Herb Supply & Sustainability Update October, 2023
Updates in years past have usually emphasized the impacts of global demand and government regulations on herb supply. These challenges continue, but moving to the forefront this year is the role of climate change and the resulting circumstances caused by unpredictable weather patterns. While there are other issues adversely affecting the availability and production of TCM herbs in China, it is clear that climate change is seriously affecting herb cultivation and production.
This year, farmers in China were caught in a seemingly never-ending cycle of weather extremes, with prolonged droughts followed by extreme flooding and temperature swings, leaving fields and crops vulnerable to damage.
These disastrous weather events have further disrupted the delicate balance of the already-fragile herb supply chain, which in reality has not fully recovered from the effects of the Covid pandemic. The weather this year created a ripple effect that impacts everyone from growers and distributors to manufacturers and consumers. Here are some of the key challenges we're currently facing:
- Decreased Harvest Yields: Unpredictable weather patterns have led to reduced herb harvests, causing supply shortages. Some herbs, like Jing jie/Schizonepeta and Jin yin hua/Lonicera japonica flower, had already experienced significant demand increases since the onset of the Covid pandemic. Prolonged, extra-heavy rains this past July and August caused catastrophic damage across regions. Flower herbs were literally swept away, and inundated fields caused water-logged root herbs to rot. Prices this season have nearly tripled compared to the already high prices of previous seasons. Another example of a severely impacted herb is Suan Zao ren/Ziziphus jujube seed, the price of which has increased by 500%! The downstream impact of this means that formulas such as Suan Zao Ren Tablets, An Mian Pian Tablets and Bu Nao Tablets containing Suan zao ren could double or more in price with the next batches.
- Old/New Quality Concerns: Not only have we heard that herbs were harvested/salvaged from flooded areas anyway, thereby obviously making the quality of some questionable, but with general uncertainty and fluctuating demand, market speculation has increased. Speculators are no longer content with hoarding herbs for a season or two, but have started to keep them in long-term cold storage for release at market highs. Lately, our buyers have noticed that a number of herbs in the general marketplace, like Fang feng/Saposhnikovia divaricata root, have black centers. This is what’s known as “chilling injury” where there is physiological change happening inside the root from being stored in the cold for extended periods. After the root is re-exposed to room temperatures, it begins to rot from the inside. Unfortunately, processors are able to hide this damage by fumigating the herbs with sulfur dioxide before drying.
- Price Volatility: Due to supply shortages and increased production costs from climate-related challenges, herb prices have become more unpredictable generally. Worsening climate change has encouraged more hoarding as expectations of permanent cyclical droughts and floods increase. Hoarding of course has caused prices to soar further. For instance, Dang gui/Angelica sinensis, Dang shen/Codonopis pilosula, Huang lian/Coptis chinensis, Bai zhu/Atractylodes macrocephala, Gan cao/Glycyrrhiza uralensis, Fang Feng/Saposhnikovia divaricata, and Suan zao ren/Ziziphus jujube fruit have all seen varying levels of increase from 200%-500% since 2022.
- Logistical Issues: Transporting herbs has become more complicated due to disruptions caused by weather events, leading to delays and increased transportation costs. Floods washing out roadways have posed some logistical difficulties, as well as weather and economic circumstances causing ocean containers to remain longer at port or cancel sailings altogether.
- Sustainability Concerns: Climate change's impact on herb cultivation underscores the need to adopt more sustainable agricultural practices to mitigate future risk. Since most herbs are grown in native soils with traditional techniques, this makes them highly susceptible to climate fluctuations. Climate factors this year have caused people displacement in many regions, some perhaps permanently, thereby affecting growing and harvesting rhythms. With over 300 common herbs, this presents immense challenges to maintaining a consistent supply over the long-term.
These concerns have had a significant effect on Tian Hua Fen/Trichosanthes kirilowii, Long Gu/Os Draconis, Long Chi/Dens Draconis, and Hua Shi/Talcum, among others. The Chinese government has imposed quotas and export bans on these ingredients in response to sustainability challenges. Tian Hua Fen, designated as an endangered herb, has consequently been prohibited from export to safeguard its availability for the domestic market. Long Gu and Long Chi, which are derived from fossilized bones and teeth of mammals, possess finite reserves. Likewise, Hua Shi and Gan Cao have faced limitations in the form of quotas aimed at preserving local market supply. - https://www.fleetmon.com/maritime-news/2023/42449/container-ship-capsized-after-collision-ningbo-doz/
- https://www.cnbc.com/2023/08/25/ships-wait-at-asian-ports-as-retailers-struggle-to-shift-excess-stock-.html
- http://www.ce.cn/cysc/yy/hydt/202308/24/t20230824_38685160.shtml “警惕过度炒作中药材” 中国经济网 (“Beware of Over-hyping Chinese Herbal Medicines”, China Economic Network)
- https://news.cctv.com/2023/07/16/ARTIs5wo1dPDT2f8sWfIi63P230716.shtml 中药材炒成“金融产品” 谁是推手 (“Chinese medicinal herbs are speculated into "financial products". Who’s behind it?”)
- https://www.thepaper.cn/newsDetail_forward_23663139 最高涨9倍！中药材价格罕见暴涨，多地冷库已无余地 （ “Up to 9 times higher! Prices of Chinese medicinal materials have soared, and cold storage in many places has run out of room”)
- https://finance.sina.com.cn/stock/med/2023-10-03/doc-imzpuuir8028827.shtml 这味药材突然暴涨至千元，中药板块进入景气上行周期 （ ”This medicinal material suddenly skyrocketed to 1,000 yuan, and the traditional Chinese medicine sector entered a boom cycle.“)
In conclusion, this is a critical time for the TCM herbal industry, and it calls for collaborative efforts from all stakeholders to address these issues, ensure a stable herb supply chain, and promote sustainability in the face of an uncertain future. Here at Mayway, we will always strive to provide you with the most current and truthful information so that you are able to make informed decisions for you and your patients. Please be assured that we will continue to supply the finest quality herbs, with competitive pricing and transparency about these issues as we navigate this path together.
For more information regarding sustainability, please read Dr. Skye Sturgeon’s article, “Sustainability of Chinese Herbal Medicine”. We are also happy to discuss any questions or concerns you may have. Please contact Mayway's Quality Assurance Manager, Dr. Skye Sturgeon.
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