Increasing costs will increase the price of folic acid in China

Increasing costs will increase the price of folic acid in China

Chinese manufacturers of folic acid announced that the increase in production costs in China since December 2020 has inevitably caused the price of folic acid to rise; But probably due to the limited demand, this price increase in the market will not be of much benefit to the producers.

China is one of the key suppliers of folic acid or vitamin B9 in the world; The main producers in this country are: Shengda, Xingnong, Niutang, Xinfa, Xinfu, Tianxin. In mid-December, in response to high production costs, some manufacturers stopped supplying vitamin B9 for two weeks.

At the beginning of December, fast shipment of goods with FOB shipping terms was 24 dollars per kilogram, which reached 40 dollars per kilogram at the end of the year. A Chinese producer stated that in mid-December, many producers stopped offering prices for two weeks, and even at $30 per kilogram, no one was willing to sell.

Therefore, the price of folic acid with FOB shipping conditions reached 45 to 48 dollars per kilogram, which is almost double the 24 dollars at the beginning of December. Business activities have slowed down due to the Spring Festival and Chinese New Year holidays, February 11th to 17th, which includes the transportation of goods, which can lead to delays in the delivery of goods and their exports.

On the other hand, due to the low price of folic acid, consumers did not see the need to sign seasonal contracts for the supply of goods, and this has caused a decrease in their inventory. In order to control the spread of the corona virus, the Chinese government implemented quarantine regulations in several provinces in January; As a result of these actions, China’s transportation system has reduced its activity earlier than in previous years. Many consumers were concerned about the disruption and irregularities of transportation after the Chinese New Year holiday; Because these disruptions can delay export activities until March.

While many have estimated the possibility of increasing the price of vitamin B9, they do not expect the price peak of 2015 and 2018, when the price of folic acid reached 400-500 dollars per kilogram. (Read more in the comments)
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