Inflection point of Chinese herbal medicine prices

The madness of 85% of Chinese herbal medicines rising in price has ceased. Entering January 2011, except for a small number of nourishing Chinese herbal medicines, the prices of Chinese herbal medicines have generally declined. At the same time, many pharmaceutical companies have actively changed their minds and opened up their own cultivation bases for traditional Chinese medicine, trying to change the situation in which raw materials were controlled by people.

In previous years, Chinese herbal medicines in winter were subject to price increases. This year, there has been no rise or fall. The latest quotation from the Chinese herbal medicine company Tiandi.com showed that on January 5th, wholesale prices of Chinese herbal medicines such as Panax notoginseng, Banlangen, Sterculia lychnophora and Astragalus membranaceus had begun to decline. Take Sanqi as an example. In December last year, the price was still 365-375 yuan/kg, which is currently slightly reduced to 355-365 yuan/kg. Looking at the mountains again, according to the relevant information from the Chinese Medicine Information Center of the Chinese Traditional Medicine Association, dealers in many cities are currently actively dumping goods, and the market for Shanshan maintains a trend of callbacks. The current market price is 50-55 yuan/kg, which has been adjusted back from a high of 65 yuan. Although in view of the magnitude, the price cuts are not yet significant, the signs of an overall price increase since last year have been curbed.

A brokerage researcher Mr. Yu told reporters that under the background of the state's regulation of agricultural product prices, hot money did not dare to fry as it had done in the past, leading to some Chinese herbal medicines that had previously risen too high.

In addition, under the prevailing trend of increasing prices, the market demand has been suppressed. In some regions, the Chinese herbal medicine distributors have stopped purchasing, which also led to the decline of Chinese herbal medicine prices from highs. The analysis of relevant persons in the information center of Chinese herbal medicines.

For the industry's most curious Chinese herbal medicine prices in 2011, Yu Zhibin, the Chinese medicine division of the Chinese Medical Insurance Association, said that there are many variables and it is difficult to predict. “The prices of some nourishing Chinese herbal medicines, such as ginseng, have a certain room for growth in the context of strong winter health demand.” He believes that the prices of Chinese herbal medicines will basically drop steadily in 2011, skyrocketing. The situation will not continue.

Chinese medicine companies that are subject to "crazy" prices of Chinese herbal medicines are actively seeking changes. Mr. Jing Shanci, the strategic director of Shenwei Pharmaceuticals listed in Hong Kong, told the Shanghai Securities News that in 2010, the rising price of raw materials brought certain pressure on the company's costs. For this reason, Shenwei has begun to take a series of measures to change the predicament. First, Shenwei will build its own planting base in 2011 so that it can control prices, ensure stable supply, and solve the problem of sustainable development of enterprises. Second, for medicines that have not yet been planted, the company dispatches personnel to the production base for direct procurement. To a more favorable price; Finally, when the price is low, take stockpile measures in case of emergency.

At present, Kangyuan Pharmaceutical has begun to grow honeysuckle. According to relevant persons from the company’s investor relations department, “The company’s total planting target will reach 1,000 acres, and the planting area in 2011 is expected to reach 6,000 acres.” According to him, it is not the company that goes to grow honeysuckle on its own, but to the neighboring farmers. Signing the agreement, the company provided seedlings and planting standards, and the farmers planted as required. Although the current investment is large, in the long run, it can dilute the cost and ensure the supply of raw materials.

From reluctantly trying to become the consensus of the industry, more and more powerful companies have joined the army of Chinese herbal medicines. Recently, Li Chuyuan, chairman of GP Group, said in public that Guangyao Pharmaceutical Group has reached 20 medicine bases both at home and abroad, and has become the country's largest pharmaceutical group with the largest base of Chinese herbal medicines. At the end of the “Twelfth Five-Year Plan”, Guangpharm Group will build 30 new GAP bases for the cultivation of Chinese herbal medicines, eventually forming a base for 50 herbal medicine bases.

The struggle for resources such as the cultivation base of Chinese medicine will also become increasingly heated. "The ability to seize resources in the future also indicates who will have a higher market share." Shen Wei Pharmaceutical Jing Shanci thinks this way. “The government has always been encouraging the company to grow its own bases for Chinese medicine.” The relevant person of the Kangyuan Pharmaceutical Investor Relations Department told reporters that “the government gives certain supportive policies, such as giving preferential policies in bidding and pricing. This to some extent also increases the enthusiasm of companies to plant their own."