There are 2 categories of herbal trade practiced in Malaysia. The more prominent business is the entreport trade, while the lesser activities are in the supply of raw materials or herbal product businesses. In the case of the entreport trade, the raw materials or products obtained from different origins are repacked or concocted into new products for sale locally or in third world countries. Many local suppliers of raw materials or products usually export their merchandise on order.
Some popular local herbal products, including those from different countries of origin which are exported from Malaysia are Tongkat Ali, Kacip Fatimah, Misai Kucing, Noni juice, Agarwood oil and Herbal Tea. With more entrepreneurs delving in herbal trade, there are potentials for local raw materials to find new uses in the manufacturing industry.
It has been reported that Malaysia has an estimate of about 1300 plant species having medicinal values. Of these about 200 are being used as herbal remedies and approximately 50 species are commonly used in traditional medicine preparations. Herbal products, besides being used as ingredients for herbal medicines, they have also found applications in the cosmetic, dietetic, alcoholic and soft-drinks industries. The herbal ingredients usage stemmed out from plant extracts as well as in the form of their active ingredients.
Notable markets for Malaysian herbal produces are the USA, Europe, Japan, China and the Middle East countries. Demand for essential oils, turpentine and phyto-chemicals are influenced by the availability of raw material supplies. In the flavor and fragrance market, the plants’ parts such as stems, branches, leaves, barks, fruits, flowers, bud and roots are utilized.
Known international markets for herbal products may be classified into the following categories:
- Flavor and Fragrance Compositions
- Essential Oils and Natural Extracts
- Aroma Chemicals
Markets for different categories have different requirements. The categories are sourced from extracts, raw materials or from manufactured products. Market requirements necessitate carbon cycle records, industry standards and official endorsement. For US commercial markets, plant extracts are used in the food and fragrance industries, while in the pharmaceutical industry, the extracts are for flavorings and palatability. The market requires ultra-clean, verifiable, high quality products, reliable suppliers and competitive prices.
Low-cost suppliers such as from India and People’s Republic of China (PRC), pose serious problem of profitability to Malaysian herbal traders when trading internationally due to their competitive pricing. Europe constitutes a large segment of the market whilst the USA and Japan are trailing behind. PRC and the former Soviet Union or Eastern Europe may likely influence the supply and demand of herbal materials due to their pursuit for hard currency.
When dealing with the international markets, it is necessary to consider the existence of synthetic compound in relation to natural products. in which case there will be product adulteration especially when the price of synthetic substitutes is less than that of natural products.