The production capacity of licorice has been continuously reduced. What is the future market trend?

The production capacity of licorice has been continuously reduced. What is the future market trend?

1. The new situation of licorice production this year

This year, the planting volume in Gansu, Xinjiang and other production areas is still not large. According to the receivers of the production areas, from the perspective of the growth cycle of licorice, the excavated area in 2022 is planted in 2018-2019, and the total output of new products  has been reduced compared to last year.

In addition, in terms of price, the cost of licorice will inevitably increase this year due to multiple factors such as the rising price of fresh licorice, labor value and rising prices.

2. The overview of supply and demand of licorice

Licorice has the functions of invigorating the spleen, clearing heat and detoxifying, eliminating phlegm and relieving cough, relieving spasm and relieving pain, and harmonizing various medicines. The patented medicine is used in antibacterial, antiviral, liver protection and detoxification, etc. It is also widely used in veterinary medicine, food, beverage, chemical industry, tobacco, cosmetics and other fields. The annual demand is large. It is "one of the famous bulk commonly used Chinese herb in my country" . In the past few years, the output in Xinjiang, Gansu, Ningxia, and Inner Mongolia has remained relatively good, which makes the overall historical inventory of licorice really not small.

3. Reasons for prices increasing this year

The market has risen steadily this year. First, due to the impact of low prices, production has been reduced year after year, and merchants and market operators in the production area have paid more attention to it, and their popularity is strong.secondly, due to the blessing of centralized procurement, demand has increased, and sales of licorice have increased. thirdly, it has been affected by the epidemic. the processing of new goods in the place of origin is hindered, resulting in the poor arrival of goods in the market, coupled with the rigid demand in the market, the inventory has been digested to a certain extent. Therefore, Licorice ushered in a round of growth due to the common factors of the continuous reduction in planting area, inventory decline and the popularity of the product.

4. There may be room for the future market

Generally speaking, judging from the current production, storage and sales of licorice, although the price of this product has reached a new height due to the continuous reduction of planting area and the continuous reduction of new products, in the next two to three years, the supply of licorice is also estimated to be relatively limited. With the continuous consumption of supply, the future market of licorice is currently optimistic by the most merchants’ perspectives. Many merchants believe that it may still have a certain amount of the space in the future, but the amount of the space depends on the popularity and actual digestion of the market etc..