China: Garlic prices fall after Spring Festival

The general consensus is that prices for all agricultural products will fall after the Spring festival. Yes, even in the soaring garlic market. This week the average price for garlic was 6.32 yuan per kilogram, a drop of 7% from the same time last month. All last year garlic seemed to be ramping up continuously which pulled related agricultural products along for the ride. Will this month's declining price signal a return to sanity in 2017?

In early January, garlic's price at origin stood at 6.8 yuan/kg. During the Spring Festival, that saw a slight drop to 6.78 yuan per kg, at the start of the holiday, to a steeper fall, down to 6.16 yuan per kg, by the end. After the Festival, trading returned to normal and consumption levels hit a new high. Garlic prices rebounded briefly but could not resist the general trend of price decline.

This year the new garlic will continue to be listed after March and the overall market is expected to be higher than last year. China had about 900,000 tons of garlic in reserve, before the listing of fresh garlic. The existing inventory is already proving difficult to digest completely, so the outlook suggests that the garlic price decline may be unstoppable.