"China: "Garlic market dangerously chaotic"

"The garlic market has been depressed for quite some time now. Even though the price is already low, surveys show that the garlic price may drop even lower. The garlic market may become dangerously chaotic in the near future. The export market has been relatively stable for 1-2 months, in stark contrast with the domestic market. There are few changes in either export price or export volume." This is according to Mr. Liu Bingjie, Henan garlic farmer and trader.

"China has numerous garlic production areas. The current supply of fresh garlic on the market mainly comes from garlic plantations in Jinxiang, Shandong; Peizhou, Jiangsu; Qixian, Henan; Zhongmou, Henan; and Lanling, Shandong. The market prospects do not look healthy. It is estimated that the price will continue to fall until the beginning of autumn (August 31st). The market conditions have people worried. Last year, Jinxiang garlic traders suffered severe losses. They may suffer even worse losses this year, depending on what time they enter the market."

"I think that there are several important reasons for the current situation: first, the surface area devoted to garlic plantation increased by 10% between 2017 and 2018. Second, the production volume per hectare increased in comparison with last year. Third, garlic traders were unable to empty their storage in 2017. People in the garlic market are hesitant. Apart from the basic demand in domestic and foreign markets, there is no large-scale investment in the garlic industry. In addition, environmental surveys in 2017 forced several hundred thousand tons of garlic into storage. That volume would otherwise have been absorbed by the market in 2017, but now it takes up storage space. All these conditions do not bode well for the garlic market in 2018.

"Of course, even though market conditions are not great and the price remains low, there is still a great demand for garlic. There was a shortage of garlic storage space in 2016, and in 2017 there is great market demand for garlic from domestic and foreign markets. Large volumes of fresh garlic entered the trade market in late April, 2017, and immediately moved on to markets throughout China and abroad. The garlic sales volume of 2017 set a new record. The early season garlic was completely gone by the time that late-season garlic entered the market. This year, however, the price of stored garlic is much lower than the price of fresh garlic, so that there is still trade in stored garlic, but the new production volume can not be moved."