According to the Commodity Market Analysis System of Shengyishe, the overall market of Sanqi in 2023 has rebounded due to factors such as funds, hoarding, weather, and policies. In the first half of the year, the price of Sanchi significantly increased, with the highest price rising to 139 RMB/kg, an increase of over 51.09%; Starting from the second half of the year, the Sanqi market has been fluctuating and operating steadily. At the beginning of the year, the price of 120 units of Sanqi was 92.00 RMB/kg, and as of December 27th, the average price of Sanqi was 133.25 RMB/kg, with a year-on-year increase of 44.84%.
Due to various reasons such as natural disasters and the involvement of large households, the price skyrocketed from 50 RMB/kg to 500 RMB/kg (120 heads) from 2009 to 2010. Although the price of Sanqi (Sanchi) decreased slightly after the production of new products in 2011, the supply of goods did not recover well, and the price remained in a relatively high and volatile state. In 2012, under the catalysis of various factors such as funds and popularity, the Sanqi market surged again, exceeding 700 RMB/kg, and by 2013, it had reached the peak of 800 RMB/kg.
The sharp rise in the market has led to blind investment and planting in the production area. Around 2015, the production gradually increased to tens of thousands of tons, far exceeding the annual digestion capacity of only about 10,000 tons. Since then, the inventory of Sanqi has been heavily accumulated. Therefore, in recent years, although the price of Sanchi has fluctuated continuously, it is difficult for the price to have a significant breakthrough.
From the annual data of SunSirs over the past four years, it can be seen that the price of Sanqi in the second half of 2023 exceeded the price of the same period in the past four years. Can the price continue to rise in 2024?
The specific analysis is as follows:
From the perspective of production, in terms of the supply situation of Sanchi in China, although Sanchi is planted in some areas such as Guangxi and Anhui, over 90% of the current production of Sanchi in China still comes from Yunnan Province. Data shows that in 2023, the production of Sanchi in Yunnan was 230,234.3 tons, accounting for 99% of the total national production, while the production of Sanchi in Guangxi, Guizhou, and Sichuan regions was only 345.7 tons.
In recent years, with the low price of Sanchi, the production and planting enthusiasm of the production areas for Sanchi has been low, and the yield of Sanchi has been decreasing year by year. Data shows that the national production of Sanchi in 2023 was 23,380 tons, a decrease of 4.96% from last year and 39.34% from 2020.
From the perspective of planting area: Wenshan, Yunnan was originally the main production area of Sanchi. Due to obstacles in continuous planting of plants and the stimulation of high prices in the second round of 2009-2012, Sanchi cultivation began to shift to cities and counties such as Jianshui, Mengzi, Luxi, Mile, and Pingbian in Honghe Prefecture.
After years of production development, the production of Sanchi in Honghe Prefecture has accounted for about 50% of the total production of Sanchi, becoming the largest main production area in Xinjin. The production of Sanchi in the central and southern counties of Qujing cannot be underestimated. Although local households use their own plots of land to plant Sanchi, and there are few large contractors, the production accounts for 35%-40% of the total production in the country, making it the second largest production area for Sanchi cultivation. At present, due to historical reasons and brand effects, Wenshan's position as a distribution center and trading market for Sanchi is still irreplaceable.
From the perspective of planting area and harvesting area in Wenshan Prefecture, Yunnan Province, the overall performance in 2018 showed a continuous downward trend, with the on-site area decreasing from 25.2 in 2018 to 121,300 mu in 2021. In 2022, the on-site area of Sanchi slightly increased to 125,000 mu, but the harvesting actually decreased to 49,000 mu, a decrease of more than half compared to 2018.
From the perspective of inventory, due to overheated production in the early stage, the peak production of Sanqi exceeded 50,000 tons per year in 2015 and 2019, respectively. As of 2022, the cumulative stock of Sanchi is 53,870.09 tons, accounting for 331.75% at the end of the year.
From a demand perspective, from 2018 to 2022, Sanqi showed a slight decline in overall consumption, both on the demand side of traditional Chinese medicine and on the consumer side. Especially in 2020, due to the impact of the epidemic, the demand for Sanchi decreased significantly. According to statistics, the demand for Sanchi in 2021 was 17,240 tons, and the demand for Sanchi in 2022 was about 16,238 tons.
From a policy perspective: In June, local governments in Yunnan issued a notice on strictly prohibiting the abandonment of arable land and preventing the "non grainification" of arable land to stabilize food production, stipulating strict control over the conversion of arable land into other agricultural land such as forests, grasslands, and gardens; Resolutely stop and correct the phenomenon of "non agriculturalization" and "non grainification" of cultivated land. For cultivated land that has been "non agriculturalization" and "non grainification" and can be restored, restore the cultivation of grain crops as soon as possible, and simultaneously implement the improvement of cultivated land quality to ensure that the quality of cultivated land does not decline. Therefore, in order to ensure basic farmland and food production, or to restrict the cultivation of Sanchi.
The implementation of the new version of the pharmacopoeia has made pesticide residues and heavy metals the lifeline of Sanchi quality. Although the pharmacopoeia only proposes testing requirements for 26 prohibited pesticides, core issues such as excessive use of expanding agents in multiple production areas have not been taken seriously and resolved, thus becoming a major hidden danger to the quality of Sanchi in the future.
In summary, although the production of Sanchi has been declining year after year, coupled with the impact of land policies, the planting area of Sanchi may further decrease next year, and the reluctance of farmers to sell may increase. However, due to the large inventory of Sanchi caused by overheated production in the early stage, it may be difficult for the price of Sanchi to break through significantly next year.
But we need to pay attention to several special variables, first is the reduction of production capacity, the implementation of land policies, or extreme weather such as drought; The second is a rebound in demand, with Sanqi entering the dual-use catalog of medicine and food or being led by new leading products; The third factor is capital. According to current inventory accounting, at least 3 billion RMB of capital is needed to disrupt the market. If there are retail investors following up again, it is not ruled out that there is a possibility of doubling the price.
But if the following situations occur: first, production does not decrease, and production exceeds demand, exacerbating; The second is the serious problem of pesticide residues and heavy metals, known as "thunderstorms"; Thirdly, in the early stage, hoarders released goods on a large scale. The Sanqi market may continue to decline.
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