1. Introduction of vitamin a
Vitamin a is a type of fat-soluble vitamin. It has various physiological functions. It is added to food, nutritional fortification, and animal feed in certain proportions. 70%-85% of the vitamin a is used in feed. As human beings pay more and more attention to health, the production and sale of multivitamins and nutritional fortification products on the market are becoming more and more popular. The single vitamin a products now include vitamin a palmitate and acetate.
An important raw material for vitamin a is citral, which has both technical and financial barriers, and there are only a few suppliers worldwide, and its availability and stability directly affect the price of vitamin a.
2. Historical prices of vitamin a and important nodal events
The price of vitamin a is highly volatile and boils down to the alternation of supply and demand from equilibrium to imbalance. The graph below unfolds the price of vitamin a acetate feed 0.5M iu/g as an example to review the price since 2007. Where the x-axis is the time of year, from 2007.10 to 2019.06. Y-axis is the price in RMB/kg.
2.1 historical lowest price of vitamin a
From the graph, it is easy to see that the lowest price of vitamin a is around 100RMB/kg before 2017, which should be very close to the cost line. Since 2017, the price of 100RMB/kg has not appeared, some people say the new lowest price is 300RMB/kg, but from the situation of this year (2022), it should be at 200RMB/kg, and there is still a downward trend, but not much space. This is just my point of view, if you have different opinions, welcome to discuss in the comments.
2.2 Nodal events of the vitamin a price inflection point
2.2.1 In early 2014, a fire at BASF’s German plant’s citral production line led to a sudden reduction in supply, causing vitamin a price to rise, and the plant resumed production a month later.
2.2.2 In 2016, the accident at BASF’s plant in Germany, DSM’s 3-month maintenance program, and the shutdown of production at the G20 Summit in China, all three times overlapping, resulted in a shortage of vitamin a supply and a higher price increase.
2.2.3 In August 2017, the fourth environmental inspection was ushered in the Zhejiang Province of China, resulting in a reduced supply of vitamin a and higher prices. Then in October of the same year, another fire accident occurred at BASF’s German plant and a force majeure statement was issued, shutting down the citral production line, which resulted in a significant reduction in the supply of vitamin a. By December, the price of vitamin a had reached its highest value of 1,000 RMB/kg.
2.2.4 At the end of 2018, BASF experienced a shortage of supply, and the vitamin a price rose to over 500RMB/kg.
2.2.5 In April 2019, DSM’s Swiss plant will undergo a 2-3 months shutdown due to contaminated strains of wastewater treatment, and during the shutdown period, vitamin A products produced at the plant will not be reported or signed. Price increase.
3. Price Influencing Factors of Vitamin a
3.1 Upstream and downstream analysis of vitamin a
The price of the product is influenced by supply and demand. The upstream of vitamin a, whether Roche or BASF production route, citral is a vital raw material, and the producers of citral are very limited, it is said that only BASF, Kuraray, NHU three can produce, the product both have technical and financial barriers, so there are few new entrants (if there are errors, welcome to correct), but also largely affect the price fluctuations.
The downstream of vitamin a are feed, compound multivitamins, nutritional fortification, pharmaceuticals, etc. Its added amount is very small, and thus the cost of the finished product in a good proportion, like feed is a rigid demand, so on the whole, the price fluctuations of vitamin a do not affect its use. And demand is still increasing year by year, about 2-3%.
3.2 Vitamin a price influencing factors
From the above price fluctuation events and upstream and downstream analysis, vitamin a is mainly the role of the supply side resulting in price fluctuations, supply shortages, and price increases. There are three factors affecting the supply: 1. Occasional accidents in factories, result in a sudden reduction in supply, the overall start-up rate of about 70%, such as a production accident, the supply is affected. 2. Environmental pressure, encountered environmental protection inspection, rectification, and shutdown, the supply is reduced. However, the impact of this factor is getting smaller and smaller, because manufacturers have done a lot of measures for environmental protection. 3. After the price bottom, manufacturers’ joint price increases.
4. Summary
Personal opinion, at present, the new low price of vitamin a acetate feed grade 0.5Miu/g is around 200RMB/kg, (28-30USD/KG). Its influence factors are mainly focused on the supply side, such as manufacturers’ occasional accidents, joint price increases, etc. Welcome to share your views.
