South America Industrial Starch Market Outlook, 2030

The South America industrial starch market is experiencing notable growth, driven by increasing demand from various end-use industries such as food and beverages, paper, textiles, pharmaceuticals, and adhesives. With abundant agricultural resources-particularly in Brazil, Argentina, and Colombia-the region is well-positioned for industrial starch production, especially from sources like corn, cassava, and wheat. Brazil, being the largest economy in the region, dominates the market due to its expansive corn and cassava cultivation, along with well-established food processing and export infrastructure.

The demand for starches in food applications is a key growth driver, as consumers increasingly prefer clean-label, natural, and plant-based ingredients. In this context, starches are being widely used as thickeners, binders, and stabilizers in processed foods, dairy products, and beverages. Additionally, the packaging sector is rapidly adopting starch-based biodegradable materials as an alternative to petroleum-based plastics, aligning with global sustainability goals and enhancing the region’s green economy credentials. Countries like Brazil have implemented strict food safety and labeling regulations through agencies such as ANVISA (National Health Surveillance Agency), which ensures that starches used in food and pharma comply with safety standards. Argentina and Chile are also aligning their food safety standards with international norms, encouraging the use of non-GMO and organic starch products. These regulations are fostering innovation in the development of starches with fewer chemical additives and a stronger environmental profile. Companies like Ingredion and Cargill have started launching innovative biodegradable and clean-label starch products tailored for South American markets, promoting sustainability in packaging, agriculture, and food industries.

According to the research report, "South America Industrial Starch Market Outlook, 2030,", the South America Industrial Starch market is anticipated to add to more than USD 3.04 Billion by 2025-30. Countries like Brazil and Argentina have vast cultivable land, favorable climatic conditions, and strong government support for agricultural activities, enabling consistent and cost-effective raw material supply for starch production. Brazil, for instance, is one of the world’s leading producers of corn and cassava, and this agricultural advantage is being leveraged to scale up industrial starch output. The growing demand from the food and beverage industry is another major growth driver.

South American consumers are increasingly favoring processed and convenience foods, especially in urban areas, leading to rising demand for starch as a thickening, gelling, and stabilizing agent in products like sauces, dairy, bakery, and confectionery. This shift in consumption patterns has prompted both local and international companies to invest in food-grade starch production and food processing facilities across the region. In November 2019, Tate and Lyle Plc. opened South American headquarters and application center in Brazil. This investment imitates the importance and growth potential of the South American region for Tate & Lyle Plc. The development of modified starches with enhanced properties such as heat resistance, improved solubility, and better emulsification is gaining popularity across industrial sectors. These innovations are helping industries meet specific technical requirements and expand the functionality of starches beyond conventional uses. Additionally, trade integration within the MERCOSUR bloc is encouraging cross-border investments, easing export-import policies, and improving supply chain efficiency for industrial starch manufacturers. Strategic partnerships between global starch producers and local firms are enhancing technology transfer and creating employment opportunities, thereby strengthening the regional market.

Market Drivers

• Abundant Availability of Raw Materials Like Cassava and Corn: One of the key drivers of the industrial starch market in South America is the abundant local availability of raw materials such as cassava (tapioca) and corn. Countries like Brazil, Paraguay, and Colombia are major producers of these crops, which serve as primary sources for starch extraction. This agricultural advantage provides local manufacturers with cost-effective inputs and ensures a relatively stable supply chain. It also enhances the region’s potential for starch exports and supports the development of domestic starch processing industries catering to food, textile, paper, and adhesive applications.
• Growing Demand from the Food and Beverage Sector: The food and beverage industry in South America is expanding steadily, fueled by urbanization, rising income levels, and changing consumption habits. Consumers are increasingly turning to processed, convenience, and packaged food products, particularly in rapidly growing urban centers. Starch plays a vital role in this industry as a thickening agent, stabilizer, and texturizer in a wide variety of foods such as sauces, snacks, dairy products, and bakery items. As regional food manufacturers seek to improve texture, extend shelf life, and enhance product appeal, the demand for both native and modified starches is increasing.

