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Traditional Chinese Medicine, a new investment channel

By Song Jingli (chinadaily.com.cn)
Updated: 2010-05-14 11:29

Traditional Chinese Medicines (TCM) have been picked by speculators and their prices have been increasing since May, the China Radio reported.

Wenzhnou investors said to frequent TCM markets

"In the past 10 days, all kinds of Chinese herbal medicines have seen an increase in prices," said Jiang, a medicine dealer in Xiamen, east China's Fujian province.

Prices of some herbs, like Campanulaceae and Notopterygium have more than doubled by now, compared with prices from the end of last year, Jiang added.

Jiang has just returned from a herbs trading center in Bozhou, Anhui province and said he found many new buyers. Jiang said he believed them to be those who have exited from the property and/or stock markets.

Another herbs dealer believed there were some buyers from Wenzhou, who are well-known for their sense of business and have been in the spotlight for pushing up prices of property, garlic, and even car license plates.

A businessman, who was born in Wenzhou, Zhejiang province and is currently operating a business in Xiamen, did not comment when a Fujian Radio reporter asked if there were any Wenzhou speculators in the herbs market. He instead hinted that Wenzhou people are always sensitive to the market.

Leeches boast the biggest price gain

The prices of leeches went from 280 yuan per kilo at the end of last year to 500 yuan at the beginning of April of this year. It is currently 700 yuan at present, according to data from yt1998.com, which provides information on all kinds of TCMs.

Some insiders considered the steep price hikes to be rare; especially when fresh supply of leeches will soon be available in the market at this time of year.

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In TCM, leeches are used in dried forms. The drug is mixed with other herbs, boiled with water, and used for urinary bladder or liver treatment, or for blood circulation in women but it should not be taken by pregnant women.

Demand of TCMs given a bounce by low supply

Analysts estimated that increase in demands for TCMs coupled with a low supply makes TCMs a new channel for investment.

The output of TCMs has been negatively influenced because of low prices in previous years and bad whether conditions, making it hard for TCMs to grow.