Marketing and Export of Ginseng
OMAFRA Ginseng Series

Table of Contents

1. Introduction
2. The Impact of Supply and Demand
3. Stability of Export Markets
4. C.I.T.E.S.

Introduction

 The majority of ginseng is shipped to Hong Kong and sold in Asian markets. Buyers contact and deal with individual growers. Prices are set from year to year and may vary during any given year.

Some growers prepare and market ginseng products in North America. Capsules, teas, candies, soaps and other products are available from various grower retail outlets. These growers also offer custom services to others interested in producing value-added products.

The Impact of Supply and Demand

 The question is often asked "What is the impact of supply-and-demand on the selling price of ginseng root?" There are varying opinions on this subject. The following two graphs track the number of pounds of dried ginseng root exported since 1920 against the selling prices of root during that same time period. To compare selling prices, a consumer price index was applied. This index adjusts the selling prices so that they are recorded in comparable dollars. In other words, it removes the variability introduced by inflation. The dollars quoted for 1920 are the same in today's value as the dollars quoted in 1993. Interestingly, as exports increase, the selling price decreases. This may or may not be the effect of supply-and-demand. Root prices have not risen significantly since 1993.

Pounds of dried root exported from the U.S. between 1920 and 1993.

Selling price of U.S. root between 1920 and 1993 with consumer price index applied.

Stability of Export Markets

Market volatility has been an issue of concern for growers. The stabiity of market prices directly affects the profitability of ginseng production. The following graph looks at several export markets for Canadian ginseng root. The lines on the graph compare the swings in root prices between 1988 and 1994 at different export destinations. Note the relative stability of the Hong Kong market. Over 90% of the root exported from Canada passes through this market. While other markets are expanding, their overall market share remains small.

Selling price trands for different export destinations of Canadian root from 1988 through 1994.

C.I.T.E.S.

C.I.T.E.S. (sy-tees) stands for the Convention on International Trade in Endangered Species. It is an agreement among many nations to protect wild plant and animal life from extinction.

American ginseng (Panax quinquefolius) is listed under CITES Appendix II as an endangered (but not threatened) species. While this does not limit international trade, it does require that trade be documented. This means that before importing or exporting American ginseng, a permit must be obtained from the exporting country.

Whether or not a nation has ratified CITES, a permit or comparable documentation must be obtained.

Permits for export out of Canada are available from:

• The Administrator, C.I.T.E.S.
• Canadian Wildlife Service
• Environment Canada
• Ottawa, Ont., K1A 0H3