Market Update: April 2022
by Tony Xue, General Manager, Ingredients Online China
Many experts expected the pandemic to be over within 2022, but we are still experiencing more and more uncertainties due to Covid. The supply chain is being disrupted due to new lock-downs in China, the Ukraine war, and inflation control measurements. Learn more about the supply chain and the ingredients being affected in this quarter’s market update.
New lock-downs in China
Currently, China is still implementing a zero-case strategy to get Covid-19 under control new lock-downs are being implemented in different cities at different times. All outside activities are not allowed unless for necessities such as medical emergencies and food supplies. Lock-downs can range from a few days to more than one month. City-wide testing is carried out every 2-3 days. As a result, there have been shipment delays from these specific cities.
Ukraine War
The two countries of Russia and Ukraine play an important role in the oil, gas, grains, and fertilizer supply. Ingredients such as corn and soy are being affected because their starting materials come from oil or grains. These shortages will continue regardless of if the war ends or continues.
Inflation Control
The first round of interest rates has increased by 0.25% and is closely being monitored to balance between boosting the economy, prices, and debts. The current inflation rate is 7.9%, which is the highest it has been in 40 years. We can predict the high price level will continue into Q2 and Q3.
Logistic challenge
Logistic challenges remain the same such as port congestion. The sea and air freight costs are still high although vessel availability has improved over the last couple of months.
Ingredient Updates:
Ascorbic Acid
The price was stable from January to March and is expected to be stable through April and May.
Ascorbyl Palmitate
Price and supply are stable.
Aspartame
The supply is currently stable and is thought to decrease in the coming months.
B12
Prices are currently decreasing. Most factories are adjusting prices to be lower to help move the stock.
Beta-glucan
Price and supply are stable.
Betaine Anhydrous, Betaine HCl, Choline
Price is on a rise due to starting material price increase. Some factories have reduced or stopped production due to the pandemic.
Beta-Nicotinamide Mononucleotide
The price is coming down as more and more factories are able to produce. Greater competition will be in the marketplace in the coming months.
Bovine Collagen Peptide
The price increase is becoming obvious among factories, but it may take some time for the US manufacturers to see the results of it. It is expected the price will be firm throughout Q2.
Citric Acid USP
The demand tends to be stable now but may get short again in June and July due to an expected strike. It’s downstream of products such as calcium citrate, magnesium citrate, and zinc citrate demand keeps increasing.
Curcumin 95%
Both price and supply are stable.
Caffeine
Due to the starting material shortage, the price is at a high level and the supply is very tight.
Creatine mono
The starting material supply is still very short and the price is at a very high level. This will continue into Q2.
Chondroitin Sulfate
Currently, the price is at a high level and is not likely to decline. Due to the pandemic, the supply is short.
Carnitine Series Products
Price tends to be stable but still at a high level from now into Q2.
D-Alpha Tocopheryl Succi 1210IU SF
The price is increasing continuously as it is a grain-related product.
DL-Malic Acid
The price will increase due to oil prices.
D-Calcium Pantothenate
The price is at an extremely high level and is expected to come down to a more reasonable level within the next few months.
Erythritol
The price tends to be stable or soft with production expansion.
Ferrous Fumarate
The price will start to increase due to oil price increase and this includes other fumaric acid-related products.
GABA
The production is disrupted by the pandemic and the price is increasing greatly and will continue in Q2 and Q3.
Glycine
The antidumping issue against China is contributing to the supply shortage. Although there are producers from other countries, the supply is still very short due to large demand.
Ginger
The supply is getting better and prices are at a more reasonable level now.
Guar Gum Powder
The supply and price are both stable. It could be used as a replacement for xanthan gum which is now very short in supply due to the Xinjiang Act.
HPMC
The price keeps increasing due to the reduced production output of the fiber. Product to be used in more applications, particularly in food. The overall sales volume is increasing gradually.
Inositol
The supply is very short now and the price is at a historical high. Due to the shortage of corn price and supply issues. This trend will continue in Q2.
