After the new peppermint oil was produced this year, the market price has been rising, starting from 70-76 yuan (kilogram price, the same below), and soared to 110-120 yuan at the end of September in just two months. Yuan. The speed and magnitude of the rise were unexpected. Why has the peppermint oil market soared? With this question in mind, we conducted a comprehensive investigation of the peppermint market for six months, trying to solve the mystery and find the answer. The survey results are now published as follows for colleagues in the pharmaceutical industry to discuss. If there are any shortcomings, I hope you will correct me.

1. The mint market has been in the doldrums for eight years

The period from the end of 1996 to the beginning of 1997 was the most glorious period of the peppermint oil market. The price of peppermint oil soared to the sky, reaching a sky-high price of 500 yuan. Affected by this, mint production has developed rapidly. Almost every household in Taihe County, Anhui Province, the main production area, grows mint. In the highest year of 1997, 280,000 acres were planted in the county, and it spread to the surrounding Haozhou, Fuyang, Linquan, and Jieshou. , Woyang, Mengcheng and other counties and cities, radiating to Henan, Hebei, Jiangsu, Jiangxi, Shaanxi, Xinjiang, the three northeastern provinces, Guangxi, Hainan and other provinces. Mint production occurs almost all over the country. The blind development of mint production eventually led to serious oversupply in the market. It is estimated that the total output of peppermint oil in the country at that time was about 30,000 tons, which was twice the total annual demand for peppermint oil in the world (the annual global demand for peppermint oil was 15,000 tons). In this way, the market price of peppermint oil declined after the new production in the second half of 1997, and the market price of peppermint oil fell again and again until the producers were severely damaged and stopped planting, thus the market entered a period of inventory consumption. Since the peppermint oil market began to decline in the second half of 1997, the peppermint oil market has been in a downturn for eight full years. The blind development of production is the main reason for the eight-year downturn in the peppermint oil market.

2. Current status of mint production

Spurred by the high price of mint oil in the market in 1997, mint production developed rapidly in 1998. The planting area of ??mint in Taihe County, Anhui Province alone reached 280,000 The total planting area in other producing areas such as Jiangsu, Shanghai, Shanxi, Hebei, and Henan is also 250,000 acres, and the total area nationwide should be 500,000 to 600,000 acres. Later, as the market for peppermint oil declined year after year, mint production also shrank year after year. By 2003, the mint planting area in Taihe County had dropped to 30,000 acres. In this year, Taihe County suffered a once-in-a-year flood, resulting in a significant drop in output, with an average yield of only 7kg. Like Taihe County, the mint planting area in other producing areas across the country has also dropped significantly. Except for small-area planting in individual producing areas, most farmers have basically given up planting, and mint production has encountered an unprecedented low. However, the peppermint oil market is still at a trough. Under the double blow of natural disasters and the market, mint production suffered another setback in 2004. In that year, the mint planting area in Taihe County, Anhui Province dropped to about 5,000 acres. According to the survey, in Taihe County, except for some plantings in towns such as Daxin Town, Hongshan Town and Jiuxian County, there are basically no plantings in other old production areas such as Niqiu, Hongshan, Fengtai, Gongji and Yuanqiang. . In other production areas across the country, except for small areas of cultivation in some places, most of them have disappeared. It is estimated that the area planted with mint nationwide this year will be up to 10,000 acres. Affected by rising food prices, farmers could not withstand the torture of the market and most turned to food production. If the peppermint oil market continues to show no improvement, mint production may become extinct next year.

3. Why mint production has shrunk year after year

Analyze mint production costs manually and compare them with grain production benefits to find out the reasons. The production cost for farmers to grow mint per mu is 669 yuan. If calculated based on current prices, it will cost more. The average yield of peppermint oil per mu is 10kg, the output value per mu is 700 yuan, and the net profit after excluding production costs is only 31 yuan, which is basically unprofitable. When farmers plant one acre of wheat, they can also plant one season of corn. Based on a yield of 400kg and 1.4 yuan per kg, the total income per mu for one season of wheat plus one season of corn is 1,120 yuan. Compared with planting mint, you can earn 420 yuan more per acre, and growing food requires less investment, yields quick results, and saves labor and time. With such an output imbalance, who is still willing to develop mint production?

