HerbalEGram: Volume 8, Number 2, February 2011
Global Prices of Traditional Chinese Herbs Rising
The global Traditional Chinese Medicine (TCM) industry has naturally felt the impact of inflation throughout past years; in 2010, however, herbs used widely in TCM experienced much higher price increases than usual. The rate of
inflation in China is now at its highest level in over 2 years,1 and
the country’s various enterprises, including its market for herbs, are feeling
the brunt of this situation. For example, TCM products sold in 2010 in China—especially
in Northern and Eastern Chinese cities, such as Anguo and Shanghai—most of which
were medicinal herbs, doubled in price (on average).1-3 Prices of certain ingredients
and particularly popular herbs have risen considerably higher.1-7
Many factors are being blamed for the elevated prices,
including cogent market demand, the Yuan’s increasing strength, weather/climate
changes, herbs being cultivated more than wild collected, general economic
proceedings, recent public health crises, and herbal supply shortages.1-7
Approximately 85% of the total amount of Chinese traditional medicines in the
market are said to have seen surges in price, according to various online reports
referencing a recent pronouncement by the China Association of Traditional
Chinese Medicine (CATCM).3,4 Other reports by CATCM found that the cost of over
25% of herbal medicines at least doubled in the second half of 2010,2
and that some raw herbal materials and finished herbal medicine products
have supposedly seen price spikes as steep as 700% over the past year.3
The increase in prices is also spreading around the world. In
the Southeast Asian country of Singapore, for example, the cost of many herbs
used in TCM rose by approximately 30% last year.6,7 According to Subhuti
Dharmananda, PhD, director of the Institute for Traditional Medicine in
Portland, Oregon, herb suppliers in the United States have also experienced increased
prices across the board, with the increase in prices up to 30% in the
past 3 years (e-mail, January 7-8, 2011). “This last year (2010) was possibly
the highest percentage increase,” he said. “The prices of certain bulk raw
materials (such as dried leaves, flowers, roots, and barks) have increased by
as much as a factor of 3 within a single year.”
Public Health Crises
The 2010 increase in TCM herb prices is not entirely unique,
as prices have risen during recent episodes of public health crises. Dr. Dharmananda
said the cost of Chinese herbs remained “relatively stable” for approximately
the first 30 years after they became of widespread interest in the West in the
mid- to late-1970s. But, he continued, a dramatic upswing in prices began with
the SARS (Severe Acute Respiratory Syndrome) epidemic in 2003 and 2004 and has
continued, sometimes with significant cost jumps.
“Because SARS was a major concern in China at that time and
there was no known treatment, Chinese herbs came into very high demand as a
possible remedy,” said Dr. Dharmananda. Anti-infection herbs such as isatis (Isatis
indigotica), which is used for its antimicrobial and antibiotic properties,8
fell into very short supply as a result, forcing prices upward. Before SARS, the
root of white peony (Paeonia lactiflora)
cost approximately 3 Yuan per kilogram ($0.45 US) and the price fluctuated
very little for years.8 In 2010, however, the price increased to
around 20 Yuan ($3.03 US) per kilogram due to limited production. According to Dr.
Dharmananda, the prices started increasing at the supply chain level of basic
herb supplies/raw materials.
John Scott, president of Golden Flower Chinese Herbs in
Albuquerque, New Mexico, said the recent scare surrounding H1N1 (also known as
swine flu, a subtype of influenza A virus and the most common cause of human
influenza in 2009) also caused the cost of TCM materials to skyrocket in 2009 (oral
communication, January 12, 2011). According to Scott, the prices of honeysuckle
(Lonicera spp .) flower,
which is used traditionally for a variety of reasons, including as an antimicrobial,
to lower fever, and to reduce inflammation,9 “went through the roof.”
