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OVERVIEW GLOBAL GINGER MARKET
In Europe and the US, there is some confusion about the situation in China and how it will be addressed. The authorities have ordered 80% of ginger plants in the Chinese ginger capital city of Anqiu to close. Given the dominant position of Chinese ginger in the world market, the effects are noticeable on a global scale. In India, another major producer, prices are rising because of several religious holidays. A third major producer, Nigeria, has seen a drop in the demand. The African country does not seem to be able to compete head to head against China and India. Brazilian growers have planted less as a result of last year's bad market conditions. The importing markets in Europe and the US are quiet in the summer months. The demand rises again when winter begins.
Less demand for ginger from Nigeria
The West African country is ranked in the top 5 of the world's largest producing countries. The sector is able to deliver fresh ginger, but the season only lasts from October to February. The current price is around $ 1,000 per tonne. Due to inflation and the economic recession in the region, prices have increased. The main markets for Nigerian ginger are the US, the United Kingdom and some Asian countries. Demand for Nigerian ginger seems to be declining. The main reason for this is direct competition from countries such as China and India. Although the country is a major producer, many markets prefer Indian or Chinese products. The most important challenge for the sector is therefore to find new destinations and take over a share of the export markets.
Closing of Chinese plants delaying exports
The ginger currently being marketed was harvested last October. According to producers in Anqiu, China's ginger capital in Shandong province, the volume this year is 5 to 10% higher than last year. Last June, prices reached around 7,000 yuan per tonne, which is 150% more expensive than in the same period a year earlier. The price rises were the result of Shandong growers going through their busiest period. Moreover, capital is being introduced in the market, which has resulted in market speculation since May. Growers become reluctant to sell as they see prices increase.
As of 13 August, most ginger companies had to temporarily close due to stricter environmental requirements imposed by Chinese authorities. At present, 80% of companies are closed and exports are delayed. In recent weeks, exports from Anqiu have fallen sharply, while prices have continued to rise. By the time the high season begins in September, these problems are expected to be over. For now, companies are still waiting for more visits from environmental inspectors.
India: Price rises due to religious celebrations
Due to the celebration of various religious festivals, ginger prices are on the rise. The harvest season is over, which means that most of the production is already on the market. The price currently stands at around 80 rupees (1.05 Euro) FOB. Although prices are rising, the market is stable. Due to the huge harvest, the warehouses are full but, because of the size of the country, the conditions in the various regions differ. Some areas are still harvesting a little. As soon as the next season begins, the price will fall. The season usually lasts from November to April or mid-May. The country exports ginger to neighbouring countries like Bangladesh, Pakistan, Nepal, Bhutan and Burma. Also in Bangladesh religious festivals are on the agenda, which will also result in price increases. Despite the floods caused by the fierce monsoon, the ginger market is expected to remain stable.
Italy discovers ginger
Until a few years ago, ginger was barely known in Italy. Thanks to cooking programs and the growing number of immigrants, ginger has become popular in Italy. The product is now available at supermarkets and retailers. At the end of August, Chinese organic ginger could be purchased in the supermarket for about 6.60 Euro per kilo. Depending on the season, the ginger root is imported from China or South America. Conventional ginger costs about 2.89 Euro per kilo in the supermarket. A wholesaler told us that they import only from Thailand or Brazil and never buy Chinese product. "Many say China is equivalent to low quality, although it's not always the case," said the trader. In the summer months, sales are low, but from October, the market recovers.
French consumer focuses on price
Peru, Brazil and Thailand used to export to France, until China took over the market about ten to fifteen years ago. China has a longer season than Brazil, which gives it an advantage. According to a trader, the quality from Brazil, Thailand and Peru is better, but consumers are not interested in the origin, only in the price. Chinese ginger is not always the cheapest, although prices can fall rapidly and then recover again. According to the importer, the Chinese bring the market price down, after which other countries must follow, and then drive prices up again. "They have done the same on the garlic market," stated an importer.
The ginger market depends on the production. As the supply increases, the market price falls. At the moment, prices should be rising, but the increase is not as high as expected. The price currently ranges between 10 and 25 Euro for 10 kilos.
The Netherlands: High ginger price: speculation or shortage?
