Export Volume of Chinese Medicinal Materials and Decoction Pieces Declined in the First Half of 2015

According to statistics from the Traditional Chinese Medicine Department of the China Chamber of Commerce for Import and Export of Medicines and Health Products, in the first half of 2015, China's export value of Chinese medicinal materials and decoction pieces was 550 million USD, down 7.50% year on year. This was mainly reflected in a 10.43% year-on-year decline in the average export price. This was the first decline in export value since the major bull market of 2010.

I. Export value to traditional Asian markets declined slightly

For a long time, Japan, South Korea, Hong Kong, Taiwan and ASEAN countries have been the main export markets for China's traditional Chinese medicinal materials and decoction pieces. These markets accounted for 82.64% of China's total export value of Chinese medicinal materials and decoction pieces, down 2.66% from 85.3% in 2013.

Japan: In the first half of 2015, China's export value of Chinese medicinal materials and decoction pieces to Japan was 92.1847 million USD, down 27.20% year on year. In addition to some force majeure factors, the decline in transactions in the Japanese market was also related to Japan's continuously rising quality requirements for raw materials of Chinese medicinal materials. In recent years, the volume of domestic wild high-quality medicinal material resources has been increasingly declining. In order to ensure a stable supply of goods, some Japanese companies have already trial-planted some Chinese medicinal materials in Vietnam and South America and other regions. At present, China's exports of medicinal materials and decoction pieces to Japan are mainly wild licorice, high-quality Pinellia ternata, Poria cocos, Panax notoginseng, Paeonia lactiflora and ginseng.

Hong Kong: In the first half of 2015, the mainland's export value of Chinese medicinal materials and decoction pieces to Hong Kong, China was 185 million USD, down 18.14% year on year, and its share of export value also declined compared with the same period last year. Hong Kong, China's advantage in entrepot trade has somewhat declined. At present, the Chinese medicinal material products exported from the mainland to Hong Kong, China are mainly Panax notoginseng, Codonopsis pilosula, Eucommia ulmoides, Atractylodes macrocephala, chrysanthemum, Ligusticum chuanxiong, Paeonia lactiflora, ginseng and Rehmannia glutinosa. Hong Kong, China has always been the main import market for Cordyceps sinensis from the mainland. In previous years, as the price of Cordyceps sinensis continued to rise, its export volume began to decline year by year. Although the Cordyceps sinensis market fell more sharply this year than in previous years, due to the poor overall economic situation, the export value is still in a declining trend.

II. Export enterprises of Chinese medicinal materials and decoction pieces showed diversified development

Private enterprises are the main force driving exports of Chinese medicinal materials and decoction pieces. In the first half of 2015, the mainland had 486 exporters of Chinese medicinal materials and decoction pieces, with an export value of 400 million USD, accounting for as much as 72.39%; the number of exporters that were sino-foreign joint ventures, cooperative enterprises and wholly foreign-owned enterprises was 89, with an export value of 78.4128 million USD, accounting for 14.31% of export value; state-owned enterprises accounted for 13.29% of export value. It is worth noting that among private enterprises, private companies accounted for 69.34% of export volume.

Guangdong and Guangxi mainly export by relying on their locational advantages. Guangdong Province exports because it is adjacent to Hong Kong, China, Taiwan, China and Southeast Asia and other main export destinations for China's Chinese medicinal materials and decoction pieces, and its products are mainly ginseng, Astragalus membranaceus, Rehmannia glutinosa and Codonopsis pilosula and other varieties; Guangxi exports because of its geographical advantage of being close to Vietnam, and most Chinese medicinal materials and decoction pieces are exported to Vietnam through border trade.

In terms of export volume, in the first half of 2015, Anhui ranked first in the country in exports of Chinese medicinal materials, and Anhui's exports of Chinese medicinal materials were mainly concentrated in Bozhou. Bozhou is a nationally famous “Capital of Chinese Medicine”, with a planting area of Chinese medicinal materials accounting for about 1/10 of the country's total and an annual output of Chinese medicine decoction pieces accounting for about 1/3 of the country's total. It has initially formed a relatively complete industrial system integrating Chinese medicinal material planting, processing, sales, scientific research, exhibitions, tourism, health preservation and healthcare.

III. Export volume and prices of mainstream medicinal material varieties rose and fell unevenly

Ginseng export volume decreased sharply year on year. Ginseng prices rose sharply in the previous two years. Although there has been some downward adjustment at present, its price level is still high. In 2012, ginseng could be directly used as a raw material for food and beverages and added to various foods. This will open a broad new path for the development of ginseng health foods in China. Ginseng export prices rose steadily, and for a period even European and American buyers who had never stockpiled goods in the past rushed to restock. However, after ginseng export prices rose 55% year on year in 2012, the subsequent increase slowed markedly. In the first half of 2015, China's ginseng export volume was only 456,201 kg, down 35.89% year on year, and the export price was 114.07 USD/kg, up slightly by 6.18% year on year.

Goji berry exports increased basically steadily. In recent years, as the international market has gradually understood and recognized the health benefits of goji berries, goji berries have gradually entered the mainstream Western society from the traditional Asian and ethnic Chinese markets. At present, goji berries have consistently been the variety with the largest share of China's export value of medicinal materials and decoction pieces. In the first half of 2015, China's goji berry export volume was 4,900,520 kg, down 8.43% year on year, and the export price was 11.94 USD/kg, up 28.74% year on year.

Although China's exports of medicinal materials and decoction pieces declined only slightly in the first half of 2015, measures such as rising enterprise labor costs and some countries' strengthening of standard testing for heavy metals and pesticide residues should also attract our great attention. We can still remain cautiously optimistic about the future market.