The Formic Acid market size is forecasted to reach US$2.1 billion by 2027, after growing at a CAGR of 4.2% during the forecast period 2022-2027. Formic acid, also known as methanoic acid, is a carboxylic acid that occurs naturally and acts as a crucial chemical amalgamation intermediate. The formic agent is generally used as a reducing agent to reduce potassium dichromate and sodium. Furthermore, formic acid is made up of an effectively infinite network of hydrogen-bonded formic acid molecules, which can exist in one of two polymorphs. The growth of the agriculture industry is primarily driving the formic acid market growth. Moreover, the expanding textile and leather industry is expected to fuel the demand for formic acid. This, in turn, will accelerate the market growth during the forecast period of 2022. However, in 2020, the Covid-19 pandemic created a roadblock for market growth because the major economies were under lockdown. To boost industrial growth, governments worldwide eased the Covid-19 restrictions in 2021, which aided the formic acid market growth.
Report Coverage
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Key Takeaways
- Asia-Pacific region dominated the formic acid market, owing to the growing livestock. For instance, according to the National Dairy Development Board of India, in 2019 the total livestock was 535.8 million, an increase of 4.6% over 2012. With the surge in livestock, the demand for feedstock is increasing, which is benefiting the market growth.
- The surging adoption of formic acid in pharmaceutical intermediates is driving the formic acid market growth.
- Moreover, formic acid is deployed in the rubber industry to manufacture high-quality natural rubber. The increase in the production of rubber is creating an opportunity for the formic acid market growth in upcoming years.
- Nevertheless, the regulations about the use of formic acid are creating a bottleneck for the formic acid market growth.
Figure: Asia-Pacific Formic Acid Market Revenue, 2021-2027 (US$ Billion)
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Formic Acid Market Segment Analysis – By Application
The animal feed and silage segment held the largest share in the formic acid market in 2021 and is forecasted to grow at a CAGR of 4.5% during the forecast period 2022-2027. Manufacturers of animal feed and silage additives utilize formic acid as a solid or liquid ingredient that is important for animal health. Formic acid has vital features, such as inhibiting unwanted microorganisms in feed by acidification and assisting digestion with higher feed conversion. Moreover, formic acid is also regarded as the second most potent organic acid that suppresses bacterial development. It is employed as an important component in the development of high-quality forage silage to limit pathogen proliferation and is effective in the inhibition of silage microorganism growth. Thus, due to these features of formic acid, its adoption in animal feed and silage additives is surging, which is resulting in the formic acid market growth.
Formic Acid Market Segment Analysis – By End-Use Industry
The agriculture segment held the largest share in the formic acid market in 2021 and is forecasted to grow at a CAGR of 4.9% during the forecast period 2022-2027. The combination of formic acid and oxalic acid improves acaricide efficiency against pests. This leads to successful crop protection, animal feed preservation, and other benefits. As a result of these qualities, formic acid is frequently used in agriculture. The factors such as the ban on the growth-promoting antibiotics in animal feed, surging agriculture production, and more are crucial in the agriculture industry's growth. For instance, North American and European countries such as the US, UK, and others have prohibited the use of growth-promoting antibiotics in animal feed. Also, according to the OECD-FOA Agriculture Outlook, worldwide agricultural production is expected to reach 304,403.61 tons by 2026. Thus, the bans and projected growth in agriculture output will aid the natural feedstock usage, and to preserve the feedstock for long, the utilization of organic chemicals will increase. This is anticipated to boost the demand for formic acid, which, in turn, will accelerate the market growth in upcoming years.
Formic Acid Market Segment Analysis – By Geography
Asia-Pacific region is the dominating region as it held the largest share in the Formic Acid market in 2021 up to 35%. The economic growth of the Asia-Pacific countries is spurred by the growth of agriculture, leather, textile, and other industries. The surging food preservation to ensure food security, livestock population, and more are key determinants propelling the agriculture sector in the Asia-Pacific region. For instance, according to the US Department of Agriculture, in 2020, the total food crop production in Asia-pacific was about 998.8 million metric tons, and in 2021 it was about1026.7 million metric tons, an increase of about 2.8%. Moreover, according to the United States Department of Agriculture (USDA), the total cattle stock in China was 91,380 thousand, and in 2021, it was 95,619 thousand, an increase of 4.6%. Also, the total beef cow stock in China was 53,000 thousand, and in 2021, it was 53,400 thousand, an increase of about 1%. Hence, the growing agriculture production and livestock population in the Asia-Pacific region are fueling the demand for formic acid. This, in turn, is expanding the formic acid market growth.
