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China: Big fall in wholesale price of garlic

Since newly-cropped garlic entered the market in May, the prices have been low. In early September, the average price was around 18.38 yuan in green produce markets in Guangzhou, which was 9% lower than the average of 20.25 yuan in January. However, in the wholesale market, the decrease in prices has even reached 50% compared to January.

According to industry experts, there has been a vicious circle around garlic production since 2006, in which higher market prices drive growers to increase their production which in turn reduces the prices and forces the growers to lower their production and then the same cycle starts again. This was mainly due to the lack of market information among garlic growers. Different from normal green produce, garlic can be stored in the warehouse for a year or two. Thus, big wholesalers and traders can monitor and "control" market demand for it by stocking up when prices are relatively low.

Last year the prices went up greatly, so growers increased their production area. This year the weather has been ideal for the growth of garlic, so the crop increased and caused the price to fall.


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