| Date: 04-30-2016 | HC# 041631-543 |
International Trade Centre. Sustainable Sourcing: Markets for Certified Chinese Medicinal and Aromatic Plants. Geneva, Switzerland: International Trade Centre; 2016.
China produces hundreds of medicinal and aromatic plant (MAP) materials used in traditional Chinese medicine (TCM) and consumed nationally and worldwide. TCM plant resources are declining, largely due to overharvesting to meet high demand from the TCM and herbal products industries. This report, developed jointly by the International Trade Centre Trade and Environment Programme and the TRAFFIC project, "Engaging the Private Sector in Sustainable Management of Medicinal Plants – The Multiplier Effect," with funding by the European Union-China Environmental Governance Programme, reviews the global market for sustainably wild-collected botanical ingredients, including fair trade and organic certifications and China's potential in that market. It also provides an overview of China's current export trade in both wild-collected and cultivated botanical, algal, and fungal ingredients, as well as the market segments and trends for certified ingredients. The goals of the TRAFFIC project were to establish supply chains for green industry among TCM participants, link private sector manufacturers and traders to producers for a more sustainable medicinal plant industry, benefit livelihoods, and contribute to improved environmental management of medicinal plants as a whole.
Detailed definitions for the types of botanical, algal, and fungal substances included as MAPs are provided. The inclusion criteria for the various analyses are based on whether a substance fits the MAP definitions. These are also informed by customs and trade classifications and categories of MAPs as defined by Chinese organic certification bodies. The current scope of organic certification of MAPs in China was reviewed because producers already participating in ecological sustainability standards and certification schemes such as organic were determined to be the most likely companies to value-add with other international sustainability standards and certification schemes such as Fairtrade or FairWild.
The global market situation for MAPs with fair certifications (e.g., Fair for Life, Fairtrade, or FairWild) was reported to assess the potential market for Chinese wild-collected MAPs if they became commercially available with some type of fair certification. The report explores the applicability of certain regulatory and private voluntary sustainability standards developed in consideration of managing wild-collection, such as the China Food and Drug Administration Good Agricultural Practice (GAP) for Chinese Crude Drugs, the United States Department of Agriculture (USDA) Organic Wild-crop Harvesting Practice Standard, and, in particular, the FairWild Foundation's FairWild Standard and certification system, which promotes the sustainable management and collection of wild MAPs.
China has its own GAP standards for the cultivation or wild collection of its medicinal plants. It also permits implementation of, and certification of compliance with, the USDA National Organic Program Wild-crop Harvesting Practice Standard and similar organic standards of other countries.
Although the report focuses on wild-collected MAPs, it also includes information about certification and trade of sustainably farmed MAPs. "Sustainable agriculture and sustainable wild-collection are intertwined in the marketplace, and many operations produce and trade in both cultivated and wild MAPs, sometimes of the same species," states the report. The growing market for MAPs with dual certification (organic and fair) is not differentiated by method of production (farmed or wild-collection). Fifty countries (about 26% of all countries) have certified operations producing fair-certified MAP ingredients for the export market.
Using the databases UN Comtrade and China Trade Data, the report lists the total global export volumes and values (in US dollars) for selected MAPs, plant products, algae, and fungi, compared with total volumes and values from China. In 2013, for the selected MAP articles, China exported about 1,302,441,347 kg with a reported customs value of $5,094,223,058, which equaled about 15.6% of the total global export value of $32,630,922,221. Using the more specific China Trade Data database for the included MAP articles, China exported about 1,342,456,258 kg with a reported customs value of $5,404,640,028 in 2013.
The top 2013 MAP export category was 'HS 0902' or cultivated tea (Camellia sinensis, Theaceae) leaf, with a volume of 325,806,269 kg and a value of $1,246,307,778, followed by 'HS 1211,' which includes many of China's wild-collected MAP species. [Note: HS is an abbreviation for harmonized system tariff code.] The country's top ten MAP export categories in 2013 accounted for about 67.3% of the total exported value of $5,404,622,875 for the selected MAP items included in the report.
