The German chemicals giant said today that it is increasing the cost of the chemical, a colourless carboxylic acid with a pungent odour in its liquid form, by €50 per metric tonne in both Europe and Asia.
As well as playing an important role in vitamin E production, propionic acid is used as a preservative in food and feed due to its inhibition of mould and bacteria growth. The esters are also sometimes used as a flavouring.
A spokesperson for BASF told NutraIngredients.com that the increases were "down to the normal reasons: increases in raw material prices and a decline in the margins necessary to be profitable in the business".
The raw materials used in propionic acid production are ethylene and carbon monoxide. BASF produces propionic acid at its facilities in Germany and China, which have a combined capacity of 110,000 tonnes.
He agreed that today's news could have a knock-on effect on world vitamin E prices, but this will, of course, be down to the individual producers. It is not clear how it may affect BASF's own vitamin E production.
According to a report published by Frost and Sullivan last year, the Western European vitamin E market saw revenues of around $100m in 2004. It predicts that the market will grow be around $145m by 2011.
However European vitamin producers are feeling the squeeze of price pressure from China, forcing them to adopt cost reduction strategies throughout the supply chain.
BASF is a case in point, having called time on its vitamin C production in Europe at the end of last year.
The rising price of a component in vitamin E production could, therefore, present the market with more problems that it must overcome in order to remain competitive.