MARKET UPDATE by Tony Xue, General Manager, ingredientsonline.com™ China
SINO-U.S. TRADE WAR At the time of writing this, a second China import expo is being held in Shanghai. This is one of the only global expos focusing on importation and aimed at improving people’s lives. The number of U.S. exhibitors has grown 15% from last year, and the Chinese media uses this as an example to tell U.S. administration that the Sino-U.S. trade relationship needs to be developed instead of thwarted. Unfortunately, additional duty fees have been added to many of the imported ingredients entering the U.S. from China. Fees range from 10-30% and cover all categories except vitamins. We are hopeful the additional tariff issues end soon so prices and supply return to normal.
5-HYDROXYTRYPTOPHAN (5-HTP) Price increased due to the tariff, and the supply from China is tight due to uncertainty of the starting material from Africa. B12 (CYANOCOBALAMIN AND METHYLCOBALAMIN) Since our last report, the price of B12 has decreased to a more reasonable level and remains there. BCAA The export cost from China is at a historic low in order to keep the market share in the U.S. Price has been stable for some time, and it is a good time to lock in a new blank order. BETA GLUCAN Supply is stable, and due to continuous investment in R&D and technological innovation, related ingredients’ cost will increase accordingly.
INGREDIENTSONLINE .COM™ • FALL 2019
as of 11/18/19
THE INGREDIENT SUPPLY RISES FROM NON-CHINESE ORIGIN Non-Chinese origin products are on the rise in the U.S. market, including those on ingredientsonline.com™, herbal extracts and pharmaceutical intermediates from India as well as amino acids from Indonesia, Japan, Brazil and Korea. Additionally, citric acid and chondroitin from Thailand are also on the rise. Many ingredients used to be primarily from China, but are now available from other countries; a redistribution of market share and trade channel based on natural resources, technology and development levels.
U.S. EXHIBITORS ↑ 15%
BETA-HYDROXYBUTYRATE (BHB) SALTS Many new factories have stepped into the BHB Salt market, which has led to some fluctuation in pricing. The Calcium, Magnesium, Sodium and Potassium forms are all being developed and produced, and higher bioactivity versions are available now. Formulators are attaching more importance to this product, and it should become very popular for weight management and energy production. BETAINE ANHYDROUS/BETAINE HCL/ CHOLINE BITARTRATE/CHOLINE CHLORIDE Tariffs are having a big impact on Chinese factories of Choline and Betaine. In order to maintain the market share, most Chinese factories absorb the losses, but generally, prices are stable. BIOTIN Price increased greatly, and most factories have stopped quoting. Price was very low
in the summertime, but when the stock was consumed and new production was not ready, supply got tight again. This trend will continue until early next year when the Spring Festival in China concludes. BOVINE BONE COLLAGEN PEPTIDE (TYPE I) China used to be the largest producing country of this ingredient, but due to the trade war and increasing labor and starting material costs, their competitiveness is decreasing. Meanwhile, large countries in South America and Europe with a developed feed industry have taken more market share to produce Collagen, and it is expected actions will be taken by Chinese factories to keep their U.S. market share. CALCIUM D-PANTOTHENATE (B5) The availability of B5 is very limited and the price is very firm toward the end of the year.
M A R K E T U P DAT E
CARNITINE SERIES Supply has remained tight for more than a year. Demand has increased consistently but supply cannot catch up due to environmental controls. The supply issue will not end until next July or August based on information received from the factories. CHONDROITIN As was with our last report, competition is very fierce, and availability is good. CITRIC ACID ANHYDROUS The market remains stable, and factories are fulfilling most blanket orders based on release schedules. China still plays a large role in the Citrate Salt production and are competitive in terms of cost and quality. If the antidumping policy does not change, the market will remain the same. COENZYME Q10 (COQ10) Price has tripled in the last two months. The major reason for the increase is the limitation of production capacity under the supervision of the Chinese government, and the strict environmental controls may last until early next year for both major factories
in China. Due to low prices the last two years, some new producers have gradually stepped out of the market. We will see if anyone steps back into production in next few months if the price remains at such a high level. CONJUGATED LINOLEIC ACID (CLA) OIL AND POWDER Supply and price are currently stable. CREATINE MONOHYDRATE Price has been increased due to duty fees, and factories in China are carefully changing pricing so that the effect on customers remains minimal. CURCUMIN The oversupply issue is ongoing for Curcumin, so most sellers and factories are trying to promote the stock price to move it faster. Chinese factories were the first to act, followed by Indian factories. The market will be determined by the next harvest and we will continue to monitor it. D-XYLOSE/XYLITOL/XYLITOL DC These ingredients status have not changed
since our last report, and supply and demand are now balanced. FOLIC ACID Supply is better than before with new producers in place. However, it is important to understand that Folic Acid is a product that can easily cause issues due to pollution, so stocking up ahead of time is always recommended. Although prices have been up and down this year, they are now stable, but this could easily change at any time. GABA Supply and demand and price are stable. GLUCOSAMINE Currently, there is a trend where customers are beginning to use vegan-sourced Glucosamine rather than the traditional animal source for the “green and natural” concept, and prices are stable for both sources now. GREEN COFFEE BEAN 50% The market remains the same since our last report with supply and demand balanced. Both China and India can supply, and there are no tariff issues so far.
