According
to market intelligence firm CCM, China is witnessing a boost in vitamins prices
recently, which is threatening the sufficient supply for feed manufacturers.
The
demand for vitamins significantly increased as the peak season for the
production of feeds comes. The tightened supply thus pushed up vitamin prices.
Vitamins price
The
price of many vitamins in China is soaring in the beginning of H2 2017, mostly
due to the strict environmental policies and the related increasing costs as
well as production cuts. Some vitamins, like vitamin B5, saw price increase up
by USD77,000 per tonne from June to September alone. This increase represents a
growth of more than three times in just three months. Vitamin D3 price, as
another example, was rising about 450% in the same period.
DSM,
the Dutch health and nutrition giant, has also announced to raise the prices of vitamin C produced in China by at least 10%. The explanation by the executive
management refers to the development of the production sites as well as
improving the environmental performance. It is worth notable, that over 90% of
the worldwide produced vitamin C is manufactured in China, along with many
other key vitamins.
In
August 2017, the fourth round of the central environmental inspection in China
has begun, which is lifting the already environmental pressure for
manufacturers once more. Furthermore, the air pollution treatment campaign for
the Beijing-Tianjin-Hebei region has started, which is one of the major regions
for vitamins production. Notably, the tight supply situation was strengthened
by an increasing export volume of many vitamins in recent months, which
followed the strong demand overseas for Chinese manufactured vitamins.
China
has shown great determination to treat environmental problems. As the
inspection is to be carried out, Shandong and Hebei, as the leading provinces
for vitamins production, will be affected to some extent. Those enterprises who
cannot meet the environmental standards will be definitely eliminated from the
market, which is to reduce the total production. What's more, demand from the
feed industry will increase as the peak season comes in the next half. In this
context, the price rise of vitamin products is predicted to continue in H2
2017.
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Impact on feed
producers
China’s
feed producers are getting under large pressure in the time of surging vitamin
prices. Nutritional additives for the animal feed production have been reached
up to three times higher prices.
As
a result, a growing number of manufacturers in China secretly lessens the input
of vitamins in their feed production to balance out the higher costs. However,
this leads to a nutritional level of feed quality under the accepted standards
of the Ministry of Agriculture in China. As a recently conducted study shows,
about one-third of China’s animal feed manufactures didn’t add the sufficient
number of vitamins for their products.
Furthermore,
the study revealed, that 38% of Chinese manufacturers have used an excessive
amount of copper and zinc for their feed, which in the end can be harmful to
the animals directly, but also to the environment and the human end consumer of
animal products like dairy products or meat.
Looking
at the vitamin types that are particularly lacking in Chinese substandard
feeds, vitamin B1 has the largest share of 26%, while vitamin A and vitamin E are following the ranks with 21% and 19%, respectively.
Vitamins in feed
Vitamins
are low molecule organic compounds, and essential for animal metabolism. It
cannot be synthesised in bodies of animals, so one way to get them is through
feeds. Mineral feed is generally a mixed feed that comprises of minerals for
the nutrition of farm animals enriched with vitamins, flavouring agents,
facilitating agents, as well as medicated ingredients.
The
worldwide feed premix market has grown to a market worth of around USD6.37
billion in the year 2016. According to market insiders, the general rate of
growth in the next years is estimated at a CAGR of 3.4%. Vitamins are
generally the major input into feed premixes.
Looking
at China in the global feed premixes market, the country is leading the
production together with the USA as it also counts as one of the fastest
growing markets for consumption among other BRICS states.
About CCM
CCM
is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets.
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