Formic Acid Market Drivers
Booming Leather and Textile Industry
Formic acid possesses key features such as a freezing point of 8.3°C, low flammable, biodegradable, and stable under ambient circumstances, and a boiling point of 101°C. Due to these properties, formic acid is used in tanning and delimiting agents, dyeing, and other applications. As a result, it is ideal for the textile and leather industries. Factors such as increasing foreign investment in the textile and the establishment of new textile and leather manufacturing facilities are facilitating the textile and leather industry's growth. For instance, in April 2022, China-owned company, Xihe Textile Technology Bangladesh Limited announced the establishment of a garment manufacturing industry at Mongla Export Processing Zone (EPZ) in Bangladesh, with an investment of US$12.89 million. The development of this project will complete by 2023. Furthermore, according to the Confederation of National Associations of Tanners and Dressers of the European Community, about 56% of the leather tanning market share is held by the European Union. Therefore, the booming leather and textile industry is driving the formic acid market growth.
Surging Application of Formic Acid in Pharmaceutical Intermediates
In medicine, the use of 85 percent formic acid is a safe, cost-efficient, and successful treatment option for common warts, with few side effects and high compliance. Thus, formic acid is utilized as a pharmaceutical intermediate in the manufacturing of various medicines, including amidopyrin, vitamin B, and others. The global surge in measles cases is accelerating the demand for the amidopyrin medicines. For instance, according to UNICEF, in the first two months of 2022, the number of reported worldwide measles cases climbed by 79% compared to the same period the previous year. Furthermore, according to the Centers for Disease Control and Prevention, Somalia, Nigeria, and India have the highest number of measles cases in 2021, with 5,760, 5,613, and 4,178 cases, respectively. Thus, the surging demand for amidopyrin, vitamin B, and other medicines is fueling the demand for pharmaceutical intermediates. This is expected to drive the demand for formic acid, which, in turn, will propel market growth in the upcoming years.
Formic Acid Market Challenges
Regulations Regarding the use of Formic Acid
Although formic acid has dominated the market for many of its substitutes, the legislation prohibiting its use is restricting the market growth. For instance, according to the New Jersey Health Department, Formic acid is a corrosive chemical, and coming into contact with it can result in major health problems with the eyes, lungs, and other organs. Furthermore, according to the European Union's harmonized classification and labeling (CLP00), this material causes serious skin burns and eye damage. Furthermore, according to the categorization provided by firms to ECHA in REACH registrations, this material is poisonous if inhaled, causes organ damage, is a flammable liquid and vapor, is harmful if eaten, and causes substantial eye damage. Formic acid is a highly lethal source of carbon monoxide poisoning if combined with sulfuric acid. Formic acid and formaldehyde formed as metabolites of methanol are responsible for the optic nerve damage that causes blindness in methanol intoxication. Thus, such restrictions are limiting the formic acid market growth.
Formic Acid Industry Outlook
Technology launches, acquisitions, and increased R&D activities are key strategies adopted by players in the formic acid market.Formic acid top10 companies are:
- BASF SE
- Eastman Chemical Company
- Shandong Baoyuan Chemical Co. Ltd
- Gujarat Narmada Valley Fertilizers & Chemicals Limited
- LUXI GROUP
- Perstorp Holdings AB
- POLIOLI SpA
- PT PUPUK KUJANG
- Rashtriya Chemicals and Fertilizers Limited
- Wuhan Ruisunny Chemical Co. Ltd
Recent Development
In February 2021, GMM Pfaudler acquired the majority share in the Pfaudler Group's global operations, which also included its formic acid segment. As a result of the transaction, GMM has become the Pfaudler group's ultimate holding company, with Pfaudler's entire operation integrated into GMM. GMM Pfaudler Limited will gain a dominant position in the formic acid market as a result of this acquisition.
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