INGREDIENTSONLINE .COM™ • FALL 2019
M A R K E T U P DAT E
Shandong Jincheng Bio-pharmaceutical Co., Ltd is a publicly listed company in China and is honored as a National High-New Technology Enterprise. Main products are manufactured by microbial fermentation technology and advanced biological extraction and purification technology.
• L-Glutathione Reduced • S-Adenosyl-L-Methionine (SAMe) • Ademetionine Disulfate Tosylate • Ademetionine 1,4-butanedisulfonate
• AA2G • L-Alanyl • L-Hydroxyproline
• Pyrroloquinoline Quinine Disodium Salt (PQQ) α-Ketoglutaric Acid series of products
Jincheng Pharm holds GMP, Kosher and Halal certificates.
Glutathione has DMF registration in Japan, Korea and India.
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Shaanxi Jianhe Bio-Technology Co., Ltd
• Alpha GPC
• Beta Glucan
• Isoflavones HPLC
• Kudzu Root 40%
INOSITOL There are no signs of any big changes, and the price and supply remain stable. L-ARGININE/L-CITRULLINE Price has bounced back slightly, and demand inquiries have been on the rise for Arginine and related products such as Arginine Alpha Ketoglutarate and Arginine HCl, but not for Citrulline yet. L-CYSTEINE/L-TYROSINE Prices tend to be firm now and may increase slightly by the end of the year. The factories who produce Cysteine and Tyrosine by hydrolyzation may further increase Tyrosine prices, as it is only produced in China. Cysteine price increases may be a little slow, as it is also produced in China. L-GLUTAMINE The current price in the U.S. market is soft due to fierce competition, and the two major factories in China are competing over pricing to gain a market share advantage. Meanwhile, importation to the U.S. from Japan and Korea is on the rise without concerns over duty fees. L-GLUTATHIONE REDUCED Usage keeps increasing, and the factory is making the supply meet demand. However, with the increased duty fee, new producers are in the market, so profit is slightly decreasing. L-LYSINE/L-THREONINE Prices are currently at a low but will increase slightly in the coming month, and the export of Lysine and Threonine from China increased in Q2 and Q3. The major factories can make a profit with other products, so they are trying to use a low price for Lysine and Threonine in the international market to gain more business in the future. L-TRYPTOPHAN The demand for L-Tryptophan has not changed much, so the supply remains good with a soft price. LUO HAN GUO (MONK FRUIT) EXTRACT The starting material cost has doubled, with the output from the new harvest not coming out yet. The current quoted price has increased 10% since last September and is expected to go up again at the end of the year.
• Melatonin • Olive Leaf P.E. 10%/20%/40% Oleuropein • Pine Bark Extract 95% (PROAN) • Policosanol 99% min. (Octacosanol 60%) • Pomegranate P.E. 50% Polyphenols • Quercetin Dihydrate 98%
SHOP JIANHE PRODUCTS at www.ingredientsonline.com
INGREDIENTSONLINE .COM™ • FALL 2019
LUTEIN The harvest is poor due to drought and waterlogging. Therefore, the price is very firm now and will get higher by year’s end. METHIONINE Price has increased slightly due to the large increase of usage in the feed industry in China. MSM The starting material DMXO is stable and the price decreased by $0.10-0.20 USD/kg since our last report. The price differences from different sources are mostly due to different processes. If the refining process is distillation, the price is higher. If the refining process is crystallization, the price is lower, and how many times the refining process takes place also affects cost. The more it is refined, the better the purity and quality will be, so customers
M A R K E T U P DAT E should use the right grade with the right price for different uses such as feed, animal nutrition or human food. PHOSPHATIDYLSERINE Price has been affected by the increased duty fee, even if the cost is currently stable. It is still largely needed in the U.S. market, and even with the increased duty fee, the sales continue to grow. PYRIDOXINE (B6)/THIAMINE (B1) In general, price is stable or a little lower than usual, and availability keeps improving. Most factories are running the production now with firm price offers. RIBOFLAVIN (B2) Due to oversupply and extremely low prices, some factories have stopped quoting. It will take three to six months before the market warms up again. SODIUM HYALURONATE The production capacity has been expanded, and it is expected the supply will meet the demand better than two months ago. We predict the usage will continue to increase rapidly, and in the meantime, the cost will come down gradually with the development of technology. SPIRULINA Price remains stable, and the demand keeps growing. Some new formulations have indicated the need for Spirulina, and more species of Spirulina have been found with different health benefits in recent years. There is also great potential to develop the usage in the future. STEVIA As we stated in our last report, the harvest for this year is poor due to less motivation to grow the plant. Price has been increasing for two months and this trend will continue into early 2020. SUCRALOSE Price is bouncing back slightly, but not too much. The major reason is that the price was too low to make any profit and factories are trying to increase slightly to create balance. TAURINE Prices for the starting material EO are up slightly but factories are still able to absorb the cost. Taurine price will likely increase if the EO price continues to increase. TONGKAT ALI (LONGJACK) EXTRACT Supply tends to be stable, and the starting material supply is getting better. Suppliers advise this stable trend will continue for two to three months. VITAMIN A The major factories have announced a price increase, including NHU, BASF, etc. Supply is a little tight, but price remains stable. VITAMIN C (ASCORBIC ACID) Price remains at a historically low level. Some factories have tried to move inventory out, and some deals at an even lower price have been made. Output reduction and promotion are both going on, and the low-price trend may continue for some time. VITAMIN E Production from the major factories are normal now, and availability continues to improve.