(Yicai Global) Jan. 4 -- China's production of a rare fungus that is more expensive than gold is under threat amid changing climate conditions in the western Qinghai-Tibet Plateau where it is mainly found, local officials have said.

Yields of yarsagumba, a caterpillar fungus used in Chinese medicine that costs more than CNY300,000 (USD43,589) per kilogram, may shrink significantly in the future due to changes in the environment related to climate change, Guo Zengfu, director of investigations at the Qinghai unit of the National Bureau of Statistics, told China News Service.

China's average annual production of yarsagumba fell by over one-quarter to 41.2 tons between 2004 and 2018, Guo said. The country makes up the vast majority of global production of the fungus, which only grows at altitudes of 4,000 meters above sea level. Close to two-thirds of Chinese yields are found in Qinghai.

"Growing conditions for yarsagumba are extremely demanding," he said. "They have been damaged by the changing global climate and ecological environment of the Qinghai-Tibet Plateau, as well as the degradation of grassland, soil exposure, shrinking wetlands and rising snowlines."

Qinghai has formed a relatively comprehensive industrial chain related to yarsagumba after years of development, he said, adding that it is a pillar industry for the agricultural and pastoral areas and brings considerable economic and social benefits.

Editor: William Clegg