandemic has led to several deaths across the continents and has hit the global economy with supply chains thrown into disarray. Moreover, the policymakers are considering short-term packages to help the economy, which would lead to a slowdown in planning and energy infrastructure investment projects. Industrial processes are taking place worldwide, including in the US, China, and India. These countries have invested significantly in the growth of the manufacturing and process industries due to rapid industrialization and urbanization to meet the growing demand for goods & services. For instance, in India, as per the Federation of Indian Chambers of Commerce and Industry report 2018, the chemical industry is expected to reach USD 304 billion by 2025. According to the Global Power Generation Outlook II report, published by the United Nations Environment Programme, China is projected to account for approximately 50% of the world’s chemical sales by 2028. However, the crisis caused by the COVID-19 pandemic has considerably disrupted this momentum.

The pandemic has impacted the juice concentrates market globally. As many businesses came to a halt in the first quarter of FY’2020, manufacturing plants cut output due to declining demand. Furthermore, the juice concentrates producers had to shut down their operations in a few parts of the country due to less demand. Additionally, manufacturers have also been impacted as all the major industries have attempted to contain the virus by shutting down their businesses. These factors have impacted the juice concentrates market globally. On the other hand, the US, China, India, and other key markets in Europe have also witnessed a greater impact on the manufacturing industry due to the global pandemic and the shutdown of manufacturing plants. The demand for juice concentrates across end users has decreased drastically due to the halt in production sites because of COVID-19.

Price Variation of Key Raw Materials

The pandemic has created severe disruptions in raw material supply across countries. This has caused a sharp rise in the pricing of raw materials used for juice concentrates, primarily due to the short supply and opportunistic pricing.

Production Shutdown

Key economies in the world, including the US, China, India, and other had been under lockdown since March 2020, which led to the halt of various industries and industrial plants in the country. Only a few manufacturing units supplying essentials to the healthcare centers have remained operational during this period to supply essential commodities. Due to the production shutdown, the operations in the key industrial verticals such as manufacturing, oil & gas, and other industries had come to a halt, except for essential services, including the pharmaceutical industry. However, government actions and economic incentives would likely influence the restart of the economy with an improvement in economic activity in terms of industrial operations and liquidity in the coming months.

Cash Flow Constraints

Due to lock down across the globe the juice concentrates market was majorly impacted due to slow demand from the commercial and industrial end user. The businesses that are currently struggling for profitability—those with low cash reserves or unstable cash flows— are particularly vulnerable. However, even businesses that appear to be in good financial shape may not be immune, depending on how the situation progresses, and how long it takes for demand and supply chains to return to normal.

Impact on Import/Export

The low demand for juice concentrates across the globe severely impacted the export/export of these goods worldwide. According to the Observatory of Economic Complexity (OEC), in 2020, generators and alternators were the world's 622nd most traded product, with a total trade of $4.72B. Between 2019 and 2020 the exports of Generators and alternators decreased by -14%, from $5.49B to $4.72B. Trade in Generators and alternators represent 0.028% of total world trade.

Impact Due to Lockdown

Many countries had been under lockdown since March 2020, which led to the shutdown of numerous plants. Only a few manufacturing units supplying emergency services have remained operational during this period to supply essential commodities. Similarly, various industries were shut down due to global lockdown, which resulted in limited or no manufacturing activities. This has led to drastic impact of COVID-19 on the juice concentrates market.

Juice Concentrates are likely to witness substantial growth through an anticipated recovery of prices and strategic measures taken by the companies operating in the upstream sector to increase the E&P activities. The ongoing investments by the major players in the industry to enhance juice concentrates is projected to enhance the prices of juice concentrates.