In recent times, the price of the Chinese medicinal herb Baizhu has skyrocketed, with some distributors claiming that the prices are too high for them to purchase. Compared to three years ago, the price of Baizhu has increased by tenfold. This news has become a hot topic on Baidu on April 22.
According to data from the Chinese Medicine Market website, Tian Di Wang, the price of Baizhu in the Anguo Medicine Market in Hebei Province has seen a significant increase since January 2023, rising from 27 yuan per kilogram to 90 yuan per kilogram by September. From October to December, there was a slight decrease in prices. However, starting in 2024, the price of Baizhu has continued to rise, reaching 180 yuan per kilogram on April 20, doubling compared to the price peak in 2023.
The price trend in the Bozhou Medicine Market in Anhui Province is similar to that in the Anguo market, with the price on the 17th reaching 180 yuan per kilogram, nearly three times the price of 58 yuan per kilogram at the beginning of 2024.
As Baizhu is a commonly used bulk Chinese medicinal herb, the increase in wholesale prices has led to corresponding increases in prices at clinics and pharmacies downstream, directly impacting consumers.
A clinic operator in Huaihua, Hunan Province, using the pseudonym Ayu, revealed to China News Economic Observer that the current price of Baizhu has reached 175 to 210 yuan per kilogram. Currently, the clinic only purchases Baizhu when requested by clients.
Li Hao, operating an online store for Chinese herbal medicine in Hebei Province, stated that the price of Baizhu has increased tenfold compared to three years ago. He mentioned, “The price of Baizhu has increased too much, and now I’m afraid to stock up.”
Due to Baizhu’s various medicinal functions such as tonifying the spleen and stomach, promoting diuresis, and stopping sweating and securing the fetus, its usage is substantial in traditional Chinese medicine, with annual sales exceeding tens of thousands of tons. The demand for Baizhu in herbal decoctions has increased from over 9,200 tons in 2019 to over 14,600 tons in 2023.
The sharp rise in Baizhu prices is believed by industry insiders to be mainly due to reduced production. An analysis by the Chinese Medicine and Medicine Network in March 2024 pointed out that Baizhu experienced production declines due to disasters for four years from 2018 to 2023, with only a bountiful harvest in 2019. Many Baizhu operators did not make profits from 2018 to 2022, with some even incurring losses, leading to a decrease in cultivation area from 2020 to 2023. In 2023, after the actual digestion of the supply, operators found a scarcity of supply in the market, leading to price increases.
Additionally, the entry of considerable funds into the market for speculation due to the profit potential has also driven the rise in Baizhu prices.
Looking ahead to the future trends of Baizhu prices, Zhongkang Yunling, in an analysis article released in February of this year, predicted that Baizhu prices would continue to operate at high levels in 2024. Some industry insiders even believe that the Baizhu price will further accelerate, expecting a market price of 300 yuan per kilogram.
The surge in Baizhu prices has already affected downstream prices of traditional Chinese medicine products. On the evening of March 11, the Foci Pharmaceutical Company announced a 9% average price increase for its main traditional Chinese medicine products due to rising raw material and production costs.
In fact, it’s not just Baizhu; the prices of other medicinal herbs are also on the rise.
Jia Haibin, General Manager and Chief Analyst of the Zhongkang Yunling Chinese Medicine Industry Big Data Center, stated that the Chinese medicinal herb market started to rebound after the Chinese New Year in 2024, with the market conditions in 2023 already high and rising by approximately 6.98% compared to the same period, with Baizhu being the focal point of price hikes.
Many netizens attribute the surge in Baizhu prices to capital speculation.
Netizen “Smelling the fragrance of hometown soil” said: “Capital has entered agricultural and sideline products! They are hoarding goods! Creating price miracles! Such as ginger! Garlic! Some even want to establish marketing platforms online to control prices!”
“123456789876543219Ha” also commented: “Capital speculation should be strictly investigated for entering the herbal medicine industry.”
“Kouliang looks at the world” believes: “Capital speculation without regulation has put producers, operators, pharmacies, and consumers all at a disadvantage!”
However, some netizens believe that the problem lies in the circulation of the Chinese market.
Netizen “Capricornjerryss” stated: “This is the result of not allowing farmers to sell directly. When farmers wanted to sell the Cicada shells they received to pharmacies, they were told they couldn’t and needed to sell to Chinese herbal medicine companies. I remember that pharmacies offered 800 yuan per jin (500 grams) at the time, while farmers sold it for about 130 yuan per jin (500 grams).”