(Ecns.cn) – The once soaring prices of Chinese herbs used in medicines have been heading straight down for the past months and plummeted to a historic low as the government continues to step up restrictions to stabilize the market.
In Anguo, a city that has been producing and selling medicinal herbs for 1,000 years in North China's Hebei Province, it was reported that people are not simply doing business there but gambling for price hikes to seek windfall profits. However, they have suffered greatly in this capital game, resulting in substantial losses for herb growers.
'If we lose, we lose'
As the largest collection and distribution center of medicinal herbs in China, more than one third of Anguo's GDP comes from the business of herbal medicines every year. After arriving in the city, one usually dashes to the local herbal medicine market and begins to select products such as tree bark, wild flowers, and roots.
The Oriental Medicine Hall is one of the most professional trade centers of medicinal herbs in Anguo. There are more than 2,000 kinds of herbs being sold at different stalls. Every year, the volume of transactions reaches about 4.5 billion yuan ($695.7 million) there, with a cargo capacity of 100,000 tons, reported the China Economic Weekly.
However, the situation is quite different this year. During the normally "golden" September and "silver" October, business was sluggish in the Oriental Medicine Hall and there were few customers there on a daily basis.
Mr. Liu, a truck driver at the trade center, told the China Economic Weekly that he worked day and night without much time for a break last year. But recently he has been relaxing with a totally leisurely pace of work. Liu revealed he has not even started his truck for a month.
According to a vendor, one day an official from the health sector of Chifeng City in Inner Mongolia went there to collect some herbs and all the other vendors rushed towards him like a swarm of bees. When the official told them he was just visiting the place for products that were in short supply in Chifeng, the vendors hissed at him and dispersed immediately.
As the official saw medicinal leeches at Liu Laixi's stall, he asked Liu to sell some but Liu refused. Liu said he purchased the leeches at 760 yuan ($117.5) per kilogram, but the market price was only 500 yuan ($77.3) at the moment. So he decided to hoard them all and wait for a better time.
In fact, many vendors are facing the same situation. Three years ago, they regretted not having sufficient stocks of medicinal herbs when prices were soaring high, but now they have to accept the sudden drop in prices, like riding a roller coaster.
The 57-year-old vendor Old Xu said it is just like gambling. In 2009, the price of Rhizome Dioscorea hit a high at 35 yuan ($5.4) per kilogram. In 2010, the price soared to 55 yuan ($8.5), and for many it was like gold scattering on the ground.
Since then, Old Xu has been hoarding the product and believed that he would make a large sum of money. However, he never thought the price of Rhizome Dioscorea could drop to less than 10 yuan ($1.5) this year. But as an experienced vendor, he says "If we lose, we lose." The only thing he can do is wait for the prices to rise.
