Sharp price gap of Bezoar:￥600,000 in China, waste in Pakistan
By Meng Lingjuan
If China has a demand for anti-pandemic resources, Pakistan may have “inventory”, what the result would be?
By the end of the 3rd quarter, China's total volume of trade in goods turned positive for the first time in 2020, according to the release from the National Bureau of Statistics in China this week. Relying on the special access to rice, sugar and other commodities from China, Pakistan’s exports to China reached $1.86 billion in the fiscal year 2018-2019. And in the upgraded FTA between the two countries, China gives Pakistan zero tariff on 313 items. Both sides have high expectations and are looking forward to the further rise of Pakistan's exports to China. However, affected by COVID-19, the figure fell to $1.66 billion in the fiscal year 2019-2020 by 10.8%.
Saffron and Bezoar in Pakistan Famous-region Medical Materials
bezoar, picture from internet in China
The high-level political relation between China and Pakistan are reflected in the economic and trade agreements. China has signed FTA with 16 countries and regions. With Pakistan only, there are 3 versions. According to the reporter's preliminary calculation, there are dozens of zero-tariff items of raw materials in traditional medicine. With the preferential western medicine items in the agreement of the early harvest programme in 2005, the total is nearly 100. In the catalogue of non-first-time imported medicinal materials revised and merged by the National Medical Products Administration in China, only 4 kinds are from Pakistan, including pericarpium arecae, betel nut, radix glycyrrhizin and semen nigellae. Why is there such a difference between the actual imports of Pakistan and the preferential items in the FTA?
"Capillary Wormwood can be medicine in March, whereas grass in April," Zhu Hongli, head of cross-border pharmaceutical e-commerce in Zhongdamen Network Technology Co., Ltd. in Henan province, talked about the necessity of famous-region medicinal materials while answering the reporter's question. “Soil, climate, processing methods, etc., will affect the degree of famous-region of traditional Chinese medicinal materials. For example, there is a gap between famous-region pharmacies and ordinary ones in Henan, and the price difference could be 1/3, " Zhu said.
Zhu Hongli, graduated from Henan University of Chinese Medicine, was one of the earliest to enter traditional Chinese medicine e-commerce business in China. Henan Bonded Group, its parent company, is the first cross-border e-commerce pilot entity in China to import medicinal products and equipment. “Among all the products we have access to now, those from the 'Belt and Road Initiative countries’ are increasing, such as the origin of saffron is Persia, and saffron in Iran is famous-region medical materials. The price of it domestically is RMB 20,000 per kg, whereas is only RMB 5,000 or 6,000 per kg for imports. The saffron introduced in Shanghai costs high, although the quality is better, the profit is not satisfying. Thus 90% relies on imports nowadays. "
"Pakistan also has its famous-region medicinal materials," Yu Zhibin, the director of TCM Department of CCCMHPIE(China Chamber of Commerce of Medicines & Health Products Importers & Exporters), told the reporter, " saffron is also called crocus sativus. Many of them are imported from Iran and Pakistan, and they all belong to famous-region areas. Recently, we are willing to promote the import of bezoar from Brazil, but the procedures are complicated. Is it possible to take the lead in breaking through the import of bezoar in friendly countries like 'Patie'? "
Bezoar regarded as “Soft Gold” in China
Bezoar refers to dry gallstones of buffaloes and cattles. As indicated in current Chinese Pharmacopoeia as Bovis Calculus, it was described as a spheroid, 6mm to 5cm in diameter. It is usually a yellowish-red to brown-orange in color, with golden cross-section. Concentric-cylindrical lines might be discovered in bezoar, some of which are white in center. “The stock of bezoar is not enough in the last two years. Underground smuggling has been carried out. The discounted price of bezoar is 600,000 RMB per kilogram nowadays.” said by Zhibin Yu.
What caused the stock shortage of bezoar? According to China’s Beef Industrial Analysis Report, due to the impact of African swine fever, the demand for beef cattle has increased in China recently while the growing feeding cost has led to the decrease of cattle stock, resulting in high price of beef. As shown by the data from Ministry of Agriculture and Rural Affairs in China, the average price of beef in China’s market was 73.2 RMB per kilogram in 2019 with a year-on-year increase of 12.26%, and the annual volume of import was 1.66 million tons with a year-on-year growth of 59.7%. In the first three quarters of this year newly revealed by the Customs, the volume of import has reached 1.572 million tons, close to the total of last year.
“High demand of beef brings out early killing of cattle before they might grow bezoars”, a chief representative abroad of a Chinese enterprise told the reporter, “Nowadays, in China some cattle feed on grain, but only when cattle feed on grass can they produce bezoars. I have read some materials, in which a research institute found out that almost three out of one thousand cattle could produce bezoars with X-ray Imaging, even though the weight was not sure. China is an aging society right now with more demands for medicine of cardiovascular diseases, for example, Angong Niuhuang Wan (Bolus of Bezoar for Resuscitation), is also used against COVID-19 now. With less supply and more demand, the price of bezoar will certainly rise, that’s why we call it ‘soft gold’".
Angong Niuhuang Wan mentioned by this insider has been included in trial Diagnosis and Treatment Protocol for Novel Coronavirus Pneumonia released by National Health Commission & State Administration of Traditional Chinese Medicine from Jan 22, 2020 for acute and severe diseases like dizziness, breathlessness or auxiliary ventilation. According to List of Drugs Including Bezoars for Clinical Acute and Sever Diseases in National Drug Standard Prescription, bezoars are mainly included in 42 kinds of traditional Chinese medicines like well-known Pien-Tze-Huang, Dahuoluo Wan, besides Angong Niuhuang Wan.