IV. Market inventory and demand

According to figures provided by relevant parties: peppermint oil grew in the late 1980s and 1990s. At the beginning of the 1990s, the country's total annual demand was 3,000 tons, and was increasing at a rate of 10%. Today, the demand for peppermint oil is at least 5,000 tons. The total global demand for peppermint oil is more than 150 million tons. As peppermint oil is an important pharmaceutical and chemical raw material and is widely used in medicine, food, health care, chemical and other industries, its development efforts are increasing, and the market demand is still increasing year by year. As demand grows, social stocks of peppermint oil have been declining year after year. In 1998, the national inventory of peppermint oil was more than 60,000 tons. Later, due to the shrinkage in production over the years, the social inventory of peppermint oil gradually decreased. By August 2004, the total inventory of peppermint oil in the country had dropped to 2,000 tons. Among them, the main production area of ??Anhui Taihe is 750 tons (including surrounding counties and cities), and the total inventory of other production areas is 750 tons. The total inventory of each menthol processing factory and operating households is 500 tons. And there is a large part of the inventory that farmers and operators are unwilling to sell at the current price. It can be seen that the current inventory has reached the point where supply exceeds demand seriously.

If the market for peppermint oil fails, there will be no one to develop peppermint production, and the future market supply will be worrying.

5. Foreign trade export situation

There are three major mint producing and exporting countries in the world: China, India and Brazil. In the world peppermint oil market, the three countries are in a dominant position in the international market, each accounting for one-third of the market. However, in terms of quality and fragrance, peppermint oil produced in my country is the best. It is favored by the international market and its price is higher than that of the other two countries. In this way, the abundance of mint in the Three Kingdoms directly affects the market for peppermint oil in the international market. For example, the skyrocketing market price of peppermint oil in 1997 was a direct result of the reduced mint production due to floods in India and the reduction of mint production in my country for three consecutive years. Today, while my country's mint market has been in a long-term slump and production has shrunk severely, mint production in India and Brazil has also suffered a blow from the market. This year, Indian mint suffered another flood, and the market supply was obviously tight. This has caused my country's peppermint oil and menthol exports to show a growth trend. Recently, Japanese and Korean merchants came to my country to inspect the production and market of mint and signed a large number of orders. This has aggravated the supply shortage of peppermint oil and menthol in my country, and there are occasional out-of-stock situations, especially for menthol. This caused the price of menthol to rise. Now, the price of menthol has increased from 85,000 yuan per ton in June to 150,000 yuan in September. The increase was so large and so fast that it was unexpected. This is mainly due to the fact that the market for peppermint oil has been low in the past few years, production has shrunk severely, inventory has decreased, producers are reluctant to sell, and supply has been difficult to organize, which has affected the progress of menthol refining. Therefore, some merchants in my country have adopted the method of importing brain powder from India and then mixing it with my country's mint crude oil to refine menthol to meet market demand. This is evident from the tense situation of peppermint oil and menthol in the international market.

6. Current Market Situation

The first half of 1997 was the most glorious period in the history of the peppermint oil market. Due to strong international market demand, my country's mint production has been reduced for three consecutive years, and Indian mint has suffered Affected by factors such as floods and artificial speculation, the market price of peppermint oil has skyrocketed, from 60-70 yuan when the new production was in 1996, to 500 yuan in early 1997, and the purchase price at the origin was as high as 450 yuan. Stimulated by high prices, mint production developed rapidly, eventually leading to overproduction and a decline in the market. After the new product was produced in 1997, the price of peppermint oil dropped to 150 yuan. After that, it fell all the way to 140 yuan, 120 yuan, 100 yuan, and 80 yuan, and finally fell to a low of 60 yuan. Accompanying the decline in peppermint oil prices is the gradual shrinking of production and the gradual depletion of inventories. Finally, in 2002, the peppermint oil market began to rebound. The price increased from 60 yuan to 65 yuan. It was 65-70 yuan in 2003; it was 70-120 yuan from January to September 2004, and maintained a good upward momentum. However, this price is still low compared to growing food and other cash crops. If its price cannot continue to rise above 120 yuan, it will be difficult to mobilize the enthusiasm of producers, and mint production will continue to shrink.

