Recently,an article on China's Vitamin C export has attracted much attention among food ingredient industry. The article "China to impose VC export quota in 2011?", released in Corn Products China News 1101by CCM, analyzes that China's Vitamin C export quota may affect the global market and price trend.
According to the article, such export quota was estimated to be carried out at the end of 2010 by National Development and Reform Commission (NDRC). However, it still has no evidence to come out at the end of January, 2011. "It may still staying in inner discussion stage" told by the article's author from CCM. In addition, the article has also analyzed the advantages of this measure: eliminating unqualifiedmanufacturers and enhancing Chinese VC pricing power. Compared with last year, the figures in this article showed that both domestic prices and export prices slumped to the lowest level in 2010.
Export quota is one of the regulated measures considering VC industry, and other measures are also included, such as: industry admittance, investment administration, etc. Such measures are expected to aim at helping to keep healthydevelopment of this industry.
However, it is not the first time to try to regulate this industry. According to CCM's survey, some policies and measures has been applied previously. The latest one related to VC industry was water treatment measures in pharmaceutical industry, which eliminated some manufacturers for environmental protection. Besides, since DSM and BASF shrank the VC production, more and more capacities concentrated in Chinese top 5 advanced VC manufacturers, such as Northeast Pharmaceutical Group, North China Pharmaceutical Group, etc. These top 5 suppliers accounted for most of the global market share. Under such circumstances, the price has boosted since 2008, which ultimately led to more investment in VC industry. Besides, one of the key reasons for industrial expansion is local governmental economy development policy, which allows more investments into VC industry. Therefore, administration supervision is included in the regulation measures.
In the past years, the regulations on corn product processing industry have been highlighted. Citric acid industry has been adjusted in August 2010, and VC is regarded as an over-capacity product. Therefore, it is quite probable for China to impose export quota on VC in 2011. "The government should enhance the supervision on the implementation of this measure, if not, the measure would lose its role."quoted form January issue, 2011 of Corn Products China News.
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