Methanol spike forces BASF vitamin hike

By Jess Halliday

- Last updated on GMT

Related tags: Material, Vitamins, Cost

BASF has announced that the price of its food grade vitamin A is to
go up by 12 per cent due to raw material costs - in particular a
sharp rise in methanol prices that is likely to impact a range of
industries.

Yesterday's announcement comes a week after the German chemical group announced that it is upping the price of food grade vitamin B2 by 20 per cent. Feed grade vitamins B2 and E have also been affected in recent weeks.

A BASF spokesperson told NutraIngredients.com that one of the raw materials that has necessitated the increase was methanol - a petrochemical that is also used in the production of vitamin E. BASF said last month that the price food-grade vitamin E was also likely to go up, but there has been no more news on this front to date.

Methanol is used in the production of a wide range of products, including cleaning fluids, plastic bottles, paints and synthetic fibres.

According to a Methanex, a major global supplier of methanol, European methanol prices rose to €400/MT on October 1, from €250/MT in September.

A spokesperson for Methanex told NutraIngredients.com that this dramatic rise is due to several very large outages - planned and unplanned; some major plants have had to shut down production because of equipment issues.

This has caused severe supply issues and global inventory levels are at a minimum. As with all commodities, with supply outstripping demand prices have increased to help re-balance the situation. But the spokesperson said there is no quick fix: he expects prices to remain high until at least the middle of next year.

BASF, meanwhile, is facing this prospect with a measure to realism.

"A number of raw materials have increased over the last 12-18 months, which have not yet been recovered through price adjustments,"​ said the spokesperson.

Indeed Methanex historical price charts show that methanol prices in Europe have followed an overall upward trends since it started tracking in January 2002. This has been due to high energy prices.

BASF has said it is also looking at other measures to solve the cost squeeze being exerted on it vitamin portfolio: "We are constantly optimizing our cost structures."

While vitamins A and E are produced by chemical synthesis, B2 is made via a fermentation process. Thus, the price increases of this vitamin has a different factor at its root.

Amongst the vitamin A products affected by the increase is BASF's new Dry Vitamin Acetate 250 DC/GFP, a product launched just two weeks ago that aims to meet specialist needs for all markets (including vegetarian, kosher, GM-free, gluten-free, dioxin-free).

BASF did not specify the ballpark of the new price, since the tag carried by each formulation depends on its vitamin A content, the application, and the region in which it is sold.

Related topics: Suppliers, Vitamins & premixes

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