This partly could have been due to the State Administration of TCM recommending
people take the Chinese herbal mixture Lian
Hua Qing Wen to defend and fortify their immunity. Versions of this mixture
contained forsythia (Forsythia suspensa) fruit and honeysuckle flower,10
the latter of which now costs up to 5 times more than it did a couple years ago.6,7
Factors other than temporary health crises have also been in
play during the past decade, one of which is China’s adoption of a market-style
economy. According to Dr. Dharmananda, this new economic system replaces a
majority of the communist government-controlled economy and has successfully
raised the living standard of the Chinese people. As a result, the Chinese
populous is more able to purchase medicinal herbs and herb-based products at
“Previously,” said Dr. Dharmananda, “there was almost no
discretionary spending on Chinese herbs, which mainly had 2 destinations:
prescription to patients in hospitals, and export. Today, the general
population can go to stores and purchase health-promoting and symptom- or
disease-treating products, and entrepreneurs can develop consumer products that
utilize herbs for a variety of uses.” According to Dr. Dharmananda, the large
Chinese population and the country’s long-standing experience with herbs have
led to a rapid increase in demand for domestic use of the herbs. “With greater
demand come higher prices,” he said.
Scott of Golden Flower Chinese Herbs agreed that market
conditions are drastically affecting these plants and their availability. The
price of labor, though somewhat static in recent years, has increased 100%,
Scott said, and labor costs will subsequently push herb prices up. Transportation
costs have also gone up, partly due to spikes in fuel costs.
Ellis, president of Spring Wind Herb Company in Berkeley, California, said
there are 3 main considerations that most suppliers mention when asked why 2010
had such a “meteoric rise” in prices: rampant inflation in China, greed inherent
in the “get-rich-quick” atmosphere of modern-day China, and last year’s drastic
weather that resulted in floods and drought (e-mail, January 25, 2011). These
factors, when combined with the US dollar's loss in value, have caused many
herbs to almost double in cost in the past year, Ellis continued.
herbs that were previously sold for export because they were too expensive for
Chinese consumers are now being sold in China to the new ‘well-to-do class,’” said
Ellis. “Thus, the higher demand for higher grade (read: export-grade) herbs has
caused a price rise in certain herbs.” According to Ellis, this coincides with
a growing popularity of Yang Sheng
(translated literally to “nourishing life”), which is the use of herbs to
promote good health and long life. “Yang
Sheng books fill the book stores these days,” said Ellis. “This has led to
the rise in prices of several supplementing herbs."
TCM becomes more popular not only within China itself, but in the Western
world, Scott said prices of more mainstream herbs such as dong quai (Angelica sinensis) root and astragalus (Astragalus
spp.) root rise
considerably. Prices of dang shen (Codonopsis pilosula) have also gone up
considerably over the last several years, according to Scott. He said the price
for this herb is “probably double” what is was a few years ago (e-mail, January
rise in demand is not without consequences. “When an herb becomes popular, it
becomes threatened,” said Scott. “In China they become less discriminatory of
what they are picking.” This “irresponsible picking” becomes a problem as time
goes on, Scott said, noting that it is becoming more important to promote commercial
cultivation of these herbs as opposed to wild collecting.
Interestingly, a transition from wild collecting to
cultivation is currently taking place in China. Just 30 years ago, according to
Dr. Dharmananda, about 85% of China’s medicinal herb supplies came from wild
sources. Today, it is less than 50%. “There are multiple causes for the shift
in production,” said Dr. Dharmananda. “Among them are dwindling land areas for
wild collection (due to the growth in Chinese population and use of land for
expanded production of goods); concerns about endangered species; desire to
assure consistent supplies (by having a particular species, rather than several
that might be collected, and by uniform growing conditions); and the changed
Chinese economy which favors development of herb farms. A more rapid conversion
of supplies has taken place in the past decade than previously.”
