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January 20, 2010
5-Hydroxytryptophan (5-HTP) — extracted from the seed of Griffonia simplicifolia grown in West Africa — has risen nearly 10 times in price within the past two years, causing U.S. product manufacturers to cut finished product production, according to Charlie Wang, vice president of JIAHERB, Inc., the U.S. branch of Shaanxi Jiahe Phytochem Co., Ltd., a GMP herbal extract manufacturer in China.
According to JIAHERB, a 5-HTP supplier, 20 metric tons of the naturally derived amino acid was sold in the U.S overall in 2009. 5-HTP has been shown in comprehensive studies to be safe for people who suffer from insomnia.
"Currently, the cost per kilo has jumped from approximately $200 for product from the 2007 harvest, to about $2,000 a kilo for the raw material from the 2009 harvest," said Wang, who also noted that China and India are home to the largest 5-HTP ingredient producers.
"The international ingredient shrinkage of 10-20 per cent during the 2009 harvest season is just one reason for higher costs," notes Wang. "Many manufacturers, distributors and brokers are stockpiling materials to gain a greater price margin and this also causes the amount per kilo to increase.
Wang says that "most manufacturers stop buying ingredients at $1000/kg, but others will continue to purchase product for as much as $1600/kg." Even with the price hikes Wang predicts that the product will to continue to sell and have a high margin this year.
Whether consumers will accept the high prices is another concern. "I have noticed over the past few months the price of the raw material increasing and I have recommended the company I consult for, Advance Physician Formulas, to increase the price of a 50 mg 60 count bottle from $11.95 to $14.95 per bottle and this may need to be further increased to $19.95 soon," says Ray Sahalien, MD, author of Mind Boosters, www.raysahalian.com.
If the cost doesn't come down, how much will consumers be willing to pay? "It depends, says Sahalien. "If they are familiar with this supplement and it has worked for them before in terms of treatment for insomnia, depression, appetite control, and anxiety reduction, they would be willing to continue purchasing it, since it is cheaper than selective serotonin reuptake inhibitor drugs (SSRI). However, potential new customers may be hesitant. Certainly more shoppers will visit different stores or search further online to find bargains. We will see how the price fluctuates over the next few months."
In response to the price hikes, some manufacturers are ordering early and doing a work-around by going directly to the ingredient manufacturer. "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," says Wang.
The harvest starts in early December and seeds are collected for sale in January. "This season buyers arrived earlier than ever (at the start of the harvest), he said. "The harvest is extremely good this year, but the seed price which was US$12/kg last year is at US$22/kg this year. Furthermore, we have noticed ingredients manufacturers have also gone beyond the traditional harvest areas of China and India, and as far as Africa and are scrambling to locate as much Griffornia seed (5-HTP) as possible."
During the cost crisis, Wang says manufacturers of 5-HTP retail products have to continue to keep their customers satisfied and keep a smaller amount of finished product on store shelves. As a result, JIAHERB is working with its finished product manufacturing customers to stabilize the margin and ingredient supply and ensure product will be available until the next harvest.
"We are working with our customers to stabilize the price for the coming year and beyond by contracting for their raw material needs now," says Wang. "JIAHERB has the capability to serve more than 50 per cent of the North American market's quality raw material needs. Our customers believe we will be up to this task."
For more on JIAHERB, Inc. and their NSF-GMP certified, ISO9001, ISO14000 and HACCP manufacturing facility plus in-house lab testing, and product extraction and purification processes email at [email protected], or go to www.JIAHERBinc.com.
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