Prices of Chinese medicine in Yunnan province have increased over 10-fold after four years of persistent drought

March 25, 2013 Leave a comment

High heat and speculation set Chinese medicine prices ablaze

Staff Reporter  2013-03-24

Prices of Chinese medicine in Yunnan province have increased over 10-fold after four years of persistent drought, which has severely limited the scale of Chinese herb and tea production. Increasing demand for the disappearing herbs has only added upward pressure.

Low rainfall, high temperatures and strong wind in the spring have affected the production output of multiple tea-producing cities, especially Pu’er and Dali. Prices of green tea, pu’er tea and dianhong black tea have surged by 10%, 20% and 30% respectively since last spring, according to Chinese-language Henan Economic News.

The droughts have also driven up the prices of Chinese medicines such as dong quai, pseudo ginseng and other plants that belong to the genus panax. Dong quai fetched a market price of 34 yuan (US$5.4) a kg in Aug. 2012 but now goes for 90 yuan (US$14). The pseudo ginseng also doubled from 300-400 yuan (US$48-64) a kg in 2012 to 700-800 yuan (US$112-128) this year. Other panax plants have increased by 40% to around 400 yuan (US$64) a kg.

Chinese medicine businesses said speculators in recent years have caused herb prices to fluctuate and are using some medicines as their investments tools. Some Chinese medicines practitioners said the value of a prescription has gone up from a dozen yuan a few years ago to up to 400-500 yuan (US$64-80) now.

The problem is especially acute in Chinese medicine because of its emphasis on the consistent intake of herbs to maintain health and prevent sickness. People who have been taking medicine for years have been forced to stop buying herbs or reduce their usage. In some cases, the medicine has exceeded 200 yuan (US$32), higher than that of prescription western drugs.

Producers of the medicines are concerned that speculation will damage their business since rising prices will reduce the number of buyers. “We hope that prices will be more reasonable and the influence of speculators on the Chinese medicines market can be reduced,” one spokesperson said.

Filed under Macro Trends

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