Consequences of Foreign Influence
Foreign management of imported herb materials has also
significantly contributed to the inflation in TCM herb prices. According
to Dr. Dharmananda, consumer and regulatory demands implemented in recent years
have led to the need for expensive testing of herb materials, and for finished
products, such tests may be carried out 3 times (original raw materials; after
making an herb extract; and after making a completed product, such as tablets or
Ingredient qualification, for
example, enforced through recent policy such as the US regulations on current Good
Manufacturing Practices (cGMPs)— which
aim to help ensure the cleanliness, identity, and general quality of herbal raw
materials —add to the cost paid
by consumers, whether the increase is derived from the manufacturer or the
ingredient supplier. “A company that provides both the standard crude herbs
(largely untested, as has been the case for years), and tested crude herbs
(such things as evaluation of heavy metals, pesticides, and microbes, made
available more recently), charges 20% more for the latter,” said Dr.
Additionally, when TCM products and ingredients seep into
the US consumer market and are widely marketed, an increase in the cost of
those herbs quickly follows. A good example, according to Scott, would be the
fruit of Lycium spp ., which
is commercially called goji berry. Often referred to as a “superfood,”11
goji berry has recently gained popularity in the United States due to health
claims that it is a nutritionally dense food.
A scientific report published by the State
Scientific and Technological Commission of China, which declared the goji berry
a national treasure,12 stated that after ingesting 50 grams of fresh
goji berry juice, subjects showed an increase in white blood cell counts and a
75% increase in levels of antibody
immunoglobin A (lgA).13,14 This increased attention
and “fashionable” status in the world of Western natural health has caused prices
of goji berry to rise.15
According to Dr. Dharmananda, the
increasing prices of Chinese herbs would not have been as notable in the
context of a rapid growing consumer economy, but the downturn in the Western
economies that began in 2007 and accelerated radically in 2008 and spread
throughout the world has greatly impacted the purchasing power of consumers.
“The elevated herb prices put a strain on all levels of the market in the
West—whether manufacturing with Chinese herb raw materials, distributing
manufactured products, or prescribing herbs to patients—as there is a strong
motive to keep consumer prices affordable, so as not to destroy the demand that
has been established over the years,” Dr. Dharmananda said.
utilization of Chinese herbs in manufacturing is another determinant in the
pressure on TCM material costs. According to Dr. Dharmananda, product
manufacturers in Japan and South Korea, making good use of their nation’s
well-developed commercial base, may buy up vast quantities of individual herbs
to make finished products that are distributed widely— primarily in their own
countries, but also for export to other nations. The same approach has been
pursued recently by some companies in Europe, the United States, and Canada,
and as a result, the availability of the herbs selected for such products can
be very limited, and this drives up the price for remaining materials.
Climate change and weather events are other considerable
factors precipitating the upsurge of TCM herb prices. Earthquakes, floods,
droughts, and other natural disasters that have recently plagued China have destroyed
many herb crops, therefore hindering the availability and accessibility of
certain materials used in TCM. “Floods have pushed people into the woods to
look for and pick winter worm fungus (Cordyceps
sinensis), which is already an expensive herb to begin with,” said Scott. On
the opposite side of the weather spectrum, the severe October 2010 drought in
the Yunnan Province (which is responsible for 80% of the herbs/natural ingredients
produced for TCM in China) caused a heavy decline in the output of herbs.16
Cultivated North American ginseng (Panax quinquefolius)
root also has experienced an increase in price due to environmental influences.
The lake freeze in Wisconsin during the spring of 2010 desecrated ginseng crops
across the state, and as a result, a sudden decrease in supply led to elevated
prices for the root.17 An online report claimed that one type of ginseng
root that cost 50 Yuan ($7.50 US) per kilogram at most 2 years ago, recently
traded at 10 times that amount.1 Another report postulated that
prices for prince ginseng root (Pseudostellaria
heterophylla), a winter tonic, recently have risen from 80 Yuan ($12.01 US)
per kilogram to as high as 340 Yuan ($51.04 US) per kilogram.3,18
It is probable that little can be done to alter the
situation regarding the numerous pressures on the Chinese herbs and herbal
products. “The Chinese economy continues its boom, even if at a slower pace,
and that improvement in Chinese life is considered a good thing,” said Dr.
