July 25, 2007

Reduced vitamin C exports from China fuels international price rise

According to China's Customs General Administration, exports of vitamin C dropped by 24 percent in May 2007 from the month before, from 6,537 tonnes in April to 4,857 tonnes.

Chinese manufacturers, which export more than 80 percent of the world's vitamin C--also known as ascorbic acid--appears to have scaled back on production over the past few months, pushing prices up by more than 200 percent to a record high of US$11/kg. According to a US media source, some 90 percent of vitamin C products in the US market were produced in China.

Market participants said that the lower vitamin C production was a result of the Chinese government's drive to enforce pollution limits on pharmaceutical and chemical companies.

Other than the more stringent enforcement of environmental laws, higher cost of raw materials, and the reduction of export tax rebates by the Chinese government were also cited by traders as reasons for the surge in vitamin C prices.

RMB1=US$0.1323 (Jul 25)