Nursery Stock Price Trend Analysis: 2016 Market Conditions

Because of the current emphasis on greening, there are more and more landscaping projects, and nursery stock prices have soared along with them, but in the past two years there has been a downward trend again, and many industry insiders believe that nursery stock prices have entered a trough period. So what direction will prices take in 2016?

Take the Chinese scholar tree (Sophora japonica) as an example. In the spring of 2013, the unit price of a 4 cm Chinese scholar tree reached 65 yuan; in the spring of 2014, the price of a 4 cm Chinese scholar tree reached 55-60 yuan; but in the spring of 2015, the price of a 4 cm Chinese scholar tree was only 45-50 yuan. Now the price of Chinese scholar trees of the same specification has fallen by a large margin again.

Take the lacebark pine (Pinus bungeana) as an example. Around 2012, the unit price of good 2 m nursery stock was 600-800 yuan, and 3 m stock was 1,200-1,500 yuan, while now it is only half of the price at that time.

Because of the impact of relatively high nursery stock prices, plus the fact that rural land transfer has become easier, many large growers contracted land to cultivate nursery stock. Through two or three years of careful management, there is now a large amount of small- and medium-sized nursery stock being held in nurseries. In addition, land contract fees have continued to rise and labor costs have increased, so many small seedling growers are overburdened. Therefore, we believe that in 2016 the nursery stock market will show the following changes:

1. Grafted nursery stock: prices will not rise in the near term and may remain at a low level.

For nursery stock grafted using small rootstocks, such as redleaf plum (Prunus cerasifera), ornamental peach (Prunus persica), and cherry blossom (Prunus serrulata), because in recent years the rootstocks have been easy to propagate, grafting techniques have matured, and grafting is fast, nursery stockpiles are also relatively large, and in two or three years they will again need to be transplanted, so prices will not rise in the near term and may remain at a low level. However, for some tree species that have high rootstock requirements and slow grafting speed, prices may still remain relatively high, such as the dragon-claw Chinese scholar tree (Sophora japonica var. pendula). Because in previous years the prices of small- and medium-sized Chinese scholar trees were relatively high, medium-sized rootstocks are also scarce, so we think prices at least will not fall too much.

2. Evergreen landscaping nursery stock: prices are unlikely to rebound in the near term.

Because propagation is fast in places such as Jiangsu and Henan, and prices were good in previous years, the domestic planting volume is very large. Prices are already 50% of what they were in previous years, yet the stock is still hard to sell, and prices are unlikely to rebound in the near term.

3. Conventionally cultivated nursery stock: nursery stock prices will hover at a low level.

For example, Chinese scholar tree, plane tree (Platanus orientalis), white ash (Fraxinus chinensis), goldenrain tree (Koelreuteria paniculata), willow, and other easily propagated small- and medium-sized nursery stock have large nursery stockpiles. In 2016 and for some time afterward, nursery stock prices will hover at a low level. However, large-specification nursery stock can cater to the wishes of landscaping owners, namely immediate planting and immediate effect, so prices will remain at their original level.

4. Some tree species still have room for development.

Because in previous years nursery stock prices were consistently not high and propagation costs were low and the technology simple, there is now a gap in small seedlings. For example, Chinese arborvitae (Platycladus orientalis) can be appropriately grown from some seed-grown seedlings.

In short, nursery stock prices are now at a fluctuating trough. Although the central government emphasizes accelerating ecological construction, information now flows smoothly and transportation is very fast. Although supply-demand conflicts for landscaping seedlings may appear in some areas, the overall pattern will not change much, and it is expected that nursery stock prices will remain in a trough for some time to come.