In a move to ease the Yartsa Goenbub (Cordyceps Sinensis) business, the agriculture ministry has approved direct buying and selling of cordyceps, but buyers and sellers are still skeptical of the new arrangement.
Before the Covid-19 pandemic disrupted the business, cordyceps were sold through open auctions conducted by the ministry, although some preferred to sell it to direct contacts, especially middlemen.
Last week, the Department of Agricultural Marketing and Cooperatives (DAMC) announced that interested buyers and sellers could trade directly following the Standard Operating Procedure (SOP), which includes intimation and payment of the mandatory royalty at their local forestry office.
Cordyceps collectors from the four gewogs in Gasa—Khatoed, Khamoed, Laya and Lunana, couldn’t sell their collection due to the lockdown. Samdrup from Lunana, said many today feared fetching poor income from cordyceps without the auction. Cordyceps auctions for people of Khamoed and Lunana were scheduled to be held in Punakha, a few days after the lockdown was announced on August 11.
Similarly, auctions for people in Khatoed and Laya were to be held in Gasa.
Khatoed Gup Thinley Wangdi said that while people were aware that direct buying and selling of cordyceps were permitted; none of the people in Khatoed were able to sell their cordyceps. He added that collectors are concerned with the lack of buyers. In Lunana and Laya, sellers, as of yesterday have not received any calls.
In Wangdue, although cordyceps auction was conducted before the lockdown, many were unhappy with the price. Today, a few who didn’t want to sell at the auction are looking for buyers. A buyer from Nobding in Wangdue, Dorji said that like sellers, buyers were also worried about lack of market. Dorji had earlier participated in auctions in Sephu and Dangchu gewogs in Wangdue and another auction in Bumthang.
He said that he had earlier bought around 8kg of cordyceps, which couldn’t be sold. “There are no guests here. By this time last year, around 80 percent of the cordyceps we bought were sold to tourists and guides.”
According to Dorji, cordyceps prices have dropped by 40 percent in the market.
Earlier, a kilogram of cordyceps fetched between Nu 200,000 and Nu 300,000. “Today, it would sell at around Nu 100,000. Although the price is less, it is risky. I don’t know if I want to buy it,” Dorji said.
Despite the poor quality, Wangchuk from Naro in Thimphu is expecting a better price with the new arrangement. Wangchuk said direct negotiation would benefit sellers who had either withdrawn or faced losses due to low price quoted at the auctions. In the past, the best harvest from the gewog could fetch about Nu 1 million a kilogram, he said. He is expecting more in the open market.
He said that the harvest was poor this year. “We hope to communicate well to individual buyers and meet everyone’s expectations.”
The SOP states that the cordyceps business deals shall be made at the convenience of the buyers and the sellers at the place of origin and an individual holding a valid Bhutanese trade license will be allowed to purchase cordyceps from the sellers.
The parties shall pay the royalty at the respective range/park forestry office where the volume and value of cordyceps transacted shall be recorded. According to the guidelines for collection or harvesting of Ophiocordyceps Sinensis 2018, legitimate buyers pay a royalty of Nu 8,400 for a kilogram of cordyceps at the auction site.
DAMC has provided contacts of 39 buyers and the contacts of local government leaders who would facilitate the trade.
A buyer in Thimphu said that he would avoid middlemen and directly contact harvesters to avoid hiked prices. “I did not clear last year’s stock but I am taking risk this year while looking for ways to export,” he said.
Pem Dorji from Yaktsa under Tsento gewog said that he would still prefer open auction, as there were more chances of hike in price. Local leaders of three gewogs—Tsento and Doteng in Paro and Soe in Thimphu are yet to consult with the cordyceps collectors about the direct buying and selling of cordyceps.
The gewog leaders could not connect with the collectors, as they are in the highlands collecting medicinal plants.
The cordyceps auction of three gewogs scheduled in July was postponed due to limited buyers. Local leaders then submitted a letter to DAMC on July 27 proposing to the ministry to waive off the royalty and service charge of the cordyceps so that collectors can sell the fungus in the open market.
The letter mentions that the farmers were willing to sell their fungus without paying royalty and service charges, and if they fail to sell, they expect the government to buy it.
Chhokhor gup, Pema Dongyel, said that people might be willing to sell only if the price was higher than that of the four-day auction conducted in August where many sellers pulled out due to low price.
Only 10 bidders attended the auction and collectors with 4.6kg of cordyceps withdrew from the auction citing low price. The highest price offered at the auction for a kilogram was Nu 1.01 million and the lowest was Nu 41,000.
The gup said that people could preserve the harvest for two to three years and then sell when the quoted price increases.