The World Market

The largest global markets for MAPs are China, France, Germany, Italy, Japan, Spain, the UK and the US. Japan has the highest per capita consumption of botanical medicines in the world. In the US and Europe, the trade has typically been growing at an average of 10 per cent per annum, partly because of the popularity of alternative treatments and partly because there is increasing official recognition of the benefits of traditional medical systems involving herbal preparations. The International Council for Medicinal and Aromatic Plants expects world growth during 2001 and 2002 to be approximately 8-10 per cent a year. The US has recently been an exception, with a sharp drop in sales. In 1997, the five top-selling species in the US were Echinacea, Garlic, Ginkgo, Golden seal and Saw palmetto. In 1999, the world market for herbal remedies was US$19.4 billion, with Europe in the lead (US$6.7 billion), followed by Asia (US$5.1 billion), North America (US$4.0 billion), Japan (US$2.2 billion) and the rest of the world (US$1.4 billion).

The market in China is large and shared between public and private ownership. Thirteen of the top companies producing Traditional Chinese Medicines (TCMs) are listed publicly on the domestic stock exchange. Fourteen are state-owned. China’s total output of medicinal plants from both cultivated and wild-harvested sources is 1.6 million tonnes. The total value of the finished TCM sector in 1996 was US$3.7 billion. This estimate excludes domestic consumption, the inclusion of which would result in a far higher figure. Overall sales of botanical medicine products in China in 1995 were estimated at US$5 billion. The botanical medicine market in Japan in 1996 was estimated at US$2.4 billion.

Japan has the highest per capita consumption of botanical medicines in the world, and sales have grown rapidly in recent years, in part because doctors increasingly incorporate TCM as a complement to western medicine. In 1983, 28 per cent of doctors used TCM, but by 1989 this figure had risen to 69 per cent.

India is a major exporter of raw MAPs and processed plant-based drugs. Exports of crude drugs from India in 1994-95 were valued at US$53,219 million and of essential oils US$13,250 million. Important crude drugs included Plantago ovata (psyllium), Panax spp. (ginseng), Cassia spp. (senna) and Catharanthus roseus (rosy periwinkle). Essential oils included Santalum album (sandalwood), Mentha arvensis (peppermint) and Cymbopogon flexuosus (lemongrass). Seventy-five per cent of total exports from India are sent to six countries – France, Germany, Japan, Switzerland, the UK and the US. Other major importers are Bangladesh, Pakistan and Spain.

The Market in Europe

Europe is a major world trader in MAPs. At least 2,000 MAP species are traded, of which two-thirds (1,200-1,300 species) are native to the continent. In recent years some 347 taxa are reported to have been in commercial trade in Turkey alone. The most popular botanical medicines sold in Europe in 1996 were formulated from gingko, ginseng, garlic, echinacea and evening primrose.

About a quarter of global imports of MAPs each year are into Europe. In 1992-96, imports to Europe came from more than 120 countries, with 60 per cent of material coming from outside Europe, mainly from Africa and Asia. Between 1985 and 1995, the average annual growth rate in the European market was 10 per cent, with 440,000 tonnes imported in 1996 valued at US$1.3 billion. This is now likely to have risen to well above 500,000 tonnes. Germany is the leading European importer, accounting for a third of both the total volume and the total value of European imports, with France, Italy, Spain and the UK among the other 12 leading importing countries. The 12 leading exporting countries in Europe are led by Germany, Bulgaria and Poland, with Germany accounting for a fifth of the volume and a third of the value. Germany has a large re-export trade. Between 1992 and 1996, Europe exported an average of 70,000 tonnes of MAPs annually, 20 per cent to non-European destinations, mainly North America.

Sixty per cent of exports were from just five European countries – Germany, France, Italy, Spain and the UK. Germany is the major European trader in MAPs, being the pivotal country in intra-European trade and acting as a link between markets in eastern and south-eastern Europe and those in the north and west. The German phytomedical market grew at 30 per cent between 1993 and 1995, from a value of US$2.5 billion to US$3.26 billion. The estimated growth rate in 1998-99 was 5- 10 per cent. Twenty-one companies dominate the German market.

The UK is the fourth largest market in Europe. Britain lost direct access to suppliers in eastern Europe after the fall of communism, the trade becoming directed to an even greater extent than previously through Germany. Activities are currently under way to re-establish and strengthen former trade links between the UK and eastern Europe.

UK trade restrictions differ from those of the rest of Europe. For example Bloodroot, Sanguinaria Canadensis is restricted in the UK and much of the small trade in this product is re-exported to Europe. There is very little overlap in the UK between trading systems for traditional European herbal medicines, TCMs, Ayurvedic and Unani medicines (Dennis 1998). Of the 704 medicinal plant species which have been identified as being traded in the UK, 290 species are used exclusively in TCM with only 33 “cross-over” species used both in TCM and western herbal medicine. Imports of TCM materials were reported to be worth about £3 million per annum, which is far smaller than the western herbal trade (Dennis 1998). Raw materials for Ayurvedic and Unani medicines tend to be imported directly by individual practitioners on an informal basis.

Bulgaria is the most important source country for European MAPs, with average net exports of 7,000 tonnes per annum. Sixty to seventy per cent of MAPs produced or harvested in Bulgaria are exported, mainly to wholesalers in Germany. Bulgarcoop, a cooperative enterprise instituted under the communist regime, is still the main national dealer in MAPs, even in this post-communist era. This cooperative helps growers with cultivation and guarantees to buy an agreed harvest. Since the fall of communism, 50-60 private and small companies, often family-owned, have joined the MAP trade and founded the Private Herb Exchange, which provides similar help to growers to Bulgarcoop and also organises courses for collectors. Turkey exports approximately 28,000 tonnes of MAPs annually, generating nearly US$50 million.

Structure of the trade in Europe

In Europe the trade structure is complex and dominated by a few wholesalers (Germany 21, Bulgaria 10, Albania 4). In producer countries generally, the plant material is bought from collectors and cultivators by various types of Traders, including Local Dealers, Village Cooperatives and District Traders. It is then passed on to Wholesalers, Manufacturers or directly to Retailers. The wide range of manufacturers involved can include those engaged in the production of Pharmaceuticals, Extracts, Cosmetics, Foods and Colouring agents. The number of outlets for MAPs reflects their diversity of uses. Material of a species which has entered the wholesale or manufacturing sectors may have originated from various harvesting areas within countries or it could even have been imported. This makes it very difficult to identify sources of materials and to impose quality controls.

The lengths of trade chains and the perceived need to protect information lead to a lack of transparency. A direct consequence is that those at the start of the chains (Producers and Collectors) have little idea of the market value of the MAPs which they are supplying, nor the means to discover the value added from source to end-use. In India and Nepal, some NGOs are working to make market information available to collectors in order to give them more bargaining power. The lack of transparency means that it is difficult to influence the trade easily in order to improve the sustainability of the sources of MAPs.

In former Eastern Bloc countries, the trade has changed in recent years from strictly organised, state-controlled systems based mostly on country-wide networks, to free and diversified markets with an increasing number of competing private companies. This has had significant negative effects on the sustainability and conservation of MAPs because previous quotas and controls are now largely ignored. Only Bulgaria still has a relatively well-controlled MAP trade.