[Introduction] Potato starch prices rose initially and then fell in the fourth quarter of 2025. Rainy weather affected potato harvesting, keeping costs high and leading producers to maintain firm prices. As the impact of rain on harvesting lessened, cost pressures eased, and increased supply of new starch further increased supply pressure, resulting in a price increase followed by a decline in the fourth quarter. In the first quarter of 2026, market supply pressure remains high, while downstream markets are in their traditional peak demand season. Under this supply-demand dynamic, potato starch prices are expected to remain stable.
Potato Starch Prices Rose Initially and Then Fell in the Fourth Quarter of 2025
The fourth quarter of 2025 is the potato starch production season. Besides supply and demand, cost has a significant impact on potato starch prices. From October to early November, rainy weather affected the potato harvesting progress, keeping costs high. Producers maintained a strong price stance and gradually raised prices. After late November, as rainfall decreased, raw material supply increased, costs decreased, and combined with increased production, a supply-demand imbalance gradually emerged, causing prices to fall. The highest potato starch price in the fourth quarter of 2025 occurred in early November, with an average price of 5860.49 yuan/ton for first-grade starch. The lowest price occurred in October, with an average price of 5620.52 yuan/ton for first-grade starch. The average price of first-grade starch in the fourth quarter was 5802.63 yuan/ton, a decrease of 1.27% compared to the average price in the third quarter.
Production decreased year-on-year, but increased compared to 2021-2023.
The potato starch production season is mainly concentrated from the end of the third quarter to the fourth quarter, which is also the period when raw potatoes are on the market. Besides the impact of planting area on potato yield, extreme weather in recent years has exacerbated the impact on potato production. In 2025, the potato planting area in single-crop areas decreased by 13% year-on-year. Heavy rainfall during the growing and harvesting periods led to a decline in potato yield per acre, and in some areas, potatoes could not be harvested. The decrease in raw potato production resulted in a corresponding decrease in potato starch production. According to Zhuochuang Information, potato starch production in 2025 was 655,000 tons, a decrease of 27.62% compared to the previous year. However, as shown in the chart below, while potato starch production decreased year-on-year in 2025, it increased compared to production from 2021 to 2023, indicating that supply pressure remains.
Most factories did not clear their inventories before autumn production, resulting in high total inventory levels.
Looking at the changes in potato starch inventory in the fourth quarter, as of December 31, 2025, potato starch inventory was 856,000 tons, an increase of 27.38% year-on-year; on November 30, potato starch inventory was 873,000 tons, an increase of 15.48% year-on-year; and on October 31, potato starch inventory was 663,000 tons, an increase of 40.47% year-on-year.
The fourth quarter is the potato starch production season, and production has a significant impact on potato starch inventory. Although potato starch production in 2025 is lower year-on-year, the total inventory remains high because most factories did not clear their inventories before autumn production, a few factories still have unsold starch from 2023, and many people in related industries have goods waiting to be sold.
Peak Season Fails, Downstream Demand Underperforms
The potato starch industry, a major downstream sector, accounts for approximately 40% of demand. Sales of potato starch processing enterprises are significantly affected by seasonality and temperature. In the fourth quarter, with decreasing temperatures, potato starch and hot pot production traditionally experience peak demand, leading to increased operating rates compared to the third quarter. However, due to the ongoing recovery in end-user demand and generally weak catering demand, potato starch enterprises experienced reduced sales, resulting in a year-on-year decrease in operating rates and reduced demand for potato starch. Looking at the changes in operating rates for potato starch enterprises in the fourth quarter, as of December 31st, the operating rate was 42.21%, a year-on-year decrease of 3.35%; on November 30th, the operating rate was 43.23%, a year-on-year decrease of 2.33%; and on October 31st, the operating rate was 40.56%, a year-on-year decrease of 2%.
Potato starch prices are expected to remain stable in the first quarter of 2026.
The oversupply of potato starch is expected to continue in the first quarter of 2026. However, considering that the first quarter is not the peak potato starch production season, factories will not face significant cost pressures and will maintain a willingness to hold prices firm. Furthermore, downstream demand is in its traditional peak season, and the Spring Festival holiday will boost demand, which may mitigate the negative impact of supply pressure to some extent.
Looking at the expected monthly price trends for potato starch in the first quarter of 2026, downstream buyers are expected to begin preparing for the Spring Festival in late January. Although current stockpiling activity suggests it will be primarily driven by immediate needs, improved transactions will strengthen factories' willingness to hold prices firm. Potato starch prices are expected to remain stable in January, with a price range of 5500-5900 yuan/ton. The middle and late February period is the Spring Festival holiday. With logistics and transportation affected, sales activity will decrease in February, and prices are expected to remain stable. Sales activity may improve in March, and downstream buyers may have restocking needs after inventory depletion during the Spring Festival. In addition, with the approaching planting season for raw potatoes in March, the anticipated reduction in planting area may boost factories' willingness to maintain prices, and potato starch prices are expected to remain stable in March.
Source: Zhuo Chuang Information)