The three major problems in the industry with the general price rise of Chinese herbal medicines are coming!

Under the general rise of medicinal materials, it may trigger three major situations in the industry

01 The first situation: "The new increase in production" may trigger a blind expansion of medicine farmers

2021 is an extremely unstable year for the Chinese medicine industry.

Many kinds of medicinal materials, such as Forsythia, Habitat, Eclipta prostrata, Ligusticum chuanxiong, Alisma orientale, etc.

Especially in this wave of "price increases" for Chinese medicinal materials, an extremely obvious feature has emerged in the industry, namely: new rises in production

Some commonly used bulk medicinal materials will not increase their prices until they are new.

Why does this happen?

Experts in the industry analyze that this is because the current society is already in the information age.

Due to the concentration of purchase orders, the prices of those medicinal materials that are being produced or that have already been produced will rise to a certain extent

In particular, some Chinese medicinal materials whose production has been reduced or the demand has increased.

The rise in the prices of some medicinal material varieties will inevitably trigger a market linkage effect.

Ordinarily, the price increase of Chinese medicinal materials during the new production period is definitely a great good thing for the planting end of the production area.

However, everything in the world often has its two sides.

Because the majority of pharmaceutical farmers, including those agricultural cooperatives and certain medicinal material planting base companies, it is often difficult for them to get rid of the idea of ​​"following the trend and catching up", that is, if the price of a certain variety is raised this year, it is difficult to make money the next year.

And examples like this, at the forefront of our cultivation of Chinese medicinal materials, seem to be staged every year, and there are too many

Therefore, in this regard, a number of industry experts have recently reminded them that when planting Chinese medicinal materials, I hope that farmers should not just focus on pulling carts and always look up at the road.

Some medicinal materials appear on the market in a short period of time.

Therefore, when it comes to planting medicinal materials, I hope that my friends from pharmaceutical farmers will not always keep their eyes on those price-increasing varieties.

Of course, in terms of how to help the vast number of pharmaceutical farmers to plant medicinal materials to avoid risks, it is even more inseparable from the guidance and support of the government, industry-related associations, and information experts.

02 The second situation: The prevailing trend of suppressing goods will lead to the intensification of the market’s “28th law”

The "Twenty-eight Law" was discovered by the Italian economist Valedo at the end of the 19th century and the beginning of the 20th century, so it is also called Valedo's law
.
The "Twenty-eight Law" has always been a common phenomenon in society, so this phenomenon also exists in the Chinese medicine industry
.

For many years, after every Chinese medicinal material market has a "general rise" or a certain variety has a "surge" in the price, there are not many people who can really profit from it, and about 20% is not bad
.

For 80% of the participants, some would lose money, and some would be able to retreat without fail
.

First of all, let’s analyze the reasons for the “universal rise” in the market of Chinese medicinal materials.
The current “universal rise” in the prices of Chinese medicinal materials is due to the new crown epidemic, droughts and floods in individual areas, and the printing and release of money from many countries around the world.
, Resulting in a wave of prices triggered by a series of conditions such as imported price inflation
.

However, the above is just a representation of things, and the current actual situation in the Chinese medicinal material industry is that although many varieties have increased in price, the reason for the increase in prices is mostly not caused by the contradiction between supply and demand
.

Except for a few Chinese medicinal materials, which were partly reduced by the increase in sales of the new crown epidemic or due to droughts and floods, most of the varieties have not seen a significant increase in terminal demand, and the volume of goods is still in a situation of oversupply
.

According to the big data analysis of the pharmaceutical industry in Tiandi Yuntu, at present, on the market demand side, the clinical channel of Chinese patent medicine, the OTC channel of Chinese patent medicine, and the channel of Chinese medicine decoction pieces are still the three major channels of demand for Chinese medicine raw materials, but the proportion has fallen to 65.
28% compared with previous years.

.

From September 2020 to September 2021, the original e-commerce channel that performed well, due to the unimpeded offline channels and insufficient consumption power, the overall sales volume of traditional Chinese medicine products in the main e-commerce channel increased by 3.
06%, the lowest level in the past five years
.
Among them, the first three quarters of 2021 only increased by 0.
45%
.

As mentioned earlier, after the market for Chinese medicinal materials has seen a general rise this time, what will happen next? It must be the planting fever at the source of the production area
.

