Uncertain Market Supply Created by Covid-19 is likely to surge Folic Acid (Vitamin B9) Prices in China

The rising cases of the Omicron variant of the coronavirus are driving an unprecedented wave of infection across the globe, resulting in mass absences of staff in multiple industries due to which several producers in China have suspended their operations in order to curb its spread. On Thursday, i.e., 20th January, China’s northeastern city of Dalian reported its first case of Omicron, becoming the second major Chinese port struck by the extremely contagious variant after Tianjin, the largest port in Northern China, neighboring Beijing, recorded China’s first covid case last week.

The sudden outbreak of Omicron to Dalian port has raised fears that a fresh spread of the covid variant coupled with China’s zero-tolerance coronavirus policy could exacerbate the already strained global supply chains. After Chinese manufacturers and suppliers witnessed a pressure-filled December last year, this new variant may not pose as much of a threat to supply chains as they would have a few months ago. However, a market expert has warned clients across the world that they could face the “mother of all supply-chain stumbles” this year, citing the growing epidemic across China. Several harsh macro factors of China’s lockdowns are expected to be felt within the country, but China has given no signs it will get rid of its COVID-zero policy, even as it threatens its own economy.

The uncertain market supply in China is resulting in a hike in the prices of several commodities across the country. As per ChemAnalyst, the prices of Vitamin B9 (Folic acid) are continuously increasing in the Chinese domestic market, as FOB Qingdao prices escalated from USD 52000/T to USD 52080/T from 14th January to 21st January. This price adjustment is also a result of the extraordinary upsurge of raw material, energy, sea freight, and logistics costs, as well as general inflation in the country.

Chinese suppliers have already started preparing for a seasonal slowdown as the country enters the Lunar New Year holiday and winter Olympics. Beijing’s authorities have introduced several measures to contain the covid’s spread, as China’s capital reported several cases of the virus less than two weeks before it hosts the Olympic Games. According to Chinese authorities, Beijing’s first case of the Omicron variant could have arrived via a package from Canada.