China direct

Analyst: Chinese vit. A prices doubled last year and will remain high

By RJ Whitehead

- Last updated on GMT

© iStock
© iStock

Related tags: Food, Shanghai

A tripling of the price of vitamin A in China in early 2016 led an overall increase of almost 99% for the year.

According to market analyst CCM​, the surge properly began in January when pharmaceutical major Zhejiang NHU was the first to raise quotes for their feed-grade vitamin A by 80%. The price of the supplement then spiked from just over US$16,000 per tonne in December 2015 to nearly US$49,000 per tonne in March 2016.

Price continued to rise more gradually until April, when they fell slightly, though in no way relative to their enormous growth earlier. By December, the price for feed grain vitamin A was set to US$41,329.5 per tonne, and is likely to stay at this level in 2017, CCM believes.

Recent months have seen a combination of rising global demand and tight supply caused by one major producer closing for maintenance in December for three months. As a result, as customers began looking to other Chinese manufacturers for supplies, the latter have been able set their own prices.

Moreover, in demand has been growing steadily since the start of 2016, especially ahead of the current Chinese New Year festival when the ingredient is traditionally popular, further leading to short supplies. 

CCM predicts that vitamin A supplies will stay limited into the second quarter of this year, this time due to the shortage of an major upstream ingredient, citral, when supply was hit by an explosion at its biggest supplier in Germany. 

Prices, in turn, will remain high, or even increase slightly, before global demand for vitamin A finally reduces. This will result in a moderate fall of prices as well, CCM says.

Shanghai doubles down on food safety policing

Already the authors of China’s toughest local food-safety regulations, Shanghai’s city authorities are planning to introduce stricter measures that could include banning some offenders from the food industry for life.

Presenting a draft regulation to the annual session of the Shanghai People’s Congress, the director of the Shanghai Food and Drug Administration said some of its measures would be even more stringent than in the national food safety law.

When it is approved, the new regulation will allow for lifetime bans for operators convicted of serious food safety crimes. There will also be a five-year ban for those whose business license is revoked, Yan Zuqiang said.

The draft stipulates local food business owners should set up management rules on the use of foods and additives that are near their expiry date, which is stricter than the national law​,” he told the media.

The legislation would “rationalise oversight, putting the FDA in charge of food safety from production to the end of the line​”, including catering services, he added.

Food safety is currently jointly overseen by the city’s quality watchdog, the industry and commerce authority, and the FDA.

Under the new legislation, inspectors will gain more access to online food services, and require food portals to supervise online advertising for vendors involved in food-safety breaches.

Other measures include requiring delivery men to obtain health certificates and setting out hygiene requirements for equipment, including carry and storage boxes.

Small outfits must register with subdistrict governments to continue operating. They must also meet hygiene, fire and safety and environmental standards, and received the approval of local residents.

The Chinese version of this story can be found here​.

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