Under the circumstances of currency inflation and unabated planting costs, the market for P.
ginseng at 35 yuan per kilogram may lack enthusiasm for planting, but now the price has risen to 70 yuan per kilogram, will growers remain indifferent?

The price of safflower is 90 yuan per kilogram, and the pharmaceutical farmers may be willing to give up planting.
If the price reaches 180 yuan per kilogram, the pharmaceutical farmers are willing to plant it or not?

Atractylodes macrocephala with an income of 3,000 yuan per acre may not be interesting for medicinal farmers.
If the market price increases and the income per mu can reach more than 6,000 yuan, the medicinal farmers will naturally be impressed
.

As a result, many pharmaceutical farmers, agricultural cooperatives and even GAP planting bases, under the impact of the high price of medicinal materials, in the planting of certain varieties, it is inevitable that there will be blind expansion and production expansion, and rapid development.
Excessive" momentum or situation
.

So, in the use of terminal demand is not prosperous, but the source of the production end is a growing boom in planting, and the supply of goods will continue to emerge in the future, and the market prices of many Chinese medicinal materials will always be as they are now.
"Go down? Obviously it is impossible
.

Judging from the actual situation of the industry, as mentioned earlier, although many Chinese medicinal materials have risen in price, they have not really entered the actual digestion channel.
They are still scattered in the hands of some operators and sellers in the production area and the market.
To be circulated or stored
.

Look at the large, medium and small cold storages in the current producing areas of Chinese medicinal materials or specialized markets
.

For rhizome varieties, when they are stored in early 2020, the price of cold storage (one year) is only 0.
35 yuan per ton, but the current storage cost has risen to 0.
70 yuan
.

Why? This is because the storage of medicinal materials in cold storages of various sizes and sizes in those origins and markets is unprecedentedly full of "piling up".
If you want to store medicinal materials, you must queue and equalize.
Only when other people's medicinal materials are put forward from the cold storage, your goods can be ordered in order.
Put it in
.

So, will such a large amount of goods always lie still in the cold storage forever? Obviously it won't, and it will eventually be proposed to dump the market
.

Many varieties of Chinese medicinal materials are stimulated by high prices, growing enthusiasm for planting in production areas is high, market stocks are huge, and terminal demand is in a bottleneck period.
Under such contradictions and conflicts, the next situation is a lot of Chinese medicinal materials.
Variety prices will gradually fall or fall precipitously in the next two or three years, and the current situation has begun to show up.
For example, during the outbreak of the new crown early last year, the price of honeysuckle was hotly speculated to 270 yuan kg.
, Isn’t the price now reduced to 140 yuan kg?

So, there is no need to doubt that after the "general rise" of the Chinese medicinal material market, that is, when the "28th law" we mentioned earlier appears, that is, 20% of the Chinese medicinal material market will be involved in the initial stage of the "general rise".
At the current high price, the crowd will choose to sell at the right time and exit safely with profit
.

The other 80% of the population, some of whom intervene in the mid-to-high price range, if they can quickly and wisely choose to "reluctantly run away" when they find that the market is not good, they may be able to make a "capital-guaranteed exit" without risk.
Not bad
.

As for the remaining part of the population, if they are high-priced interveners in the late stage of the "price increase" of Chinese medicinal materials, and lack the courage to "break the arm of the strong man" before the price of Chinese medicinal materials falls in the future, they will only Can be the victim of this price increase
.
Otherwise, where does the profit of the 20% of the population come from?

So, as the article is written here, the author hereby not only reminds the big brothers who are at the forefront of Chinese medicinal material planting, that medicinal materials should not blindly follow the trend when planting medicinal materials.
At the same time, the author also advises those in the market that "saving money is not as good as stocking," Distributors or sellers of traditional Chinese medicinal materials with the concept of "you can make money by buying" must always grasp the opportunity to recognize that the situation is better than anything else
.

After all, no matter how strong the wind is, it is impossible to keep blowing forever.
No matter how great an unprecedented feast is, there will always be the end of the song.
The result of too late is often a disastrous defeat, and it will eventually be difficult to escape the 80% of the "two-eight law".
A member of the crowd
.

03 The third situation: After the "general rise", the quality of medicinal materials, corporate buyers will inevitably be "unpredictable"

The overall "universal rise" in the prices of Chinese medicinal materials is a surprise for the farmers in the origin or those market merchants who have the goods in their hands, but it undoubtedly adds pressure to the manufacturers of Chinese medicinal pieces or Chinese patent medicines
.

