Sea buckthorn (Hippophae Rhamnoides) is wildly grown in Asia and Europe and has been planted in North America since the 1930s (Davidson et al., 1994; Li and Shroeder, 1996; Rousi, 1971). Sea buckthorn grows between -43°C and +40°C (Rongsen, 1992), in areas with 400mm-600mm precipitation (Li and Shroeder, 1996).
A considerable number of products can be obtained from sea buckthorn. Li and Shroeder (1996) and Beveridge et al. (1999) report the range of sea buckthorn products. The berry of sea buckthorn provides volatile oil, juice, and pulp, which are raw materials to produce pharmaceuticals, cosmetics, drinks/beverages, food, and the residuals can be used for animal feed (Li and Shroeder, 1996). Two recently introduced sea buckthorn products are tea of sea buckthorn leaves and wine. The most valuable output of sea buckthorn is oil, which is extracted from pulp and seeds of the berry (Li and Shroeder, 1996).
Zeb (2004) discusses six types of therapeutic uses (health benefits or medicinal purposes) of sea buckthorn based on literature: anti-cancer (Mingyu, 1994; Zhang, 1989), cardiovascular therapy (Chai et al., 1989), treatment of gastric ulcers (Xing et al., 2002; Zhou, 1998), treatment of liver diseases (Gao et al., 2003; Zao et al.), treatment of skin diseases (Zhao, 1994), other benefits, e.g., balancing immune system, mitigating coronary heart diseases, and reducing fat (Zeb, 2004). These benefits make sea buckthorn an exceptionally nutritious and healthy plant.
Sea buckthorn is resistant to drought (Heinze and Fiedler, 1981; Li and Shroeder, 1996), which makes it suitable to grow in dry areas such as western Mongolia. It prevents soil erosion (Cireasa, 1986) and mitigates desertification (Biswas and Biswas, 1980), reduces water loss in the soil, increases land reclamation (Balint et al., 1989), and creates habitat for wildlife species (Pearson and Rogers, 1962).
Researchers agree that the above mentioned environmental values of sea buckthorn are thanks to its
‘extensive root system’ (Li and Shroeder, 1996). China has been planting sea buckthorn trees to successfully combat desertification since 1985 (Jianzhong et al., 2008; Li and Beveridge, 2003).
26
The literature reports that the nutraceutical food market is growing very fast. Nutraceutical food implies products that are a combination of nutritional supplement and pharmaceutical drugs. Sea buckthorn products fit into the nutraceutical food category because of their health benefits. In 1996, the nutraceutical world market was USD ($) 86 billion (Nutrition Business Journal cited by Childs, 2000), and more recently it has reached $182.6 billion in 2015 (Transparency Market Research, 2015).
There is very limited information on production of sea buckthorn, especially pertaining to the valuable berries, juice and oil; there are no statistics to be found even for sea buckthorn cosmetics and nutraceutical products. Nonetheless, markets for sea buckthorn products have been established in Asia and Europe (Storey et al., 2000). Jianzhong et al. (2008) stated that China has 2.7 million hectare of sea buckthorn cultivated land, the largest amount of sea buckthorn covered area in the world (more in Li and Beveridge, 2003). Jianzhong et al. (2008) also report that China has more than 100 sea buckthorn processing enterprises, and produces about 300 types of sea buckthorn products, with annual production reaching more than 10 billion RMB ($1.43 billion9). This is likely, because most of the suppliers of sea buckthorn products that post on international trade websites, such as alibaba.com and zauba.com, are from China. Consequently, we may safely conclude that China is the biggest sea buckthorn producer and exporter in the world.
Storey et al. (2000) attempt to estimate the size of the sea buckthorn market in North America (Canada and US), which is the only economic and market research-based study of sea buckthorn. However, estimations were based on assumptions due to lack of primary and secondary data. Storey et al. (2000) claim that there is no market data available because the market is such a small niche. He added that private enterprises may have done some market analysis and collected data confidentially. However, these companies do not share their information and data.
Storey et al. (2000) estimated the potential market of sea buckthorn products based on assumptions. For example, Canada marketed 8 million litres of sea buckthorn beverage in 1996 (assuming 1% of the beverage market share). Secondly, Hartman and New Hope (1998, cited in Storey et al., 2000, p. 21) estimate the sea buckthorn tea market size of Canada as $2.2 million for 1998, assuming that 13% of tea buying households are sea buckthorn tea consumers, one household purchases 2 times a year, and given the average tea price of $2.50 (USD). Third, they estimate the sea buckthorn seed oil in Canada to be worth $5.6 million, based on the assumption that sea buckthorn represents 1% of the market for essential fatty acid (Storey et al., 2000, p. 24). However, the price of sea buckthorn seed oil is much higher than that of flaxseed oil; thus this estimation is questionable (Storey et al., 2000)10.
