"Chinese garlic prices still un-realistically high"

“From January until May, we received almost no overseas orders for garlic. Since June, new orders have been coming. On the domestic market, local, small to middle sized garlic traders, are still holding onto their garlic stocks. Data from the Chinese Inspection and Quarantine Services (SIQS) shows that total garlic export has gone down by 40% this year. Total production has decreased by 15% due to weather conditions, however, this does not offset the decrease in demand”.

“In a month from now, the garlic will have to be moved into cold storage. If orders are not starting to increase, it might become a problem to sell quantities this big. For the trader, it is advantageous to sell the garlic before it has to be moved into cold storage facilities, as this will save on storage costs. Garlic is now being sold at 10 Yuan per kilogram, which is extraordinarily high for this time of the year.”

“Some of the larger garlic traders have not invested in the new garlic stocks yet and they are not holding big stocks. Perhaps they did not expect prices to go up this much. The majority of the garlic is in the hands of smaller traders, who bought it directly from the farms. They are holding between 100 to 1,000 tons of garlic. These smaller traders can affect the market price. There is a risk that, if the market price starts to go down, traders will feel compelled to start selling as well, which will send the price plummeting. The larger traders have not invested yet, because they are expecting the price to come down.”

Steven Zhou and clients in Jining City

“I was told that Spanish garlic has been almost sold out in Europe. The continent will be starting to import garlic from China. We received the first orders from the UK. This year we also have a large client from Indonesia. Demand from Indonesia, and other countries with a large Muslim population including the Philippines, Bangladesh and Pakistan, will take off after the Ramadhan. I suggest to my clients, if they can move the garlic quickly in their home markets, they can continue to order. If they usually store part of the garlic, it is better to wait for a couple of weeks to see how the price will develop."

Steven Zhou
Bestway Group
www.bestwaygroup.com.cn
E-mail: stevenzhou@bestwaygroup.com.cn
Jining City, Shandong Province, P.R. China
Office: +86 537 8788989
Mobile: +86 15263788088
Skype: zhoukezhan
Whatsapp/Wechat: +86 15263788088