In the California-based firm’s latest market update, bosses blame higher prices on four key factors:
• Supply issues at major manufacturers
• Increasing market demand
• Raw material shortages
• Environmental restrictions imposed by the Chinese government.
They add: “We suggest buyers plan their supply for Q2 and Q3 in order to avoid shortages. We encourage you to share your projections with DNP, so we can help you customize your procurement plan for the next three or six months."
L-Glutamine: ‘Highest prices in history’
While demand has firmed for several nutraceutical ingredients, DNP says the price of sports nutrition staple L-Glutamine in particular has gone through the roof.
“Since one of the major manufacturers, Chengzhi, shut down production, the price has been going up continuously and is currently at the highest price in history.
“Some of the manufacturers with fermentation technology are trying to step in, and some manufacturers are trying to produce glutamine via a synthetic method, but as far as we know the overall output is still very limited.”
L-Leucine price is ‘skyrocketing’
As for L-Leucine, the price “is skyrocketing now due to the availability being limited”, claims DNP.
“Leucine can be produced from hydrolyzation as well as fermentation, but neither of them can provide enough availability. Hydrolyzation is facing pollution control from the [Chinese] government and the fermentation product line is scheduled for other products.
“Meanwhile, BCAA (branch chain amino acids) supply is short in Japan, which leads to a greater demand for Chinese Leucine, which is the key ingredient in BCAA.”
Moving onto L-Isoleucine, “one of the major manufacturers switched its production line and it is not producing Isoleucine in 2012”, notes DNP.
“Since then, the price has increased more as time goes by and the supply is getting tighter. The market is at a very high level and we are seeing the trend will continue toward the second half of 2012, unless some manufacturers reopen the production line of isoleucine."
L-Tyrosine: ‘Market at a reasonable level’
L-Tyrosine, meanwhile, is ”mainly produced from hydrolyzation and this method very easily leads to pollution”, adds DNP.
“The Chinese government controls pollution now more than ever, so the manufacturers have to decrease their output to reduce the impact on the environment.”
But it adds: “Not belonging to BCAA, Tyrosine is stable in demand, so currently the market is at a reasonable level.”
L-Citrulline prices very firm
Citrulline prices are currently “very firm” for two reasons, claims DNP. “One, citrulline is derived from arginine and [leading arginine manufacturer] Shinestar is relocating its facility.
“Two, the demand for citrulline is being boosted in the bodybuilding industry to replace arginine. Studies suggest that bodybuilders feel the pump more intensely after taking citrulline, which is getting popular among top brands like Muscletech and becoming a key ingredient in formulations.”
Demand for L-Carnitine is also strong, particularly in North America, it adds. “Carnitine base, Carnitine Fumarate, Acetyl l-Carnitine HCL and especially Carnitine Tartrate [supplies] are all tight.”
MSM: Supply issues
However, pricing issues also extend beyond amino acids into other key ingredients such as MSM (Methylsulfonylmethane), notes DNP.
“The starting material cost increased and there is an extreme shortage, which is leading to a higher price for this product. One of the major manufacturers informed us that it is unable to get the starting material to run production.”
Finally sucralose supplies from China are also struggling to keep pace with demand, it warns. “DNP has been proactive to secure supply as much as possible. However, there is still a challenge; it will take about half year or even longer to resume balance between demand and supply.”