Brazil's economic problems have not affected the demand for Mendoza's garlic. This is good news for the province that achieved increasing garlic exports to Brazil by 30% in the last cycle.
So far this sales season, from September 2015 to April this year, Mendoza has exported $106 million dollars in garlic, equivalent to 57 million kilos. Estimates are that, by the end of the season, in August, Mendoza will have exported $120 million dollars. This figure represents a 30% increase on the previous cycle.
Mendoza sells 85% of the garlic it produces to Brazil, that's why it is significant that the garlic demand has remained constant despite Brazil's political debacle and economic downturn. Demand has remained stable for two reasons. First, because this product is a staple food for Brazilians, so the demand remains constant and is very inelastic.
Second, demand has remained unchanged because the entry of Chinese garlic, which has a much lower price, so much so that even Brazilian garlic producers could not compete against it, was stopped.
As a result, producers were able to sell the box of garlic for nearly US $20 this season. In contrast, last season, the box cost US $15; a very low price that, according exporters, only allowed them to pay for cultivation and production costs.
These factors will allow garlic producers and exporters to have a very good season, summed up Guillermo San Martin, the general coordinator of the Association of Producers, Packers and Exporters of Garlic, Onion and Related Products (Asocamen).
The improvement in prices was a key factor in this cycle's performance. This occurred largely because last February the Argentine government complained about China's anti-dumping maneuvers so they could place their garlic at very low prices in the Brazilian market. This maneuvers had left the Brazilian and Argentine vendors of garlic out of the business.
Even though the increase in the export volume hasn't been very big, it sets good expectations in relation to past seasons. The planted acreage increased in the season that ended and expectations are that it will continue growing next season.
Source: diariouno.com.ar