Market Update (November 2012)
Although climatic problems, in both Asia and Africa, reduced Artemisia production in 2011, supplies of artemisinin were adequate to meet ACT needs for 2011/12 and resupply some buffer stocks with API/ACT manufacturers. However, due to market speculation and other factors, the quoted price of artemisinin from China escalated in the 3rd quarter of 2011, from an average of $600/kg to over $900/kg, although there were reportedly few buyers at this price. Although the ACT forecasts for 2012/13 were still not clear, a number of companies ‘speculated’ on these higher prices, particularly in China, and planted large areas of Artemisia at the beginning of 2012. Good climatic conditions, particularly in China, have therefore resulted in a ‘bumper’ Artemisia crop in 2012, which if fully processed, could result in a global yield of between 230 – 260MT.
China planted large areas of Artemisia at the beginning of 2012 and the climate was good during the growing season. From discussions with extractors, this will result in between 180 – 200MT of artemisinin being produced and being available for 2013.
Production costs in China have increased considerably over the past 12 months, in line with other commodities, whereas sales prices have been regularly declining since last summer as a result of heavy competition and weak demand. Although Chinese producers are trying to maintain prices in the 420 - 450 $/kg range, some think negotiation for deliveries in the first semester 2013 could be below the production cost and fall into the 380 - 420 $/kg range.
Due to rising costs, production of artemisinin in Vietnam has remained static over the past few years e.g. between 20-25MT per year. For the same reason as in China, i.e. perceived high artemisinin prices at the end of 2011, Artemisia plantings increased slightly, but cold weather, effected crop quality, resulting in lower than expected yields.
East Africa and Madagascar
Together these regions are expected to produce around 35-40MT artemisinin to be available in 2013
Sanofi has reported that it is working to produce 10MT of the semi-synthetic product by the end of 2012 and will be ready to produce around 40MT in 2013 (although not all of this will be available for usage in 2013).
Artemisinin demand, as reported by the UNITAID supported and BCG managed ACT Forecasting Consortium is between 101 and 119MT for 2013, depending on the different scenarios which are being considered for the future of AMFm. For more details see ACT Forecasting Update Q2-2012.
The Consortium’s figures do not however cover all global artemisinin requirements, such as demand for non-qualified products and mono-therapies; additional in-country requirements; and the rebuilding of inventories. A2S2 estimates this additional demand to total around 60MT if the best case scenario applies for AMFm or around 80MT, in the worst case scenario. This gives a total global artemisinin demand of around 180MT. This will of course also depend on the prices being viable for both the buyers and the extractors i.e. not too high, nor below production cost.
As stated above, the Board of GFATM has indicated that the future of AMFm will not be decided until their Board Meeting in mid-November 2012. Different scenarios are under evaluation, but at this time it is difficult to say what will be the outcome. Most probably, an interim period will be decided upon before introducing changes in the mechanism of drug approvals and distribution.
According to our latest information, Sanofi is in contact with WHO concerning assessment and pre-qualification of their semi-synthetic artemisinin and artemisinin-derivative APIs, obtained from the semi-synthetic source. Semi-synthetic artemisinin is already available for experimental transformation into artemisinin-derivatives APIs. Sanofi has reported that it is working to produce 10MT of the semi-synthetic product by the end of 2012 and will be ready to produce around 40MT in 2013. No firm prices have yet been announced.
Max-Plank Institute has informed A2S2 that they are making good progress with their semi-synthetic artemisinin programme and will soon be releasing further information on both progress and potential partners.
High Yielding Artemisinin Seeds
A number of national and individual grower selection programmes have slightly increased the Artemisia percentage in the leaves and the dry weight yield of leaves per hectare. However, over the past five or so years there has been little consistency in these increases and global yields have altered little over the same period. Promisingly though, high-yielding seeds from the following donor funded programmes are now available on the market and are showing consistent improvements in yields:
Mediplant, Switzerland has been developing Artemisia varieties for almost 20 years, and their hybrids are widely grown, particularly in East Africa and Madagascar. Through their development programme, and in collaboration with CNAP (see below), they now have available high-yielding Artemisia varieties. For more information, contact: firstname.lastname@example.org
CNAP’s (Centre for Natural Products) fast track breeding programme (funded through the Bill & Melinda Gates Foundation) most promising new hybrid varieties have been extensively tested for their yield, robustness and resistance to pests and diseases at field trial sites in China, East Africa, Madagascar and India. The trials enabled CNAP to assess their hybrids under a range of climatic conditions and find those which are most capable of performing well in the main regions of commercial cultivation. Results from the trials were used to select the final hybrids for commercialisation by East-West Seeds. The project’s field trials are now complete and Artemisia growers who are interested in trialling new hybrid varieties for themselves should contact: email@example.com
NIAB (National Institute of Agricultural Botany), UK, through a programme initially supported through the British Government, has developed their own high-yielding Artemisia varieties which have been extensively trialled and commercially grown in Asia, East Africa and Madagascar over the past two years. Growers interested in more information and obtaining seeds should contact Colin Hill: firstname.lastname@example.org / email@example.com