Chinese garlic has enjoyed bumper harvests in the last two years, and this has only become more obvious this year. International demand for Chinese garlic grows, and so the export volume of Chinese garlic steadily grows as well. The export volume this production season reached 340 thousand tons, which is an increase of 8% in comparison with the same period last year. However, conditions in the export market have not been good in the last few years. Even though the export volume was again larger this year than last year, the competition also became fiercer. The price of garlic on domestic markets is in disarray. There is very little pressure on the price of garlic, but this does not profit garlic farmers or traders. It even harms the healthy development of the garlic industry.
Indonesia, for example, has introduced new regulations for imported garlic to encourage domestic garlic production. Not only do the new regulations limit the import volume, they also require garlic suppliers to be GAP-certified and pass the Swiss certification (SGS, third-party examination organization). These new regulations were implemented in 2013 and had a profound influence on the Chinese garlic industry. The price of Chinese garlic on the domestic market dropped by 10%.
Furthermore, other countries followed with stricter regulations. There are more than 124 regulations that cover the export of Chinese garlic to countries in the European Union. Severe green trade barriers restrict Chinese garlic export and curtail its competitive power in the international market. Apart from this, the Chinese garlic industry is also subject to risks that stem from developments in the exchange rate of currencies.
Source: Chinese Morning News