October 6, 2006

 

Methanol spike forces BASF vitamin hike

 

 

BASF announced increased prices of its food grade vitamin A by 12 per cent due to raw material costs ¡§C in particular a rise in price of methanol.

 

The German chemical group's recently announced a 20-percent increase in food- grade vitamin B2.. Prices of feed-grade vitamins B2 and E have also been affected in recent weeks.

 

The hike in prices could be attributed to rising prices of methanol, a petrochemical also used in the production of vitamin E, according to a statement by BASF.

 

According to Methanex, a major global supplier of methanol, European methanol prices rose to EUR400/tonne on October 1, from EUR250/ tonne in September.

 

This rise was due to several large outages - planned and unplanned; some major plants have had to shut down production because of equipment issues, according to Methanex.

 

With supply being severally affected and global inventory levels at a low, prices were bound to rise. There however, seems no quick fix until at least the middle of next year, according to the spokesperson.

 

According to the Methanex historical price charts, there has been an overall upward trends surrounding methanol prices in Europe since January 2002 due to high energy prices.

 

BASF said it has considered measures to solve the cost pressure exerted on its vitamin portfolio.

 

Reasons for a hike in price of vitamin B2 however could be different as it follows a fermentation process unlike vitamins A and E which are produced by chemical synthesis.

 

Amongst the vitamin A products affected by the hike included BASF's new Dry Vitamin Acetate 250 DC/GFP, which was launched just two weeks ago with an aim to meet specialist needs for all markets.

 

The new price has not been specified by the BASF, since the tag carried by each formulation vary according to its vitamin A content, the application, and the region in which it is sold.