The selling price of Chinese ginger is currently at a high level, between 17.50 and 22 Euro. In the summer, the supply is traditionally a little lower and the demand also falls due to the hot weather. Importers say they are waiting to see what will happen. The supply from China is currently very low, but it is unclear whether this is the result of speculation or of reduced shipments. The Brazilian season started just a couple of weeks ago. When it comes to prices, Brazilian ginger is normally a bit more expensive than the Chinese, but now importers expect the price of both origins to be very similar. The Brazilian season runs until September and the new Chinese ginger will be harvested in October.
According to importers, the popularity of ginger has grown considerably over the years, and many supermarkets now offer both organic and conventional ginger. Oriental dishes are becoming more popular and ginger is widely used in tea and meals. As a side effect of the growing popularity of ginger, more and more importers are entering this market. For example, after Fruit Logistica, many importers contact Chinese suppliers and carry out trials with a container. As a result, the price usually drops in April and May.
Belgium: High prices for Chinese ginger
Within 15 days, prices for Chinese ginger rose from 11 to 16 dollars per tonne, according to an importer. The price increase is the result of the Chinese government's intervention, as the authorities have closed some large ginger plants due to heavy pollution. Furthermore, there is a good demand in Europe, which means that many importers want to import more ginger. According to this trader, there has been a shortage of ginger in Europe for three weeks and it will take another one and a half months before the situation is resolved.
This week, the price in Europe reached 1.42 Euro per kilo. There are enough volumes available from China, so import prices are expected to decline in the next two weeks. In a month and a half, the new harvest season will kick off in China. From January 2018, the new harvest will become available in Europe.
Brazil plants less
Although there is around 30% less planted compared to last year, enough product is available. Last year, prices were low due to the large supply. Growers responded this year by planting less. While prices last year oscillated between 15 and 18 dollars per box, this year ginger will yield between 24 and 30 dollars per box. "At the moment, ginger costs $ 32, which is a fair price," said a trader. Between April and June, the product is exported to the US market, among other destinations. Then the ginger is still young and fragile and is therefore shipped by air. From July to November, the ginger is shipped by sea.
Peru supplying organic ginger
The new harvest of organic ginger hit the market at the end of July. Prior to the new season, the old harvest was still supplied at lower prices, but the quality of that ginger was far from ideal. Growers report mixed messages about the size of the harvest. While some say that the certified/planted acreage has been reduced, others claim that the supply remains stable. According to a trader, Peruvian ginger is also widely used in new trends, like ginger shots, which are used by consumers in Scandinavia and the US.
Israeli product at high price
The price of imported ginger is roughly twice as high as the average price. The domestic production won't be on the market until autumn. The largest share of the market is taken by imported ginger. About half of those imports come from China. Thailand and India are the other two major suppliers. Consumption in Israel is relatively low, with 300 tonnes on a yearly basis. Over the last two years, there has been a slight growth, partly driven by a greater awareness of the product's health benefits.
Israel has a growing market for healthy products and the popularity of Asian cuisine is on the rise. In both cases, ginger plays an important role. Due to the rising demand, a small domestic production has appeared. There are about 20 growers, mainly located in the central part of the country. The crop's cultivation takes place almost exclusively in greenhouses on raised beds.
Domestic ginger is considered to be of better quality because the distance to the market is smaller. Due to the large investments that growers are forced to make, prices are also rising considerably. With a price of around 20 Euro per kilo, domestic ginger is about 10 times more expensive than imports.
US: Market recovered after last year's oversupply
In addition to the supply from Brazil, there is also Peruvian ginger available. A retailer still doesn't know how the market will respond to the start of the Peruvian season. "I know that volumes from China have fallen because more than 80% of the ginger plants in Anqiu have been temporarily closed due to a violation, which could result in better market conditions this year." The trader is optimistic ahead of this year's campaign. Last year, the market was flooded with ginger, and due to the huge harvest, there were imports from new players from Brazil.
Australia produces mostly for domestic market
The country produces about 8,000 tonnes of ginger per year. The bulk of that production (60%) is intended for the domestic market, with the remaining volume going to the processing industry. The product is grown year round. Producers are mainly based in Queensland, around the Sunshine Coast and Wide Bay. The industry organization estimates the size of the sector at 32 million Australian dollars (21 million Euro) with a stable annual price.
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