New research and the approval of health claims will contribute to 5.1 percent annual growth in demand for soy in the US over the next five years, predicts market researcher The Freedonia Group.
A report published this month entitled Soy Products and Markets set overall demand for soy products at $6.75 billion in 2004, but expects it to reach $8.65 billion by the end of the decade.
In the first half of the decade, the annual growth rate was just 3.4 percent, so there are clear signals that demand is hotting up - both from foods and from industry.
The Freedonia Group holds that soy-derived chemicals are the fastest growing segment, mainly due to governments and businesses seeking to reduce dependence on petroleum.
But soy isoflavones, which are gaining popularity in supplements for their putative ability to alleviate menopause symptoms and maintain bone density, also fall under the chemicals umbrella.
At present, chemicals make up just 10 percent of the soy industry, worth $0.7 billion in 2004. But they have grown 18 percent per year over the past five years, and the spurt is expected to slow only slightly to 13.5 percent per year over the next five.
Soy protein products are also expected to steam ahead with 5.9 percent annual growth - a factor that is believed to be largely due to the FDA's approval of health claims linking consumption of soy to a reduced risk of coronary heart disease.
What is more, the report predicts that soy will play a larger role in foods seeking to cater to new diet trends - despite the waning popularity of the low-carb/high-protein approach to weight loss.
Soy is the world's largest oil crop, and soy bean oil represented the lion's share of the overall market in 2004 (54 percent). But it was the only segment to suffer a dip in demand between 1999 and 2004, of -0.6 percent. This, said the Freedonia Group, has been due to maturity in the food market, competition from other edible oils and increasingly healthy eating habits that have been turning away from fried food.
But salvation seems to be around the corner: on January 1 2006, food companies will have to label the trans fat content of their products - a regulation that is encouraging many to look at replacing unhealthy fats with nonhydrogenated types. Thanks to this, demand for soy oil is tipped to move back into the black, with a 2.8 annual increase in demand.
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