Herbs for export: how to make money on medicinal plants
More and more entrepreneurs are interested in growing salads and greens - this is a quick and reliable way to earn money throughout the season. But even here you can find a more promising niche, for example - the cultivation of medicinal plants.
Plants such as mint, nettle, melissa, calendula, linden and many others are widely used in the production of organic cosmetics, medicine, the food industry, tourism and the spa industry. Finished products, such as aroma candles, medicines, medicinal teas and detox programs for athletes, are also gaining popularity.
Niche for small producers
The cultivation trend of medicinal plants began in Europe, where consumers have recently begun to acquire more medicinal products - from medicines to cosmetics. Moreover, the growing demand for herbs is not covered by European production, because in their cultivation the ratio of labor costs is higher than the finished product.
Suitable weather conditions, as well as fertile soils, allow Ukrainian entrepreneurs to cultivate medicinal plants with a high content of active substances, which makes domestic products more competitive in foreign markets. Moreover, the market for medicinal herbs is considered one of the most unstable due to the varying demand for many of them during the season. This gives a great advantage precisely for small farms that can supply certain types of plants in a short time.
Margin per hectare
The average cost of starting a grass business ranges from $ 80-100 thousand. The payback period for investments in their cultivation, depending on the range of crops, the availability of machinery and technology, can be from 3 to 5 years.
Promising are the prices of medicinal products, which for one plant often start from 20-30 UAH. Dried herbs on the market cost from 50 UAH / kg. In Europe, where this type of business is too expensive due to its complexity, the cost of herbs doubles. For example, the average European prices for valerian are - 2.5-3.5 euros / kg, coneflower - 5-7 euros / kg, marshmallows - 1.5-2 euros / kg. Profit depends on the properties of the plant. For example, some of them can be used completely, as in Echinacea - from roots to inflorescences and stems.
The yield of herbs in Ukraine is slightly lower than the average in Europe, due to the poor development of cultivation technologies. For example, echinacea gives 1 t / ha of dry root, valerian - 2 t / ha, marshmallow - 2-3 t / ha. The average gross income per 1 ha per year can range from $ 4 thousand to $ 12 thousand.
Technologies for export
The market for medicinal herbs is changing rapidly, so perennials are usually produced in small batches and sold abroad, where the price is higher. The growing interest of entrepreneurs in medicinal herbs is also shown by the dynamics of trade. According to the State Statistics Service, in 2017, Ukrainian entrepreneurs exported various medicinal plants for $ 7.5 million, according to the results of 2018, sales amounted to more than $ 10 million.
By the way, it makes sense to increase the volume of deliveries to Europe - the need of the European market for these products is estimated at 600 thousand tons per year. Herb cultivation requires special agricultural machinery, the key to success is quality seeds and herbicides. Organic is in great demand, but in this case, the amount of mechanical tillage, including weeding, is increasing.
Smack of success
Many Ukrainian manufacturers are more focused on foreign markets. The main thing is to comply with the quality standards adopted in the European Union. For example, the Poltava enterprise "Dobrotrav" grows various herbs up to 40 tons / year, a third of which is sold abroad - to Germany, Poland, Bulgaria. Products are shipped predominantly in large quantities every couple of months, and the most popular product is Echinacea. The company said that customers in the EU were found thanks to specialized exhibitions, such as Biofach. Another lucrative grass crop gaining production in the country is amaranth. In 2019 alone, the cultivated area under it grew 6 times - up to 4 thousand tons. The Association of Manufacturers of Amaranth and Amaranth Products notes that in the coming years the demand for medicinal plants will grow. By this time, entrepreneurs should pay more attention to marketing and finding markets, given that drying herbs takes up to 80% of the total crop production.
