Middle East & Africa Food Starch Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Middle East & Africa Food Starch Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Middle East & Africa food starch market is projected to register a CAGR of 5.84% during the forecast period, 2022-2027.

The food additives business has been one of the industries most affected by COVID-19, which has been characterized by an unprecedented disruption in the operation of both market forces of demand and supply, providing challenges for all market parties. Measures implemented by the government are anticipated to worsen losses in the baking industry due to the potential of supply-side interruptions since over half of all enterprises reported large-scale disruptions in their supply chains due to COVID-19. The members of the six Gulf Cooperation Council (GCC) have responded aggressively to the increasing incidence of coronavirus cases with the closures of restaurants, bars, and lounges across the region. Many farm operations that require significant amounts of labor (mainly, the production of crops for the manufacturing of natural additives majorly food starches and food flavors) were severely affected. In addition, some farmers faced other distinct challenges, such as a steep drop in crop prices like corn. Due to limited demand from major industries including food and beverages, the utilization of corn starch fell considerably. According to FAOSTAT, the yield of corn in Kuwait decreased to 130,381 hg/ha in 2020 from 207,665 hg/ha in 2019.

Over the medium term, the demand for modified starches has been increasing in parallel to the rapid development of the food industry. ​The candy and confectionary industry has the leading demand for modified starch. Modified starch is widely preferred by the confectionery processors in the nation as it is one of the most effective and economical ways to improve the quality of confectionery products, acting as the binder for the candy ingredients, making the candy surface shiny, eye-catching and attractive to customers.​

Additionally, the rise in demand for starch produced from wheat, which is used as a stabilizing and gelling agent in several end-use sectors, is one of the major factors driving the growth of the segment. Moreover, wheat starch is used as a thickening agent by food companies in various products. Nigeria’s growing appetite for Western foodstuffs, specifically pasta, noodles snacks, and baked goods derived from wheat flour, is increasing, as the country is swaying away from its traditionally rice-heavy diet.

Key Market TrendsGrowing Food Sector in the Middle East & Africa Region

The food processing sector comprises the processing of fruits and vegetables, cereals, bakery and confectionary, pulses, oilseeds, dairy, carbonated beverages, fruit juices, and other food items. Saudi Arabia is one of the key consumers of meat products in the world, contributing to the prominent growth in the processed and frozen meat and seafood markets in the country, in which, additives like starches and textures are added to maintain its texture.​

The consumers in Saudi Arabia are also interested in ethnic-inspired food kits, pre-packaged ethnic-inspired meals that require only heating, and portable meals more commonly eaten in other countries or regions which is driving the demand for food starches. Furthermore, consumer spending is driven by high disposable income as United Arab Emirates is one of the largest economies in the GCC region. According to a survey by World Bank, per capita consumer spending on food and non-alcoholic beverages in the United Arab Emirates amounts to an estimated 3,635.56 U.S. dollars in 2021.

Demand for food additives in the South African market is primarily driven by the increasing consumer inclination towards convenient and ready-to-eat packaged food. ​In April 2020, Ingredion EMEA developed an organic instant functional native starch, which can be used in certified organic products and delivers the quality of conventional ingredients.​

South Africa America Holds A Prominent Share in The Market

South Africa is primarily engaged in the production of corn starch, both native and modified. Although potato starch and rice starch are also being produced in the country, production is limited.

Potato starch has many competitive uses in varied application areas. However, it is also an expensive starch relative to other starches. These factors indicate that the South African potato starch market is still in its nascent stage. Thus, it shows room for growth and improvement. Additionally, most of the wheat starches in the country are imported, and they are very expensive relative to other starches in the country.

Moreover, in South Africa, there are two types of starch modification processes used by leading starch producers. The small-scale starch producers use a physical modification process to produce native starch, whereas Tongaat Hulett, one of the largest producers of starch in South Africa, utilizes the chemical modification process to manufacture modified starch. For instance, in 2019, Tongaat Hulett expanded its starch portfolio with the launch of a new locally produced instant modified waxy corn starch called Stygel AWH in South Africa. Stygel AWH is suitable for various applications, including fruit pie fillings, frozen foods, cold process mayonnaise, salad dressing, dry mixes, bakery mixes, meat fillings, frozen dough, canned foods, and sauces.

Competitive Landscape

The Middle East & Africa food starch market is highly fragmented, with many local and international players competing for market share. Archer Daniels Midland Company holds the dominant position in the market. The other leading participants in the market are TATE & LYLE PLC, Cargill Incorporated, Ingredion Inc., and Roquette Frères among others. These companies have set their focus on research and development, expansion, partnership, and innovation, in order to retain their position within the market or gain an advantage over their competitors.

Additionally, companies are focusing on expanding their network of innovation centers, which enables them to collaborate with customers for new product development and reformulations, as well as make investments accordingly.​ For instance, in June 2020, Tate & Lyle PLC made a distribution partnership with Solevo, a leading distributor of chemicals and inputs for specific industrial and agricultural segments in Africa. This agreement comes from the companies’ shared ambition to offer high-quality food and beverage ingredients, including low-calorie sweeteners, and health and wellness ingredients such as starch, soluble fiber, textures, stabilizers, and acidulants.​

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