Insomnia herb price hike causes sleepless nights for suppliers
5-HTP supplier, Jiaherb, the US branch of China-based Shaanxi Jiahe Phytochem, said US manufacturers have cut production and ended lines as the price of the amino acid typically used as a sleep aid has spiraled.
An overly wet season resulted in a bad harvest which has sparked a series of events including deliberate stockpiling and outright exploitation that has fed the hyperinflation, Jiaherb vice president, Charlie Wang, told NutraIngredients-USA.com.
“The seed price has gone from $4-5 to $20 and the farmers expect that now and so the suppliers have increased their margins,” said Jiaherb vice president, Charlie Wang. “This is potentially damaging for a small industry and that is why we are trying to get our major clients to sign fixed price contracts at reasonable prices to stem the price rises.”
The cost per kilo has jumped from about $200/kg for the 2007 harvest, to about $2000/ kilo for the 2009 harvest – with volumes dropping 10-20 percent.
Most 5-HTP is sourced from Ghana and processed in China (70 percent) and India (30 percent), with about 20 metric tons sold in the US in 2009 and worth around $10m.
The price hikes have seen US dietary supplements companies withdraw products as the cost of the ingredient has climbed too high.
“Nobody is going to pay $100 for a bottle of pills,” Wang said, noting the 2010 harvest was looking better.
In a statement, Wang said: “We recommend going directly to the ingredient manufacturer before the start of the annual ingredient collection season which begins every January, and lock in a price. The coming harvest season will set the price for the following year,” Wang said. “Obviously higher costs must be passed on to the end user. But just how much will consumers be willing to pay?”
