Investigation and Analysis of Falling Price of Chinese Medicinal Materials in the Fourth Quarter of 2011

Investigation and Analysis of Falling Price of Chinese Medicinal Materials in the Fourth Quarter of 2011

In recent days, the prices of Chinese herbal medicines, which have been rising all the way, have ushered in an adjustment period after skyrocketing. The data shows that after July, the market's trend suddenly reversed, and the price continued to fall rapidly. In mid-September, it fell back to the same level as the price at the beginning of the year. Up to now, some Chinese herbal medicines have fallen by nearly 30%.

Chinese herbal medicines that are squeezed to hype moisture

September was a traditional peak season and the business was sluggish. Relevant industry agents stated that they would like to improve after entering the fourth quarter and there is still no sign of recovery. This makes them very depressed.

As of the beginning of October, nearly 80% of Chinese herbal medicine prices have fallen. The prices of Chinese herbal medicines such as licorice and rhizoma chuanxiong all dived, dropping by one to three percent. Related industry sources said that since the third quarter, Chinese herbal medicine prices have continued to decline. Even the price of Codonopsis, which was strong all the way before, fell sharply in October, falling by more than 20% compared to the historical high of more than 100 yuan per kilogram.

Recently, the prices of Chinese herbal medicines such as licorice root, Codonopsis pilosula, honeysuckle, and bergamot all soared by more than 30%. In the past two years from October 2009 to the present, 90% of the Chinese herbal medicines have risen more than 70%, but the prices of Chinese medicines have recently been lowered as a whole. Among them, the price of Codonopsis has dropped by 3 to 40% since the end of September, and the current price is maintained at 20 to 25 yuan per kilogram; the honeysuckle has dropped from 200 yuan and 1 kilogram at the highest level to more than 100 yuan now, a drop of nearly 50%.

The subtle relationship between soaring prices and falling prices

Since the beginning of last year, there have been four rounds of rising tides in Chinese herbal medicine prices. According to statistics, in 2010 there were more than 85% of the varieties of Chinese herbal medicine prices rose. Industry analysts believe that before the price rise, many manufacturing companies took part in bulk purchases in order to avoid risks. While pushing up market prices, they also encouraged Chinese herbal medicine farmers to increase their planting capacity. In the face of the newly harvested Chinese herbal medicines, the market supply exceeds demand, which has contributed to the general decline in prices today.

Of course, the price diving of Chinese herbal medicines has been directly related to the regulation of Chinese herbal medicines by the National Development and Reform Commission in the past two months. In addition to government regulation, another important reason for this round of price cuts for Chinese herbal medicines is that Chinese herbal medicines newly harvested from late to mid-November will begin to be listed on the market.

In the fourth quarter, Chinese herbal medicines still have room to fall

Under the background that the price of Chinese herbal medicines has fallen by nearly 30%, the wait-and-see mood of the Chinese herbal medicine market has become increasingly strong. Now that the purchasing company has temporarily stopped purchasing, the industry is in a downturn and business is difficult to do. Since the beginning of October, the purchase volume of enterprises has fallen sharply, and large varieties such as Campanulaceae and Banlangen have fallen to the cost zone. Based on the current situation, the prices of Chinese herbal medicines in the fourth quarter will have room for further decline. However, due to the stability of demand for Chinese herbal medicines and the increase in production costs, the decline will not be too great.

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