Chinese Traditional Medicine Prices Are "Soaring Like Rockets", Some Up 800pc

Chinese medicine prices are soaring thanks to inflation, coronavirus, some natural disasters and global government destruction of the economy and supply chains.

iFeng: 价格像火箭一样蹿升！有中药材一年上涨超过800% 发生了什么？

Multiple factors have caused the price of medicinal materials to rise

According to data from the Chinese herbal medicine information platform "Yaotong.com", since 2020, the Chinese herbal medicine market index has risen by more than 30%, compared with an increase of about 10% in the previous three years. Specific to various medicinal materials, the prices of more than 50 Chinese medicinal materials will double in 2021. Among them, white lentils have risen by more than 800%, and Rehmannia glutinosa and Ecliptaea have increased by more than 300%.

Why have the prices of Chinese medicinal materials soared since 2020? Zheng Zhiwen, a senior analyst of Yaotong.com, said in an interview with a reporter from "Daily Economic News" that the price of Chinese medicinal materials has risen mainly due to the following five reasons:

First of all, after the outbreak of the new crown epidemic in 2020, the prices of medicinal materials related to the epidemic began to rise, such as Radix Isatidis, honeysuckle, and Forsythia. According to the "Diagnosis and Treatment Plan for Pneumonia Caused by Novel Coronavirus Infection" (Trial Version 7) issued by relevant departments, Huoxiang Zhengqi Capsules (Pills, Water, Oral Liquid), Lianhua Qingwen Capsules (Particles), Jinhua Qinggan Granules, Shufeng Chinese patent medicines such as Jiedu Capsules (granules) are listed as recommended medicines during the medical observation period for the treatment of new coronary pneumonia by Chinese medicine.

Second, also affected by the epidemic, a large number of customs clearance ports have been closed, and cross-border logistics have been greatly impacted. Some imported medicinal materials cannot be transported to the country. The prices of imported medicinal materials such as white cardamom, horse money, and pepper have begun to rise.

Third, the prices of Chinese medicinal materials are cyclical. The overproduction of medicinal materials stimulated by high prices in the past few years led to the low prices of medicinal materials for many years before and after 2018. Continued low prices will lead to reductions in species, and prices will start to rise again after species reductions. The price of Chinese medicinal materials presents a periodicity of "three years of rising, three years of falling, and three years of neither rising nor falling".

Fourth, it is affected by frequent natural disasters and rising planting costs. In recent years, frequent natural disasters, such as low temperature, drought, floods, etc., have caused some medicinal materials to reduce production, which has caused prices to rise; at the same time, planting and harvesting costs have also risen in recent years, and corresponding medicinal materials prices will also rise.

Fifth, it is affected by the increased supervision of the quality of Chinese medicinal materials. In July 2020, the new version of "The Pharmacopoeia of the People's Republic of China" was promulgated and officially implemented on December 30 of the same year. With the promulgation and implementation of the new pharmacopoeia, qualified medicinal materials have become the first choice for drug users. Due to the problems of heavy metals, pesticide residues, sulfur, and ash, the prices of qualified medicinal materials have risen, the prices of unqualified medicinal materials have fallen, and the prices of medicinal materials of different qualities have also been opened. distance.

Shares of Tongrentang gapped up to a new all-time high on Tuesday, followed by a pullback today. Other TCM stocks are also popping.