This pressure does not only come from the increase in production costs, but also from the hidden concerns about the quality of the source of raw materials
.

In the stage before 2020, why are the prices of many medicinal materials sluggish? One of the reasons is that the source of planting is too large, and there is a situation of oversupply in the market
.
The second reason is that the new pharmacopoeia has added some inspection items.
In order to cope with the uncertainty in the future, the manufacturers at that time were trying to reduce their inventory as much as possible.
Under the double squeeze, the prices of Chinese medicinal materials were generally reduced
.

The phenomenon of "general rise" in the prices of Chinese medicinal materials caused by various reasons this time has changed this situation
.

Those Chinese medicinal materials that were rejected by manufacturers because of pesticide residues, heavy metals, and unqualified content of ingredients also participated in the carnival in this "general price rise" trend
.
No one of all kinds of people rushing to the production area and the market to buy medicinal materials would go to the testing room with their beard and eyebrows black and red
.

This situation will give some pharmaceutical farmers the illusion of quality perception.
Since pesticide residues, ingredient content, ash content and other medicinal materials that exceed the standards and are not exceeded, they are all rushed to buy.
Then, in order to increase production and income, pharmaceutical farmers are planting.
There will be an indifference to the quality of medicinal materials, pesticides will still be sprayed, and hormones will still be applied
.

Turnips are fast and do not wash the mud.
As long as the market price is high, you don’t have to worry about selling them
.

This situation is also true for the medicinal material dealers, market operators, and cargo sellers in the production area.
After being dazzled by profits, is the content of medicinal materials, pesticide residues, and heavy metals enough, or not? Others are rushing to buy with you, so what are you doing? Can you make money?

This situation and thinking is a headache for production companies
.
Many medicinal materials purchased in different batches, because they belong to the same variety, are mixed and sold together by medicinal material dealers or marketers of origin.
The inspection of the company's purchase is only random sampling, and it is inevitable that one will lose sight of the other.
This often leads to: Qualified, but due to the "inhomogeneity" in the source of the medicinal materials, the product was unqualified during random inspections by the regulatory authorities
.

Of course, from the perspective of industry development trends, in order to ensure product quality and the traceability of the industrial chain, many current Chinese medicine manufacturers have not only established their own medicinal planting bases, but also have cooperated with agricultural cooperatives and Chinese medicinal GAP planting companies at the source of production.
Industry alliances and others have established a "vertical procurement" cooperative relationship
.

However, as far as the current industry is concerned, after all, these relatively standardized supply-side supply capabilities are still very weak, and nearly 70% of the source of raw materials in the market still depends on the vast number of retail pharmaceutical farmers
.

Some agricultural cooperatives and planting bases themselves produce medicinal materials that cannot fulfill the orders of downstream cooperative units, so they will naturally go to the local bazaar or go to the professional market to purchase to meet the demand
.

Many medicinal material dealers, market franchisees, and press vendors in many producing areas will sell the medicinal materials under the name of agricultural cooperatives and planting bases, or drag them to the place of production when their own sales capacity is insufficient.
The shipment of the medicinal materials market is realized
.

In other words, from the perspective of appearance, in many cases, although pharmaceutical companies purchase raw materials from the source of production, in fact, most of the medicinal materials are still sold by market operators or sellers, but the supplier changes It's just a name
.

As a result, it indicates that after the price of Chinese medicinal materials has been "generalized", in terms of the quality of raw material sources, manufacturers will inevitably face some "unpredictable" pressures in the future for a certain period of time
.

Of course, as the saying goes, nothing happens in the world, there are two sides to it
.
Looking at the problem from the positive side, it is precisely because of the situation and contradictions of one kind or another in the Chinese medicine industry that it has always received widespread attention from relevant government departments, industry associations and industry experts
.

GAP standardized planting of Chinese medicinal materials, the promotion of artificial cultivation techniques for anthropogenic natural nutrition, the establishment of the traceability system of the industrial chain, the implementation of the initial processing policy of the production area, the gradual formation of the vertical structure adjustment of the docking of production and demand, and other related policies or reform plans are also in progress.
It was produced or introduced under many of the above conditions
.

In short, with the promulgation and implementation of a series of relevant favorable policies by the government in recent years and recently, the pace of reform of the Chinese medicine industry will continue to accelerate in the future, and the trend of further development will become more obvious and unstoppable
.