Business / Industries

TCM costs rise as donkey herds dwindle

By Ju Chuanjiang and Zhao Ruixue in Jinan (China Daily) Updated: 2014-10-15 08:27

TCM costs rise as donkey herds dwindle

Dong'e Ejiao Co Ltd is applying for patents for its biological technology in China as well as in Japan, South Korea, the European Union and the United States. The company expects to sell 60 million yuan worth of its ejiao products to overseas market this year. [Provided to China Daily]

Gelatin from animals' hides used for making traditional Chinese medicine

Yu Pang, the mother of a 4-month-old baby, plans to buy an entire kilogram of ejiao (donkey-hide gelatin, a traditional Chinese medicine) as insurance against price hikes.

"I heard that the Dong'e Ejiao has raised its factory-gate price, which means retail prices will soon rise," Yu, of Jinan, capital of Shandong province, told China Daily on Thursday.

Yu's sources were right. Dong'e Ejiao Co Ltd, the largest Chinese ejiao maker by market share, announced on Sept 12 it would raise the product's factory-gate price by more than 50 percent due to shrinking supplies of donkey hide, from which ejiao is made.

It was the third time Dong'e had raised the price since last year. Last August, the company raised the price by 25 percent to 1,098 yuan ($178.70) per 500 grams, followed by a 19 percent increase to 1,298 yuan in January. TCM costs rise as donkey herds dwindle

Ejiao is credited by many with improving blood circulation and replenishing energy. Its supposed beautifying effects make it a favorite among women.

Qin Yufeng, chairman of Dong'e Ejiao, said the factory has been forced to raise prices because raw material costs keep going up.

As machinery use in agriculture widens, donkeys are seldom seen working in fields anymore, which has dampened farmers' interest in raising the animal.

But demand for ejiao has been rising by an average of 30 percent a year, Qin said. This has triggered more enterprises such as TCM giant Beijing Tongrentang Group Co Ltd, the Chongqing-based Taiji Pharmacy Group Co Ltd and Changsha-based Jiuzhitang Co Ltd to enter the ejiao market, making donkey hides even more scarce.

Currently, 49 enterprises in China have approval by the China State Food and Drug Administration to produce ejiao.

Figures from agriculture authorities suggest the number of donkeys raised by farmers dropped to 6.03 million at the end of last year, compared with 11.2 million several years ago. And the number is still dropping.

"From a long-term point of view, raising the price is good for the industry," Qin said, explaining that as the company pays higher prices for donkey hides, this will encourage more farmers to raise the animal.

Last year, Dong'e Ejiao spent 2 million yuan more on donkey hides than in 2012. At least half of the amount went directly to the donkey breeders, said Qin.

To supply its factory, the company built a donkey farm in Chifeng in the Inner Mongolia autonomous region, with the number of animals now reaching 170,000, said Qin, who said that building a second donkey farm in the region is being considered.

TCM costs rise as donkey herds dwindle
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