Two Main Lines and Three Auxiliary Lines Strike Up Traditional Chinese Medicine Prices

The business club reported on October 18th that along with the Chinese herbal medicines market index rushed to a historical high of over 4140, the next market trend has become a hot topic of business. The sensitivity of the market has also been significantly increased. A slight sign of trouble will prompt the price of the relevant species to react quickly. What is the relationship between the economic environment at home and abroad and the supply of agricultural and sideline products? What are the deep reasons for the skyrocketing Chinese herbal medicine prices? Next, where will the drug market go?

28 yuan for a Chinese cabbage! South Korean people snapped up cabbage! In recent days, the most eye-catching news in the agricultural and sideline products industry has always been the sky-high price of cabbage. As a fresh vegetable with a two-month growth cycle that is extremely difficult to accumulate, it is estimated that “hype theory” will no longer come out on the streets. So where is the problem?

The author believes that this year's skyrocketing agricultural and sideline products and even Chinese herbal medicines will ultimately be inseparable from the “two main lines and three auxiliary lines”. This “two main lines and three additional lines” will continue to have an impact on the production and supply of these raw material varieties.

Main line 1: The rapid economic development is still based on high investment and high consumption. China has become a powerful engine for world economic growth. According to data released by the World Bank recently, China's GDP growth rate in 2010 will reach 10.3%, and it will be around 9.6% in 2011. Unfortunately, although we are constantly advocating a "low-carbon economy," China's rapid economic growth at the current stage is still at the expense of high input and high consumption. Take automobile consumption as an example. You must have been congested by traffic jams and air pollution. However, have anyone ever proposed to slow down the consumption of cars and reduce the production of cars? Because we want to stimulate domestic demand and encourage consumption, we must look to the European and American lifestyles. High consumption will inevitably require "high carbon", and "high carbon" will inevitably require high consumption of raw materials. This is really a big fallacy.

Main line 2: The production and supply system of raw materials, especially agricultural and sideline products, is backward. The land circulation system for the purpose of intensive production still needs time, and the modern agriculture marked by order agriculture and intensive production is a long way to go. The production and supply system of agricultural and sideline products still has not escaped the production mode of a smallholder economy. Decentralized production means blind production and low risk resistance. The production of Chinese herbal medicines has been reduced to the "corner corner" economy in many regions, and the 61, 99 troops (old people and children staying in rural areas) have dispersed production to maintain the downstream industrial chain.

As a result, problems arise. The lifestyle (demand) has developed to the level of Europe and the United States, and the production method (supply) still remains in the third world of Asia, Africa and Latin America. The structural contradiction between the fast-developing economy and the fragile production base is accumulating over time, and it will sooner or later be an outbreak. The skyrocketing Chinese cabbage, the soaring mung bean, and the soaring medicinal herbs are the manifestations of this contradictory and concentrated outbreak. In other words, the above two main lines are the main causes of contradictions. The existence of the main cause directly and indirectly led to the emergence of the following three additional lines (ie, secondary factors of contradiction).

Auxiliary line 1: Increased inflation expectations. High consumption will inevitably bring about high demand for raw materials. When the total social demand is greater than the total supply of society, inflationary pressure will gradually increase, which is evident from the current price level of the base currency gold. When the money is worthless, the price of the commodity must rise. When the growth cycle lasts two months, the price of tens of kilograms of cabbage per mu rises to 2 to 3 yuan/kg, and farmers are expected to plant a few kilograms of Chinese herbal medicines for a kilogram (not to mention the cabbage can not be sold to feed pigs, herbs The rotten market does not eat pigs. Is it realistic?

Auxiliary line 2: sudden increase in factors. The most direct result of the "high-carbon economy" is air pollution and an abnormal climate. Looking back at the past few years, not to mention the whole world, it is just enough for China to be bustling: the south is freezing, the southwest is arid, and the torrential rain in Hainan. The news of the millennium's extreme cold has recently been heard. At the same time, anomalous temperatures and the intensification of globalization have led to repeated outbreaks of epidemic diseases, and the cycle of these outbreaks is getting shorter and shorter. Frequent disasters will inevitably jeopardize the production of medicinal materials; the epidemic will frequently increase the demand for medicinal raw materials for a short period of time. The superposition of two phases will certainly push up the prices of medicinal herbs.

Auxiliary line three: too many intermediate links. When money is worthless, real estate and raw materials products will become "safe havens". The ten years of low prices of Chinese herbal medicines and the production of broken chains create a good opportunity for capital intervention; and traditional circulation modes of traditional Chinese medicine characterized by multiple links and multi-channel circulation provide the most convenient channel and “hotbed” for capital intervention. More money and less goods have added to the price system that has been out of control.

Based on the above reasons, the author believes that due to the impact of the environment and the characteristics of Chinese medicine industry, the market trend of Chinese herbal medicines will undergo the following changes:

1. Before March next year, the Chinese herbal medicine market may experience periodic stability or even a correction. However, if the overall price level is not likely to fall before the price increase, the public must accept the reality that the price of medicinal herbs will increase.

2. There is a risk of diving in some herbal medicines that are high in price, but at present, they are still at historically low levels or lower than the cost of production. There is still hope that prices will rise to a reasonable position.

3. If the wild species with limited resources have oscillations in a certain period, the overall price trend will continue to rise.

4. As long as the structural contradiction between supply and demand is not resolved on the 1st, the current situation of Chinese herbal medicines will not calm down on the big day. Even if macroeconomic adjustments and policies are used to suppress pressure for a short period of time, it will not take long for chaos to happen, and the out-of-control will be even more serious than before the suppression.

5. The restructuring of the Chinese herbal medicine industry and the construction of a modern circulation system will usher in the best development opportunities in history.