Chinese vitamin C supply could be under threat

By Alex McNally

- Last updated on GMT

Related tags: Vitamin

The face of the vitamin C market may be on the verge of change as
reports circulate that prices from China - the world's primary
supplier - are rocketing.

According to CBS News, production in the country has been cut over the past several months, pushing prices up by more than 200 percent to a four-year high. An increase in raw material prices and regulation of environmental laws are said to have been behind the supply problem. The news also focuses fresh attention on the risks of the world's growing dependence on China for the vitamin. If problems persist it could also be seen as a welcome sign to European producers, who in the last few years have cut production due to an influx in Chinese vitamin C. CBS said that since January, prices have risen from $3.40 a kilo to $11 a kilo for vitamin C. According to China Daily, the price of a kilogram of bulk vitamin C has been put at anywhere from $12 to $21 as of the end of July. In the first quarter of this year, it was reported having been at an average price of only $3.55 per kilogram. China makes 60 per cent of the world's vitamin C supply, with the four leading Chinese producers making 60,000 tons. About 80 per cent of this is exported to Europe. In the last two years BASF and DSM have closed production facilities because of Chinese competition. Dutch-based DSM is the only Western company that still makes vitamin C (ascorbic acid), concentrating production in Scotland since shutting down its US plant. At the time of closing production in New Jersey, the cost of vitamin C dropped to as low as $2 per kilo. A spokesperson for BASF said it was "aware of the issue,​" but declined to comment as to whether it would have an influence on production in the future. The fall in Chinese production has been blamed on the Chinese government enforcing environmental rules, according to CBS. The publication says one vitamin C supplier had reduced output to limit wastewater emitted because of those rules. Another problem facing the Chinese market is that four of the biggest producers are also facing a price-fixing suit in a New York court. The rising cost of corn, used to make vitamin C, is also thought to be pushing up prices. China has remained a continued interest for the European vitamin and ingredient industry, as it is seen as a source for cheap production. Just yesterday DSM said it will restructure manufacturing at its Nutritional Products arm in China, a move it called a "big step" in its plan for Asian expansion. The company said it will develop the Xinghuo site, Shanghai, as a "strategic" manufacturing base for DSM. The move comes just two years after the company started its first R&D centre in China.

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