September 22, 2006

BASF raises prices of feed grade vitamin E products

BASF has announced an increase in the price of its feed grade vitamin E products as of next week and it is "very likely" that food and supplement-grade vitamin E price rises would follow on its heels.

BASF has been absorbing high raw material prices for some time and the company has hinted at price increases when its Q2 results in August indicated the rise in raw material costs have cut deeply into margins.

The company said it would increase its prices worldwide of its feed grade products by 11 percent as of next week.

In June, BASF announced that it was increasing the prices of propionic acid, a component of vitamin E, which it thought would have an effect on world vitamin E prices. However, the effects of that increase has been limited.

BASF's price increase follows DSM's announcement in April that it has been hit by rising material costs for vitamins and caroteniods. However, the company said in July there would likely be a delay before increased costs would be passed on to customers.

The Western European vitamin E market was worth around US$100m in 2004 and would grow to around US$145m by 2011, according to a report by Frost and Sullivan last year.