Current Impact of CORONAVIRUS on Some Vet APIs and Vitamins

It was officially announced that the event VICTAM and Animal Health and Nutrition Asia 2020 has been postponed to 9 – 11 July 2020. We shall be glad to come back to contact you in the middle of June.

Current Impact of CORONAVIRUS on Some Vet APIs and Vitamins

A sudden outbreak of the COVID-19 epidemic in Hebei province, China, before Chinese traditional New Year, then rapidly spread to the whole country and even across the borders. The global emergency is undoubtedly bringing a negative influence to the production and sales of Chinese API, and pushing the first global domino.

As estimated by The World Health Organization (WHO) that China supplies approximately 20% of the global production of API, and more than 60% of them are sold overseas, mainly in bulk such as antibiotics, vitamins, amino acids, antipyretic and analgesic drugs.

Antibiotics

The Spring Festival holiday was extended by two weeks, not until February 20 were work and production gradually resumed. Depletion of inventory and previous delivery difficulties have resulted in dynamic trading of APIs at both home and abroad, and rising prices on the other hand. Doxycycline, for example, price is going up 13.2%, while Florfenicol price 6.7% up this year.

With the ease of the epidemic situation in China, most of the veterinary medicine raw material plants have started production in succession, logistics and transportation have begun to resume as well, and the whole supply chain has been gradually opened up. However, due to the labour shortage and previous traffic disruption, a few of plants' production capacity is limited, and market supply still remains tight. In short term veterinary API prices will continue to be strong and firm, even possibility that the prices of some certain products are shifting up like a rocket.

At the moment, what we need to note is that the outbreak and quick spread of the virus in the rest of the world with increasing number of infected cases. These countries have taken many effective measures, such as locking down cities and countries, and closing public places with large population. This pandemic already produces new impact on the global supply chain for veterinary pharmaceutical raw materials, for which we must begin to make preparation in advance.

With the resumption of logistics and transportation, local feed mills and premix producers finished purchasing for stock replenishment, but there are still a part of small and medium-sized users unsatisfied, some plants still in quite tight delivery, especially in key products such as vitamin A, vitamin E, vitamin B1, and biotin, etc., Domestic vitamin market is currently firm in price and on steady upward.

Before the Spring Festival (Chinese New Year- 25-31/Jan), the outbreak of COVID 2019 in Wuhan, Hubei Province, has drawn much concern on the issue of punctual shipment. The price of some European origin products (vitamin A, vitamin E, biotin, and vitamin D3) rose sharply as a corresponding response, with some products price rising more than that in China market. In recent days, the coronavirus spread has accelerated worldwide, which will result in an absolutely significant impact on the global supply chain of feed additives.

On March 8, BASF announced that it would work closely with the health authorities to take further measures after an employee was quarantined following the confirmation of coronavirus infection. Therefore, a risk is on the way affecting the supply of Vitamin A and E, which directly leads to the recent price rise. Keep an eye on the international pandemic situation and see how it impedes production and/or logistics.

Vitamin A: current domestic market price 550-580 yuan per kg, European market quotation 74-75 euros per kg, the market price is on a further upward trend.
At domestic market, inventory level is low, the supply tight while the inquiry active. Some 51% of the production capacity of Vitamin A is outside China (BASF, DSM, ADM, etc.), At the same time, Chinese manufacturers imported gelatin in large quantities as raw materials. Hit by the epidemic, the market is worrying about the production and supply status of overseas factories. Domestic plants have stopped signing new contracts and controlled delivery, except of export-oriented orders, it is relatively difficult to supply to small and medium-sized buyers.

Despite the fact that the market price is at a record high in recent years (the market price of the Vitamin A in December 2018 was 550 yuan per kg), Approximately 84% of participants in an online poll conducted by MoBao.com last week believe the Vitamin A price would continue to go up, 13% participants were bearish, and 3% thought the price would remain stable for some period.

Vitamin E: current domestic market quote 75-88 yuan per kg, continues to rise slightly compared with last week,but increased almost 50% compared with before the grave epidemic. Traders in the European market quoted 8-8.5 euros per kg, which has risen sharply from 5-5.5 euros per kg before the Spring Festival (25-31 / JAN).

We are in a position to supply the following vet APIs for prompt shipment: Florfenicol 500kgs , Tilmicosin Phosphate 2000kgs

And do OEM/ODM manufacturing of premix?