I.     Dynamic Changes in Inventory

1.    Sharp Decline Trend

At the end of 2024, the inventory of cold storage of Star Anise decreased from a peak of 82000 tons to 37000 tons, a decrease of 55%.

Mainly stimulated by the bottoming out of prices, the inventory replenishment of secondary distributors increased by 210% year-on-year, and the raw material reserve cycle of processing enterprises was compressed from 90 days to 20 days.

2.    Production Cuts Exacerbate Supply Shortages

The main production areas in Guangxi have reduced their production by 35% due to a once-in-50-year autumn drought, and the supply of high-quality goods has decreased by more than 50%.

By 2025, it is estimated that the Baise production area will reduce production by 70%, and the fruit hanging rate of native trees will plummet by 2%, further reducing the space for inventory replenishment.

II.    Current Inventory Level Assessment

Core data: As of the end of 2024, the remaining inventory in the market is about 37000 tons, which is the lowest level in recent years.

Subsequent impact: Before the launch of new products in 2025 (usually in August September), the inventory consumption rate will increase threefold year-on-year, and it is expected that the actual remaining quantity may be lower.

3.    Extended Analysis

Price correlation: The sharp decline in inventory will drive a price surge in 2025, with the price of Big Red Octagonal rising from 28 yuan/kg to 48.83 yuan/kg, reflecting an imbalance between supply and demand.

International factors: Vietnam's import dependence has exceeded a historical peak of, exacerbating domestic inventory pressure.

III.   Estimation of the Yield of Star Anise Crop 2025

The current inventory is at a historical low and difficult to alleviate in the short term.  Attention should be paid to the actual production of the new season in 2025.

The main production areas of Star Anise, such as Baise and Hechi in Guangxi, has experienced a once-in-50-year autumn drought from August to October 2024, resulting in a fruit withering rate of up to 40% for star anise trees and a production reduction of about 35%.  ‌

IV.   Summary

Given the changes in Star Anise inventory and production, it will lead to uptrend price fluctuations.

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