The market is "hot in the south and cold in the north", and the industry is expected to become cautious
Since the festival, the collection of medicinal materials in Bozhou Nineteen Miles Town has become more and more lively every time.
Every lunar double day, before dawn in the morning, the surrounding medicine farmers and pharmacists will pull a car after car of real estate Chinese medicinal materials to gather in Nineteen Mile Town, stretching from Mulan Avenue to the east for nearly three miles, the road is full of dense medicinal material stalls on both sides, usually the two cars parallel to the road crowds of people, shoulder to shoulder, most of them are from all over the world of medicinal material buyers, from time to time there are buyers "heroic" to package the whole car of medicinal materials.
Bozhou Shijiuli Town Early Morning Medicinal Materials Collection (Photo source: Photo by a reporter from the Financial Associated Press)
With the gradual activity of the market atmosphere of medicinal materials, the prices of some Chinese medicinal materials are rising. "One episode jumped, and the white peony tripled. Li Song, a local pharmacist in Bozhou, said that after the year, the prices of some local medicinal materials such as atractylodes, white peony and danpi rose sharply.
However, in Anguo, Northwest and other medicinal material markets, it is a different deserted scene, and Wang Ning, a pharmaceutical merchant in Anguo, suggested that at present, "see more and move less".
The national medicinal materials market has seen "hot in the south and cold in the north", and the categories of authentic medicinal materials in different regional production areas have risen in rotation. Overall, unlike last year's sharp rise in Chinese herbal medicines, the market expectations given by industry insiders this year tend to be cautious. Due to the simultaneous expansion of the downstream demand and the upstream supply side of Chinese herbal medicines, while the market opportunities are increasing, it is also becoming more difficult to maintain the balance between supply and demand of medicinal materials, and the risk of mismatch between the planting of some medicinal materials and the terminal procurement demand may be further amplified.
The medicinal herb market is "hot in the south and cold in the north"
This year, the peak season of Bozhou medicinal materials market is coming as scheduled. In Bozhou Kangmei Traditional Chinese Medicine City, the buyers of pharmaceutical factories stopped in front of various stalls, some were carefully selecting the quality of medicinal materials, and some were negotiating enthusiastically.
Bozhou Kangmei Chinese herbal medicine market (picture source: Photo by a reporter from the Financial Associated Press)
The rebound in the enthusiasm of decoction pieces and pharmaceutical factories in terminal procurement has also driven the price of local medicinal materials in Bozhou. "80 yuan/kg before the year of Atractylodes, now 160 yuan/kg, 30 yuan/kg before the white peony, now 60 yuan/kg, the price of Danpi fell from a high of 90 yuan/kg to 80 yuan/kg last year, and then rose again to 100 yuan/kg. Li Song told reporters.
Categories such as white peony and danpi that have risen significantly after the year can be regarded as real estate medicinal materials in Bozhou. Zhang Hua, a local pharmacist in Bozhou, told the Financial Associated Press: "Judging from the price changes and market sentiment of local white peony and danpi in Bozhou after the year, the medicinal material market is still a bull market this year. ”
A pharmacist in Shijiuli Town, Bozhou sells white peony (Photo source: Photo by a reporter from the Financial Associated Press)
The market enthusiasm in Yunnan, Guizhou and Sichuan has gradually warmed up, and the prices of Chinese medicinal materials in real estate have risen slightly by 2-3 yuan, and the market transaction activity has increased. At the same time, some spice varieties in Yulin, Guangxi Province have also received high attention. In the Bozhou and Anguo medicinal herb markets, people can be heard discussing varieties such as Chuanxiong and Zexiao in Sichuan from time to time.
In Anguo, Hebei Province, the largest Chinese herbal medicine market in the north, nearly half of the stalls are vacant in the Chinese herbal medicine trading hall, showing a different scene from the Bozhou market.
At the mouth of the country's largest information department, there are only two or three people drinking tea and chatting. Wang Ning, a pharmaceutical merchant in Anguo, said that the enthusiasm for trading in the local market is low now, and suggested that the varieties with high prices should not be entered for the time being.
On the one hand, the prices of Longdi traditional Chinese medicine such as angelica, codonopsis, licorice, bupleurum and other varieties rose sharply last year, and the excessively high prices led to a decline in the enthusiasm of buyers. In addition, merchants in Gansu speculated: "It may be that the market demand has decreased after the epidemic, and it is roughly estimated that the purchase volume of pharmaceutical factories this year will be less than that in the past three years." ”
The market outlook is expected to be both optimistic and cautious
Compared with the overall bullish outlook of the industry last year, industry veterans are more cautious about this year's Chinese herbal medicine market.
"High-priced varieties will definitely not rise, but some low-priced varieties may follow the market up, and there are still opportunities to rise. Sister Li, a pharmacist, expressed a clearer opinion.
