About 1.2 million people -- herdsmen, farmers, traders -- have headed for the hills in northwest China's Qinghai Province to dig caterpillar fungus.

The worm grass, known in China as "winter-worm summer-grass," is one of the most precious medical materials in traditional Chinese medicine, along with ginseng and pilos antler.

Yao Xiaobao, secretary general of the Qinghai Caterpillar Fungus Association, said each stick of the worm grass is priced between 38 and 45 yuan (6-7 U.S. dollars) this year.

The fungus forms when a parasitic fungus hijacks and then feeds off the bodies of ghost moth larvae that have burrowed into the alpine soil 3,000 to 5,000 meters above sea level. The fungus then pushes the remains of their bodies to the surface so it can spread its spores.

The mummified caterpillars are a traditional Tibetan cure-all that is believed to fight cancer and the aging process and boost the immune system.

Qinghai produces 65 percent of the country's caterpillar fungus, which can also be found in Tibet, Sichuan and Yunnan in southwest China.

In 2017, the output of caterpillar fungus in Qinghai reached 144 tonnes, earning 33 billion yuan, according to the association.

Li Shenghui, a local trader, said he used live streaming to show how his fungi were collected, which brought him a lot of online buyers.