7. Production and operator mentality

When the author was investigating mint production in mint-producing areas, he communicated with local growers. When asked whether to continue planting mint next year, almost everyone unanimously agreed: no. Farmers are the most practical. When faced with rising food prices, and when the income from growing one acre of food is more than 400 yuan higher than the income from growing one acre of mint, abandoning mint and growing food is the best choice for most farmers. . Years of low prices and low prices have worn away the will of producers. The vast majority of producers, while lamenting the helplessness of the market, finally chose to give up. However, there are still some people who still have high hopes for the market. They store the peppermint oil they produce in order to wait for the market to change and make a comeback. For operators, from 1997 to 2000, when mint production was booming, operators purchasing peppermint oil could be seen everywhere in market towns in various production areas. As the market for peppermint oil declined, most of these operators suffered losses or were unprofitable. As shown in the figure, most of them changed careers or found other high-level jobs. The prosperous peppermint oil trading scene in the past has disappeared. The profit margins of some of the remaining peppermint oil operators are only 1-2%. The downturn in the market tests the endurance of operators and consumes their will. These remaining operators all have a strong belief: the peppermint oil market will definitely make a comeback! The recent rise in market prices makes them excited, but the increasingly difficult supply of goods to organize makes them anxious.

8. Market trend analysis

In the six months of market research, we have gained a deeper and deeper understanding of the market prospects of peppermint oil. As the investigation deepens, it becomes more and more felt that the peppermint oil market is currently in the dark period before dawn, and the dawn is about to come. The mystery of the skyrocketing market price of peppermint oil was also solved: shrinking production, weak inventory, strong demand, and rising popularity are the fundamental reasons for the skyrocketing market price of peppermint oil.

What will be the trend of the peppermint oil market in the future? According to the survey forecast, the peppermint oil market trend is roughly as follows. Step 1: From July to October, peppermint oil is in its new production period, and its price should be between 70 and 100 yuan, an increase of 10 and 20 yuan compared with the same period last year. It is the initial stage of the market. During this period, it is important to buy chemical fertilizers due to autumn planting. Affected by other factors, the price increase will not be too large, but it has started the market. The second step: October to the Spring Festival is the price return period. The market price of peppermint oil must reach a price of 20 yuan per kg in order to realize its own value, otherwise there is a possibility of being rare or extinct.

The third step: from the Spring Festival to May next year is the period to stimulate production. During this period, its price will break through the value and move towards 120-150 yuan, because if the market price does not reach 120 yuan, it is not as good as growing grain; if it does not reach or exceed 150 yuan, it will not stimulate the enthusiasm of producers. Step 4: Move closer to the historical market peak. Comparing the current price level with the price level in 1997, we cannot rule out the possibility that the market will reach or exceed the historical high price of 500 yuan for peppermint oil in 1997. However, large funds must be involved in the speculation, otherwise this process will not be completed.

If the market price of peppermint oil does not operate according to the above route, if the market price of peppermint oil still fluctuates at a price of 100-120 yuan from October this year to April next year, it will seriously affect next year. of mint production. Maybe, next year no one will develop mint production anymore. This will pave the way for a sharp rise in peppermint oil prices next year. If so, it will become a reality for the peppermint oil market to reach or exceed the 200 yuan mark next year.

In addition, it is worth mentioning that in the upward process of the peppermint oil market, there must be a short pause at each step, and take a short rest before moving forward. This is because as the peppermint oil market advances, a portion of the peppermint oil inventory must be sold and flow in the market at each step. Only when this part of the peppermint oil is consumed by the market can its market continue to rise. Therefore, the road ahead for the peppermint oil market must be tortuous and difficult.

The peppermint oil market has recovered, and I wish you good luck!