Zheng Zhiwen, editor-in-chief of Yaotong Network Information, said: "The Chinese herbal medicine market actually has obvious cyclicality, generally three years up, three years down, three years flat, about ten years of a cycle, this round of Chinese herbal medicine prices rose from around 2020, with reference to historical experience, it has been more than three years, theoretically should enter the downward stage." Of course, at this stage, there will also be Chinese herbal medicines due to weather, supply and demand and other factors that will lead to the price increase of some varieties, but the big cycle may be almost over. ”
Some people also believe that the current market environment has changed greatly compared with the previous cycle, and it is still too early to judge that the Chinese herbal medicine market has entered a downward stage, Li Song said: "There are still funds entering the market, and some buyers of high-priced medicinal materials last year have gradually cashed in, and the market may be re-abundant." ”
The price trend of Chinese herbal medicines has become more difficult to predict, and Chinese patent medicine companies and doctors in grassroots clinics are more passive.
In 2023, the cost of medicinal materials will rise, and the gross profit margin of some pharmaceutical companies will decline slightly, such as Kangyuan Pharmaceutical (600557. SH) in 2023 injection sales gross margin of 73.63%, a slight decrease of about 2 percentage points from 75.38% in 2021 600085; SH) gross profit margin of the manufacturing segment in the first half of 2023 was 44.98%, a decrease of 4.29 percentage points from 49.27% in the same period of 2021.
There are also some companies with low gross profit margins that raise the price of their products due to rising costs, which transmits cost pressure to the terminal. Foci Pharmaceutical (002644. SH) announced this month that in view of the rising raw materials and production costs, the ex-factory price of its main proprietary Chinese medicine products will be adjusted from March 11, 2024, with an average price increase of 9%.
There may be a risk of information mismatch between supply and demand
In the exchanges with pharmaceutical companies and farmers around the country, the reporter of the Financial Associated Press found that the support of traditional Chinese medicine policies, the development of the traditional Chinese medicine health care market and the improvement of consumers' recognition of traditional Chinese medicine have become a consensus.
After the end of the pilot project, the market has changed from six to "hundreds of schools of thought", and the development of provincial formula granules has also brought the development of the industry into a new stage, and the industry expects that the market will develop into a scale of 100 billion yuan in the future.
The state has promoted the construction of traditional Chinese medicine departments and also promoted the development of the traditional Chinese medicine decoction piece industry, and in the pharmaceutical enterprise industrial zone in the north of Anguo City, a number of traditional Chinese medicine decoction pieces enterprises are building new factories to expand the production scale of enterprises. A staff member of a decoction piece company said: "The new plant is four stories high, which is twice the size of the current factory, and the equipment is said to be the latest one." ”
A new plant under construction in a decoction piece factory in Anguo (Photo source: Photo by a reporter from the Financial Associated Press)
In addition, the lifting of the limit on medical insurance payment for proprietary Chinese medicines last year and the expected update of the basic drug catalogue this year will also drive the growth of demand for Chinese herbal medicines. Some people in the industry expect that the update of the basic drug catalogue may focus on the types of proprietary Chinese medicines, and greatly increase the number of proprietary Chinese medicines in the catalogue.
After the change in market supply and demand expectations, the price of Chinese herbal medicines may rise, and the planting enthusiasm of Chinese medicine growers will increase significantly. Bozhou medicine farmer Miao told reporters that he contracted 50 acres of land in Henan this year to plant atractylodes, an acre of land can produce about 200-300 kilograms, as long as the growth is normal, according to the current price, is expected to earn more than 1 million yuan.
According to him, the price of a kilogram of atractylodes seeds has risen from dozens of yuan in previous years to 15,600 yuan, and the land contract price for planting Chinese medicinal materials has gradually risen from 800 yuan/mu in the past to 1,200-1,500 yuan/mu.
And the price increase is not only driven by the enthusiasm of the cultivation of medicinal materials, the staff of Bozhou freight station said: "This year, the delivery of medicinal materials and seedlings is obviously a lot, and two or three cars can be sent out a day." ”
However, the expansion of the planting scale of medicinal materials does not necessarily make the growers profitable, because the planting of Chinese medicinal materials has a long periodicity, if the planting scale of a single variety is too large, resulting in an imbalance between market supply and demand, the price of medicinal materials may be lower in the future, and high-priced seedlings and land rent will lead to losses for growers.
A Bozhou pharmacist told reporters: "Although the enthusiasm of the Chuanxiong market is high now, I still dare not purchase it now, because the price of Chuanxiong is higher in the first two years, and the planting area in Sichuan has increased significantly. The other party said that the purchase "still has to wait and see".
"When the price of a certain traditional Chinese medicine is high, many people will flock to it, and the planting area of this variety will increase significantly in the following year, but when it is new, it will be rotten because of the large increase in production. Liu Liang, a pharmaceutical merchant in Anguo, told reporters, "The main thing is that you can't know how much this medicinal variety has been planted in the country this year." ”
This situation often occurs in the Chinese herbal medicine market, due to the market changes and the price explosion of some medicinal materials last year, the risk of information mismatch may be doubled.
(In the article, Li Song, Liu Liang, Zhang Hua, and Wang Ning are pseudonyms)
(Financial Associated Press reporter Zhang Liangde)