No one look at the presence of bezoar in Pakistan
on Jan 4, 2020, the reporter from China Economic Net interviews the factory of FML in Karachi, Pakistan. Photo by Zhang Peng
Fauji Meat Limited(FML) is one of the leading meat processing enterprises in Pakistan. Yili Group in China considered acquiring its affiliated company Fauji Foods Limited(FFL) in 2018. In an interview in FML’s plant in Karachi in early January this year, the reporter used the expression "Gallstone In Beef" to ask Abdul Rehmen, the former brigadier and the head of HR of FAUJI Fertilizer Bin Qasim Limited（FFBL）, the parent company of FML. Having no idea of what the reporter had referred to at first, Rehmen said after hearing the term Gallbladder, "It seems that somebody once asked for gallbladders."
Recently, Mohammed Mustafa Kaman, the chairman of Big Bird Group in Pakistan and a DVM, has expressed similar view in a written interview with the reporter. " No one has looked at the presence of bezoar in Pakistan. At abattoirs hardly anyone looks for the presence of bezoar. However, a few workers do understand its unique wroth. In a few slaughter houses workers do gather gallbladder secretions based on its demand. Pakistan is at stage 2nd in FMD control standards and there is a significant decrease in incidences of FMD. We may need to note down the prevalence of bezoar at slaughtering which needs a survey and monitoring."
It is reported that China and Pakistan signed the Foot-and-Mouth Disease Free Zone Agreement last year. Pakistan will transfer from the second phase of the free zone to the third phase to control and eliminate FMD through vaccination with China’s technical support. Before the COVID-19 pandemic, the joint-secretary of the Ministry of National Food Security & Research of Pakistan Javed Humayun said in an interview: “The FMD free zone under PakChina cooperation is expected to be completed next year.” The data from the State Bank of Pakistan shows that Pakistan’s fresh or chilled meat of bovine animals exports to China in the fiscal year 2018-2019 are only $15,000 and $47,000 in 2019-2020.
The 3 products mentioned above bezoar, bile and beef, according to the reporter's review of the China-Pakistan Free Trade Agreement(CPFTA), the HS code of bezoar was first listed in the annex to CPFTA signed on November 24, 2006—— Products List Of Tariff Reduced to Zero Within Three Years. And what is added in the upgraded CPFTA "China Zero Tariff Schedule" is just "fresh or chilled beef" and "bile, glands used in the preparation of pharmaceutical products" .
For further proof, in a recent interview with the Commercial Counselor of Pakistan Embassy in China Badar U Zaman, the reporter cited HS code of bezoar and bile and the number of cattle inventory in China last year 91.38 million. “Pakistan’s cattle inventory is about the same as China’s, or even slightly larger. We didn’t know about bezoar before, but since the second half of last year, it seems that a Chinese has begun to contact the Pakistan Beef Association. As far as I know, Brazil is now the largest exporter of bezoar with exports of $78 million, followed by China, the United States, Colombia and Russia. The biggest buyer for bezoar is China and then South Korea."
Health Corridor to find opportunities and revive economy
A traditional medicine communication meeting among China, South Korea and Pakistan, was held by CEN in Seoul in November last year. A PakChina Trade Hotline Cloud Salon, themed “Joint Contribution to Health Corridor”, will be held on the 28th of this month, which aims to promote health cooperation between China and Pakistan and to find opportunities in reviving the economy.
" Chinese herbal medicine materials have more than 12,000 kinds, but only 200 to 400 are frequently used.. It is not jack of all trades and only could be a master of one kind. As for the Angelica Town in Gansu Province, the wolfberry in Zhongning of Ningxia Province, and ginseng in Heilongjiang Province, one kind can be a lifelong business,” speaking of traditional medicine business opportunities, Zhu Hongli also mentioned South Korean red ginseng, “only this one kind operates properly, it has been sold very well in China during the pandemic.”
At the beginning of this year in Pakistan, the reporter from China Economic Net interviews Mehran Biogel Industries, a JV invested by Chinese and Pakistani.
"Some TCM knowhow, listed as the Intangible Cultural Heritage, are treasures of the Chinese nation, however, the inheritance of these knowhow may gradually shrink for the lack of raw materials," the chief representative abroad of the above-mentioned domestic enterprise said, "Is it possible to handle special cases with special methods, such as taking bezoar and beef into consideration together in Pakistan? And could it be possible to provide special support based on the concept of following the ancient prescriptions?"
"The Customs is most worried about the entry of plagues and pest diseases, so we must control the potential risks before the entry," Yu Zhibin pointed out, "but too strict restrictions can only lead to smuggling instead of ensuring the quality and safety of medicines. It’s better to open channels and let people do it legally and up to the standard."
"China puts Chinese and Western medicines in equal status, while in Europe, the United States, including Pakistan, the traditional medicine is in the subordinate status. TCM currently is not in line with the mainstream foreign markets." Yu Zhibin said, "Now import is a major trend. The development of TCM, especially under the call of President Xi, will have a great future. We need overseas resources, and foreign countries are willing to export resources as well. TCM needs its own channels to go global, but now we rely on the channels of overseas Chinese and old Chinese businessmen, which is not mainstream at all."
"TCM should be strong enough. No country in the world has a broader market for TCM than China. Opening is mutual and we should have enough confidence. Only by opening-up, could we be qualified to negotiate. From the perspective of ‘going out’, we must first unlash the ‘bringing in’ market," Yu Zhibin said, "selling products is the preliminary phase of globalization and the re-allocation of resources is our goal."
（Editor:Guo Caiping）
