Core Viewpoint - The article highlights a significant decline in the prices of traditional Chinese medicinal herbs, reflecting a broader downturn in the industry after a period of speculative price increases. Price Decline Overview - The price of Ziwun has dropped from 80 yuan per kilogram to 9 yuan, while the price of Cat Claw Grass has fallen from over 1,000 yuan to 66 yuan, indicating a nearly 90% decrease in prices for these herbs this year [3][4] - A total of 835 out of 1,095 monitored medicinal herb varieties have seen price declines this year, accounting for approximately 75% of the market [3] - Notable herbs with price drops exceeding 30% include Bai Zhu, Lian Qiao, Jin Yin Hua, Niu Huang, Ban Lan Gen, and Dang Gui [3] Market Dynamics - The current price drop is attributed to the aftermath of previous speculative trading, which led to overproduction and excess inventory in the market [4] - The market has experienced a panic sell-off as traders rush to liquidate stock, further driving down prices [4] - Experts suggest that the price adjustments have not yet reached a stable level, with many industry participants facing significant financial losses due to the downturn [5] Supply and Demand Factors - The supply of medicinal herbs is heavily influenced by environmental factors, making it less flexible compared to chemical raw materials [5] - The demand for medicinal herbs is driven by consumer health needs, processing into medicinal slices, and production of traditional Chinese medicine [5] - The current imbalance between excess supply and stagnant demand from downstream manufacturers is a key factor in the price decline [6] Long-term Implications - While the price drop may temporarily reduce costs for manufacturers and benefit consumers, it poses risks to the long-term stability of the industry, as low prices can harm farmers [6]