Dharmananda. The promotion of the health benefits of Chinese herbs to Westerners
will continue, he noted, and this will result in new products, as well as
higher demand for products, something that many herb enthusiasts see as a positive development.
The price increases of the past few years are properly seen
as a part of an ongoing process, Dr. Dharmananda continued. There may well be a stabilization point as high
prices moderate demand, as the shift from wild to cultivated supplies is
completed, and as product manufacturers branch out from Chinese herbs to other
types of products. “It is reasonable, though, to expect the price of Chinese
herbs and their products to increase, overall, by another 30% over current
levels in the next few years,” said Dr. Dharmananda.
2. Traditional medicine prices are elixirs for
sellers. China Daily. December 22, 2010. Available at: www.china.org.cn/business/2010-12/22/content_21593429.htm.
Accessed January 13, 2011.
3. Shanghai hikes prices of Chinese medicines.
CapitalVue. December 10, 2010. Available at: www.capitalvue.com/home/CE-news/inset/@10063/post/1262041.
Accessed January 14, 2011.
4. Fei M. TCM producers haggard by rising cost
pressures. GlobalTimes. December 14, 2010. Available at: www.business.globaltimes.cn/industries/2010-12/601474.html.
Accessed January 14, 2011.
5. Fei L. Chinese medicine prices go sky high. Global
Times. November 18, 2010. Available at: www.business.globaltimes.cn/industries/2010-11/592986.html.
Accessed January 15, 2011.
6. Hui P. Prices
of TCM herbs shoot skyward. The Straits Times. December 28, 2010. Available
Accessed January 13, 2011.
7. Traditional Chinese medicine herbs prices
surge in Singapore. Global Times. December 29, 2010. Available at: www.news.xinhuanet.com/english2010/china/2010-12/28/c_13667515.htm.
Accessed January 18, 2011.
root & leaf (Isatis tinctoria). The Tillotson Institute of Natural Health
website. Available at: www.oneearthherbs.squarespace.com/important-herbs/isatis-root-leaf-isatis-tinctoria.html.
Accessed January 21, 2011.
properties of honeysuckle. HerbClip. September 13, 1996. (No.
083063-094). Austin, TX: American Botanical Council. Review of Lonicera japonica, honeysuckle by Van
Galen R. Australian Journal of Medical Herbalism. 1995;7(4).
L. International report on herbs and swine flu. HerbalGram. 2009;84:16-17.
L. The cheerful Lycium berry. HerbClip News. May 15, 2009. Available at:
12. Health promoting
properties of wolfberries. Natural Health Way website. Available at: www.naturalhealthway.com/wolfberry/wolfberrystudies/wolfberrystudies.html.
Accessed January 25, 2011.
Experiment on Lycium. State
Scientific and Technological Commission of China. Register No. 870303
Experiment on Lycium.
State Scientific and Technological Commission of China. Register
C. Goji berries price increases, how much are the benefits worth? PacHerbs.
November 30, 2010. Available at: www.pacherbs.com/archives/4490. Accessed January 21, 2011.
Z. Winter TCM demand and costs up. GlobalTimes.
October 12, 2010. Available at: www.shanghai.globaltimes.cn/business/2010-10/581219.html.
Accessed January 21, 2011.
17. Miller J. Wisconsin ginseng farmers rebound from
spring freeze. Green Bay Press Gazette.com. Available at: www.greenbaypressgazette.com/article/20101205/GPG03/12050650/Wisconsin-ginseng-farmers-rebound-from-spring-freeze
.Accessed January 21, 2011.
18. Wisconsin ginseng farmers fight to protect product
reputation. HerbalGram. 2007;75:54-61.