Market Challenges

• Limited Technological Advancement and Infrastructure: Despite its agricultural strengths, South America faces challenges related to technological limitations and underdeveloped industrial infrastructure. Many starch processing facilities operate with outdated equipment, which hampers efficiency, consistency, and the ability to produce high-quality modified or specialty starches. Additionally, limited investment in R&D restricts innovation and the region's ability to compete with more technologically advanced markets like North America and Europe. These factors make it difficult for local producers to cater to emerging high-value applications in pharmaceuticals, biodegradable plastics, and advanced food formulations.
• Economic Instability and Trade Barriers: Several South American countries have experienced periods of economic instability, currency fluctuations, and inflation, which directly affect industrial production costs and pricing strategies. Additionally, inconsistencies in trade policies, high tariffs, and bureaucratic hurdles in cross-border transactions can limit regional and international trade of starch and starch-based products. This uncertainty can hinder investment in the starch sector and reduce competitiveness in the global market.

Market Trends

• Increasing Use of Modified and Specialty Starches in Non-Food Sectors: There is a growing trend in South America toward the use of modified and specialty starches in non-food industries such as paper, textiles, adhesives, and construction. These industries are recognizing the functional benefits of starch in applications like surface sizing, paper coating, textile finishing, and as a binder in construction materials. This trend is being driven by efforts to find cost-effective and sustainable alternatives to synthetic chemicals, as well as by global customers sourcing from South America due to its raw material availability.
• Rising Focus on Sustainable and Bio-based Products: Environmental awareness is growing in South America, and with it, the demand for bio-based and biodegradable products. Starch is increasingly being explored as a renewable raw material for bioplastics, eco-friendly packaging, and bio-adhesives. Countries like Brazil and Argentina are beginning to invest in green technologies and sustainable production practices, aligning with global trends. Public and private sector initiatives promoting environmental sustainability are expected to further boost the use of starch in innovative, environmentally friendly applications.

Corn is the largest source type in the South America industrial starch industry due to its high cultivation volume, cost-efficiency, and extensive applications across food, beverage, and industrial sectors.

Corn holds the dominant position in South America's industrial starch industry largely because of its widespread cultivation, high yield per hectare, and its versatility as a raw material across various industries. Countries like Brazil and Argentina are among the top global producers of corn, benefiting from vast arable land, favorable climate conditions, and technological advancements in agriculture that enhance productivity and reduce production costs. Corn’s consistent supply and comparatively lower price make it the preferred choice for starch extraction, offering scalability for both domestic usage and export.

The food and beverage industry, which accounts for a major portion of starch demand in South America, relies heavily on corn-based starch due to its functional properties such as thickening, stabilizing, and texturizing. These characteristics are critical in products like sauces, soups, confectionery, dairy items, and beverages. Additionally, corn starch is widely used in the paper, textile, and pharmaceutical industries for applications including surface sizing, adhesives, and drug formulation. The presence of large-scale starch processing facilities in Brazil, supported by government initiatives promoting agribusiness and bioeconomy, further encourages the use of corn as the primary starch source. Another important driver is the growing demand for biodegradable materials and bio-based products in South America. Corn starch serves as a key ingredient in the production of bioplastics, aligning with sustainability goals and regulatory pressures to reduce plastic waste. Moreover, technological improvements in corn wet milling and starch modification processes have made it easier to produce native and modified starches from corn tailored to various industrial specifications.

Modified starch is the fastest-growing product type in South America's industrial starch industry due to its enhanced functional properties and rising demand across diverse industrial applications such as food processing, pharmaceuticals, paper, and packaging.

The rapid growth of modified starch in the South American industrial starch industry is primarily driven by its superior functional versatility and the increasing need for high-performance ingredients across various sectors. Modified starches are chemically, physically, or enzymatically altered forms of native starch that offer improved characteristics such as greater stability under extreme conditions (e.g., heat, acidity, and shear), enhanced texture, increased solubility, and controlled viscosity. These enhanced properties make them indispensable in modern food manufacturing, where consistency, shelf-life, and product quality are critical.

