CCM: China price of vitamin A rose up to 98.92 percent in 2016 01-25-2017

The price of vitamin A in China underwent an enormous boost in the beginning of 2016. It raised from USD16,143/t in December 2015 to USD48,941/t in March 2016. Even the price went then slightly down through 2016, the overall level was still much higher than it was in 2015.  

 

Source: Baidu

 

China’s vitamin A price made a huge jump in 2016. The surge already started in the first month of the year. According to CCM, the pharmaceutical company Zhejiang NHU was the first one to raise quotes for their feed grade vitamin A price up to 80% in January. The price increase went on until March 2016, when the market price feed grade vitamin A was even almost double the price in January. In fact, the price increase stated an amount of 98.92% in this two months, according to CCM’s analysis.

 

After March, the price rose a little more until April and then started to fall down slightly, but in no relation to the enormous increase in the first months. At the end of 2016, in December, the price for feed grain vitamin A was set to USD41,329.5/t and is likely to stay at this level in 2017, according to CCM’s prediction.

 

The reasons for this massive increase can be found in the tight supply situation as well as rising demand for vitamin A globally. The short supply was caused by a massive production reduction of one of the world leading vitamins manufacturer. In December, one of the main factories was shut down for maintenance, which lasted for three months and showed the significant shorter supply of vitamin A in the market. As a result, many companies turned their eyes to Chinese suppliers, which could raise their prices accordingly.

 

Furthermore, in January 2016, the domestic demand for vitamin was increasing once more. This demand was due to the upcoming Chinese New Year festival, which is traditionally a period of high demand for food ingredients in general. The spring festival also had the effect, that the country-wide holiday led to a reduction of Chinese producers, increasing the short supply in that period even more.

 

All these opportunities gave the biggest vitamin A manufacturer in China, Zhejiang NHU, the chance to raise its quotes immensely in the first month of the year, by even up to 60.38% in March.

 

Looking at the next quarter, Q2, the short supply of vitamin 2 was still going on. This time, it was due to the shortage of an important upstream product of vitamin A, namely citral. Hence, the prices stayed on a very high level with even a further slight increase. During Q3 the global demand for vitamin A decreased again, which resulted in a moderate fall of prices as well.

 

Then, on October 17, 2016, a big news was brought from Germany. In one of the plants of the biggest worldwide supplier of the raw material citral, BASF, an explosion occurred, leading to a shorter supply of this raw material and hence to higher prices for vitamin A again. The rising prices were also supported by the high demand of purchasers, who were worried about the following vitamin A supply and purchased lots of vitamin for their stockpile.

 

What’s more, CCM believes, that the high price of vitamin A will continue in 2017. The main reason is the environmental inspection of China’s government in several industries, resulting in production reductions and even shutdowns. The environmental pollution in China reached critical values for many times, hence the efforts and environmental protection and stringent conditions for Chinese manufacturers will favour short supply and higher prices of vitamin A in China.

 

About CCM:

 

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets.

 

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