veterinary raw material Industry Views

Industry Views

In 2023, the veterinary raw material price index (VPi) fell by nearly 20%. At the end of 2023, VPi closed at 64.00 points, down 19.82% from the end of 2022. Among the 11 mainstream veterinary raw materials, 9 varieties saw price declines to varying degrees, such as florfenicol fell by more than 50%, doxycycline hydrochloride, fumarole, tylosin tartrate and other varieties fell by more than 20%. We believe that the main reason for the sharp decline in veterinary raw material prices is that on the demand side: pig prices are at a historically low level, downstream breeding industries continue to lose money, and the demand for veterinary chemical drugs is mainly rigid demand, and the demand for veterinary raw materials has decreased. On the supply side: ① The production capacity of large and medium-sized veterinary raw material companies continues to expand, and the supply is relatively surplus; ② The production process continues to be optimized, and there is room for profit decline in veterinary raw material manufacturers; ③ The current industry competition pattern is relatively fragmented, and some companies promote industry clearance by maintaining low prices.

From January to February 2024, the veterinary drug raw material price index (VPi) continued its downward trend, but the decline was relatively mild. At the end of February, VPi fell by 2.16% compared with the end of 2023, and the downward trend was relatively mild. The prices of florfenicol and dysentery net, which had previously fallen sharply, remained basically stable, with a decline of less than 1%.

The elimination of backward production capacity and the introduction of new production capacity are carried out simultaneously. In recent years, with the implementation of the new version of veterinary GMP, some small-scale and technologically backward production enterprises have been under great cost pressure, and the continuous decline in prices has accelerated the elimination of backward production capacity. At the same time, the current competitive landscape of the veterinary drug raw material market is relatively fragmented. Enterprises need to reduce costs, strengthen competitive advantages, maintain or increase market share through technological reforms and expansion of production scale. In 2023, many companies will complete the commissioning of new production capacity and continue to expand new production capacity.