Lecithin
Due to the ongoing Ukraine crisis, there is a huge shortage of raw materials. Currently, suppliers have put a hold on the supply of sunflower lecithin liquid.
L-Theanine
It is now at the stage of oversupply and the price competition is great.
L-Tryptophan
The food grade, particularly the granular grade with high density is in demand. The feed grade price is stable.
L-Glutamine
Price now is at a high level but tends to be stable. However, The Xinjiang Act brings uncertainties to the supply, and we need to watch closely for the supply.
L-Cysteine HCL, N-Acetyl L-Cysteine
The price has adjusted from a high level to a more reasonable level now.
L-Tyrosine, N-Acetyl L-Tyrosine
Price has adjusted from a high level to a more reasonable level now.
L-Arginine, Citrulline, AAKG 2:1
The price of arginine tends to be more stable. Due to the high level from last October to February, we think the price will start to adjust in Q2. Many factories have enlarged the production output and there might be some great competition in the market in Q2.
L-Leucine, L-Isoleucine, L-Valine, IBCAA
The price tends to be stable for the hydrolyzed grade and high for the fermentation grade.
L-Lysine, L-Threonine, DL-Methionine
There has been a mild increase in price for the above products. Due to the Ukraine war, the price of grains for the feed industry has increased and this brings lysine, threonine, and methionine on the same trend.
Lutein
The harvest is not as great as the previous year and we expect the price to be high and continue to increase.
Magnesium Stearate
The price keeps increasing due to the increased demand for stearic acid from palms.
MCT
The price is increasing due to the tight palm oil supply in South Asia.
Microcrystalline Cellulose USP
The price is stable at the original factory site, but the sea freight cost plays an important role in the final sales price. The shipping schedule is long and it is suggested to preplan orders.
Monk Fruit
Price tends to be stable and adjusted to be lower due to more competition.
MSM
Starting material supply is getting better, but the price is firm.
Niacin, Niacinamide, Thiamine, Pyridoxine
The supply and price are stable for now.
Pea and Soy Protein
The price is firm but may increase little by little due to the Ukraine war.
Quercetin
The price has been going up since the middle of last year and we do not see the end of this increase yet. The harvest of starting material will be available starting in June, so before that, the supply will still be very tight. Some factories are trying to use different starting materials and we will monitor the market in the next release.
Red Beet Root
The price is stable, but supply is still limited due to the raw material red beet harvest and increased demand.
Riboflavin 5 Phosphate Sodium USP
Both the price and supply are stable
SAMe Tosylate Disulfate
The supply is very tight and short due to increased demand during the pandemic, while the production output is fixed and can not expand in a short term.
Spirulina
The factories are now consuming the stock only to supply and a new harvest will be available end of April. The demand has been increasing continuously and with all the energy and labor costs increasing, the price will go up step by step further.
Sodium Copper Chlorophyllin
The supply is getting better. The increased profit motivates the farmers to produce more starting material this year and we expect the price to be more and more stable.
Sodium Hyaluronate
The production output has been greatly increased over the last two years and the price is at a low level now. However, it is moving in the right direction.
Taurine
The price is increasing fast due to oil price increase and it is expected to be higher in Q2 due to the Ukraine war.
Vitamin E 50% Powder, Vitamin E 98% Oil
The price is increasing due to oil price increase.
Xylose and Xylitol
The starting material is short due to the pandemic and the supply is very tight.
Yeast Extract
The production has been normal, but the shipments sometimes are delayed. With the labor and raw material cost increase, the price is firm and on an uptrend.
Disclaimer: Information presented in this article are for customer reference only and subject to market fluctuations due to limited research and resources. Trends are current as of April 2022.
Tony Xue is the general manager of ingredientsonline.com China. His expertise supports market analysis, procurement forecasts, and vendor relationship management. Tony holds a bachelor's degree from Shanghai Foreign Studies University and has been working in the ingredient industry for 14 years.