China's main trade partners (specifically for MAP exports classified under HS code chapters 0902, 1302, 0910, 1211, and 121299) are Japan, Hong Kong, Malaysia, Bangladesh, India, Republic of Korea, and Vietnam, as well as Germany, the Netherlands, United Kingdom, and United States.
Markets for organic and fair trade products continue to increase. Chinese organic exports are steadily increasing by 5% yearly. Of the 129 certified organic Chinese MAP operations identified in this report, 88 have mainly cultivated plants, 27 have mainly wild-collected ones, 11 have wild-collected and some cultivated ones, and three have cultivated and some wild-collected plants.
Among the completely or partially wild-collected species within the top 20 certified organic species (in terms of quantity) in the country are Chinese red jujube (Ziziphus jujuba, Rhamnaceae) date, Barbary wolfberry (Lycium barbarum, Solanaceae) fruit, Chinese rhubarb (Rheum officinale, R. palmatum, and/or R. tanguticum, Polygonaceae) root and rhizome, Chinese licorice (Glycyrrhiza uralensis, Fabaceae) root, and astragalus (Astragalus membranaceus and/or A. membranaceus var. mongholicus, Fabaceae) root.
Referring to the global expansion of the use of fair-certified natural ingredients and natural products, the report says that according to Fair Trade USA, the quantity of fair trade certified herbs and spices imported by the United States increased by 23% from 2012 to 2013. Fairtrade International estimated 182% global growth for fair-certified herbs, herbal teas, and spices in 2013 compared with 2012.
At least 6% of China's MAP export volume is already certified organic and the main export destinations for Chinese MAP ingredients and products are the United States and Germany and the Netherlands (both also major markets for organic ingredients and products). As such, "It is reasonable to predict greater demand for Chinese MAPs with sustainability certifications, while taking into consideration the growing trends for linking of organic with fair."
In general, the top "additional" sustainability certification claim statement that is made for certified fair trade products is certified organic. The report estimates that 5-15% of China's total MAP exports with organic certification may have additional market opportunities if certified as organic and fair. Experts were interviewed and determined that the Chinese plants with the highest export market potential if certified organic and fair are Barbary wolfberry fruit, Chinese angelica (Angelica sinensis, Apiaceae) root, Chinese licorice root and rhizome, Chinese rhubarb, Chinese skullcap (Scutellaria baicalensis, Lamiaceae) root, cordyceps (Cordyceps sinensis,Clavicipitaceae) fungus, eleuthero (Eleutherococcus senticosus, Araliaceae) root and rhizome, Mongolian dandelion (Taraxacum mongolicum, Asteraceae) herb and root, schisandra (Schisandra chinensis or S. sphenanthera, Schisandraceae), and sea buckthorn (Hippophae rhamnoides, Elaeagnaceae) fruit.
The report cautions that China may begin to lose organic market share to other Asian countries actively involved in both the fair trade and organic subsectors, such as India, Sri Lanka, and Vietnam, if it does not increase its participation in the fair trade subsector for MAPs. India ranks number one for the highest number of operations exporting fair-certified MAPs and highest number of fair-certified MAP articles being exported. Although China is exporting some fair-certified articles (with certifications issued by non-Chinese organizations), it needs to strengthen its inspection and certification mechanisms, as currently no China-based control bodies are authorized to carry out inspections or issue certificates to producers or traders.
In general, the data found in the report indicates that demand for certified organic products continues to grow along with demand for dual certification. Consumers who were once satisfied with organic now look for organic and fair certifications. The report concludes that "enabling wild-collection operations in China to implement additional sustainability standards (such as the FairWild Standard) and achieving certification for the export market would not only help to ensure the long-term survival and sustainability of important TCM MAP species, but would bring additional household income and community investment to rural communities engaged in wild-collection of MAPs."
—Shari Henson
