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Friday, 19 Apr 2019

19.11.2010 NEWS: Chinese medicine prices go sky high

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Some 84 percent of the nearly 600 Chinese traditional medicines in the market have seen price spike as high as 700 percent over the past year, according to the China Association of Traditional Chinese Medicine.

Industry watchers blame speculation, bad weather and strong market demand for the soaring prices.

“With the government still curbing the real estate sector and the stock market’s performance mixed, hot money is now turning up in other sectors like gold and traditional Chinese medicines,” said Guo Fanli, a medical industry analyst with CIC Industry Research Center.

As a niche market, the output volume of many traditional medicines is limited, making the sector an easy target for investors to monopolize on one item, which may serve to push prices up fur-ther, said Guo.

Two traditional medicines undergoing astronomical price include pseudostellaria root, commonly known as prince ginseng, and cordyceps sinensis, colloquially known as caterpillar fungus.

Prince ginseng is often used for spleen-related illnesses or to rehydrate the body, while caterpillar fungus is used for ailments ranging from fatigue to cancer.

Prince ginseng prices jumped from 119 yuan ($17.90) per kilogram at the end of 2009 to 905 yuan (136.17) today, a 660 percent increase in less than one year.

And top-grade caterpillar fungus has seen a 20 percent increase in just the last month, selling for as high as 200,000 yuan ($30,109.20) per kilo.

However, some analysts said a supply-side shortage is the root of the problem, while other blame bad weather and soaring growing consumer demand for alternative medicines and healthcare products.

“As Chinese get richer and richer, they are growing increasingly more aware of their health,” Guo said.

The health product market in China was worth about 91 billion yuan ($13.69 billion) last year, ranking it behind the US and Japan.

In the first three quarters of this year, exports of traditional Chinese medicines topped $1.35 billion, up 20.5 percent year on year, according to data from the Chi-na Association of Traditional Chinese Medicine.-  Global Times