The domestic and international prices of sea buckthorn are unknown and there are limited to no production statistics recorded, except at www.alibaba.com11. Companies post independently set prices for their sea buckthorn products, but it is uncertain to what extent these prices are reliable or transferable between companies and regions. Www.alibaba.com categorizes the sea buckthorn products as oil, berry and powder. As our study focuses on sea buckthorn berry, we are most interested in the prices for berry products. Berry price depends on the supplying continent, suppliers by country, whether the berries are
9 1USD=6.95RMB, we calculated annual average exchange from daily data in 2008 from web site of State Administration of Foreign Exchange of China: http://www.safe.gov.cn/wps/portal/sy/tjsj_hlzjj_inquire
10 Flaxseed oil is rich in Omega 3 fatty acid and representing market of essential fatty acid.
11 http://www.alibaba.com/products/F0/sea_buckthorn_berries/CID21301---50/1.html
27
dried or frozen, and part of a herbal or fruit extract. Some companies do not post their selling price. The variability in sea buckthorn pricing is a shortcoming creating uncertainty for analysis, because a researcher does not have a concrete source, but should rather spend time regularly keeping an eye on online prices. Additionally, the date of the offered selling price and date of advertisement is unknown.
Due to its extreme climate, fruits such as citrus, grapes and bananas cannot grow in Mongolia; instead sea buckthorn, apple, black currant and raspberry are commonly harvested. Mongolia harvested 1,412 tons of fruits, and sea buckthorn berry accounts for about 86.8% of this in 2015 (NSOM, 2016a, Appendix Figure 3). Hence, sea buckthorn berry is more than just a key fruit in Mongolia.
In Mongolia, sea buckthorn is a traditional fruit for human consumption; wild sea buckthorn has been grown for centuries in the country. With funding from the government, Oyungerel et al. (2015) studied the distribution of wild sea buckthorn in Mongolia in 2013 (Ministry of Food and Agriculture-MOFA, 2014, p. 7). Oyungerel et al. (2015) conclude that 43 forms of wild sea buckthorn cover about 13.5 thousand hectares of land in six provinces in Mongolia: Selenge, Bulgan, Zavkhan, Gobi-Altai, Khovd and Uvs.
Figure 9. The cultivated area and harvested volume of sea buckthorn berry in Mongolia
2,030
186 220
2,373 2,384
1,611
415
1,179
927 1,225
0 500 1,000 1,500 2,000 2,500
0 500 1,000 1,500 2,000 2,500
2011 2012 2013 2014 2015
Harvest (Ton) Area (Ha)
SB cultivated area (Ha) SB harvested volume (Ton) Source: National Statistical of Office of Mongolia (NSOM, 2016a)
Mongolia harvested about 1,225 tons of sea buckthorn in 2015, which is lower than the harvest of 2011 (National Statistical Office of Mongolia-NSOM, 2016a). Although cultivated area is generally increasing the trend does not seem very promising and stable as can be seen by the sharp decline in 2012 and 2013.
The NSOM (2016a) reports that Uvs province harvested 753.1 tons of sea buckthorn, which is 61.5% of the total harvest in Mongolia, in 2015. Furthermore, Ulaanbaatar city (7.9%), Selenge (6.4%), Tuv (6.1%), Bayankhongor (2.6%), Bulgan (2.6%), Zavkhan (2.3%), and Khovd (2.1%) provinces share 30%
of the total production in Mongolia (Appendix Table 9).
28
Figure 10. The annual average price and total production of sea buckthorn berry in Mongolia
Source: NSOM (2016b) Unpublished price data (a); and Authors’ estimation for production in million USD in b);
Note: The total production is estimated at harvested quantity multiplied by the national average price. The annual average exchange rate of 2012 is used for converting MNT to USD (1USD=1359.24MNT)
The domestic market price for sea buckthorn was about $3.93 per Kg in 2015 and it has been increasing since 2011 with an annual average growth rate of 5.2% (Figure 10). Mongolia’s sea buckthorn berry production was 4.8 million USD in 2015. Most of the production takes place in western Mongolia, dominated by Uvs province (Appendix Table 10).