BASF raises vitamin E prices to offset costs

By Jess Halliday

- Last updated on GMT

Related tags Cost

BASF has announced an increase in the price of its feed grade
vitamin E products as of next week due to energy and raw material
costs, and it is "very likely" that food and
supplement-grade vitamin E price rises will follow.

BASF has been battling high raw material prices for some time; when reporting its Q2 results in August record raw material costs have increased pressure on margins, and that price increases to reflect rising costs will be necessary in the future. Today's news sees worldwide price of its feed grade products rise by 11 per cent as of next week.

A spokesperson for the German chemical group told that from a cost point of view, there are no major difference between food and feed grades. "The food vitamin E is currently in the process of price/cost evaluation,"​ she said.

In June BASF announced that it was increasing the prices of propionic acid, a building block of vitamin E, which it was thought could have a knock-on effect on world vitamin E prices - although the extend of this would, of course, be down to the individual producers.

At the time no comment was given as to how this would affect BASF's own production, but the spokesperson said today that it was not a major influence.

"Propionic acid is only one of the raw materials used for the vitamin E production process."

Nor is BASF the only vitamin producer to feel the pinch of raw material costs, and be driven to pass these on to consumers.

For instance DSM increased process of its vitamins and carotenoids on a worldwide basis in April in a bid to compensate for costs, which were said to hit the nutrition division hardest in its fat-soluble vitamins and carotenoids product ranges.

However DSM said in July that will be a delay before further cost increases experienced by the group as a whole can reasonably be passed on to customers, particularly in "a number of end markets where an increased resistance to further price increases is noticeable"​.

According to a report published by Frost and Sullivan last year, the Western European vitamin E market saw revenues of around $100m in 2004. It predicts that the market will grow be around $145m by 2011.

In the last couple of years the vitamin E sales at consumer level have been impacted in some markets by negative publicity over scientific studies - although the supplements industry, especially in the US, has sought to mitigate this by highlighting shortfalls in the methodology.

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