Vitamin E prices set to rise as DSM blames raw material hikes

The company said yesterday the rise would be applicable across the food, pharma and personal care industries with immediate effect. DSM said that this latest increase was not only driven by raw material, energy and transportation costs but for a "higher demand" for the vitamin. The hike will not come as a shock to the industry, as DSM has already felt the pinch of raw material increases and planned a worldwide increase on its vitamins and carotenoids last April. Prices for vitamin E in the animal feed market have already gone up. BASF has also raised its prices for feed grade vitamin E products by 11 per cent last September, again due to energy and raw material costs, and warned then that food and supplement grade vitamin E would also increase. Past studies have linked vitamin E to a host of health benefits, such as improving the function of the liver and thereby strengthening the body's defence system, as well as helping to protect against Alzheimer's disease, and boosting heart health. It is also thought to have an anti-cancer effect. The demand for vitamin E is expected to grow over the next five years. A report by Frost & Sullivan last year said the Western European vitamin E market saw revenues of around €72.4m in 2004. It predicts that the market will grow by around €105m by 2011 Despite the rise in raw materials, both DSM and BASF have made efforts to increase production of the vitamin over the past few years to meet this increasing demand. BASF said this summer it would increase its annual capacity of the chemical intermediate propionic acid - a major component in the production of vitamin E - at sites in Germany and China. It hoped to boost overall capacity from 110,000 tonnes to 149,000 a year. In 2004 DSM lifted its vitamin E capacity to 25,000 tons. Both DSM and BASF, the two leading European players for vitamin E, have come under significant price pressure from lower cost production and ready supply from China in recent years.