In South America, especially in countries like Brazil and Argentina, the food and beverage industry is expanding rapidly due to rising urbanization, growing middle-class incomes, and the influence of Western-style processed food consumption. As a result, manufacturers are increasingly turning to modified starches to meet the processing demands of products like ready-to-eat meals, baked goods, dairy, sauces, and confectioneries. Beyond food, the paper and textile industries both significant in South America also rely heavily on modified starches for improved binding, coating, and finishing qualities. Moreover, the growing demand for sustainable and biodegradable packaging materials has further fueled the use of modified starches, especially in the production of biofilms and eco-friendly packaging solutions. In pharmaceuticals, modified starches are used as disintegrants and fillers in tablets, with Brazil's rising pharmaceutical sector further supporting this demand. Government incentives promoting value-added agricultural products and biobased materials have also catalyzed investments in starch processing infrastructure, enabling greater production of modified variants.

Food & beverage is the largest application type in South America's industrial starch industry due to the region’s growing processed food sector, increasing urbanization, and high consumer demand for starch-based ingredients in a wide range of food products.

The dominance of the food & beverage segment in South America’s industrial starch industry is primarily a result of the region’s expanding processed food sector, fueled by rising urban populations, increasing disposable incomes, and a shift in dietary preferences toward convenience and packaged foods. As more people in countries like Brazil, Argentina, and Colombia move to urban areas and adopt fast-paced lifestyles, the demand for ready-to-eat meals, baked goods, dairy products, snacks, confectionery, and beverages continues to surge. Industrial starch, particularly from corn and cassava sources, plays a crucial role in food processing due to its multifunctional properties such as thickening, stabilizing, binding, and texturizing.

These functionalities are essential for improving the texture, shelf life, and visual appeal of food and beverage products. Furthermore, the growth of the middle class across South America has led to increased consumption of premium and processed foods, which often rely heavily on both native and modified starches to maintain consistency and quality during production, storage, and distribution. In addition to consumer-driven factors, the region's rich agricultural base and the availability of cost-effective raw materials support large-scale starch production for food uses. The expanding food manufacturing sector also benefits from supportive government policies, investments in food processing infrastructure, and trade agreements that boost both domestic consumption and export potential. Moreover, industrial starch is increasingly being used in reformulated food products to meet dietary trends such as gluten-free, low-fat, or clean-label demands.

Brazil is leading in the South American industrial starch industry due to its strong agricultural base, especially in cassava and corn production, combined with growing demand from food processing, paper, and textile sectors.

Brazil’s leadership in the South American industrial starch industry is largely attributed to its robust agricultural base, particularly its large-scale cultivation of cassava and corn, which serve as the primary raw materials for starch production. As one of the world’s top producers of cassava, Brazil has a natural advantage in supplying native and modified starches to meet growing industrial needs. The favorable climate, vast arable land, and advanced farming practices allow for consistent, high-yield crop production, ensuring a reliable feedstock supply for starch manufacturers.

The increasing demand from Brazil’s expanding food processing industry driven by urbanization, population growth, and changing consumer habits has significantly contributed to the domestic consumption of industrial starch. It is widely used in the food sector as a thickening, stabilizing, and binding agent in dairy products, processed foods, snacks, sauces, and beverages. Beyond food, Brazil’s large textile and paper industries also depend on starch for applications like fabric sizing, coating, and paper strengthening, further boosting the need for industrial starch. The country’s investment in processing infrastructure and R&D has enabled the production of a wide range of starch derivatives, including sweeteners, modified starches, and bio-based materials for sustainable packaging and adhesives. Companies such as Cargill, Ingredion, and local starch producers have established and expanded operations in Brazil, benefiting from cost-effective raw materials and proximity to both domestic and regional markets. Additionally, government support for agricultural development and bioeconomy initiatives encourages sustainable production and innovation in the starch industry.