"China: "Temporary increase of garlic price"

The garlic price in many production areas recently showed a temporary increase. This is without a doubt good news for garlic farmers, but does it mean that the price of garlic has escaped its low position?

"Every year, around the time that garlic enters storage, merchants with storage gradually increase their purchasing activities. The price of garlic increases as a result of this development. The garlic price had already reached its peak in June in previous years following the accumulation of garlic and the subsequent purchasing period. However, the garlic market has been bleak since last year and many purchasing merchants with storage suffered heavy losses. They have therefore become much more careful and calculating this year. Purchasing activity is slow and only reached its peak in late July. However, this price increase in July is only the result of a temporary increase in purchasing by merchants with storage space." This is according to Mr. Liu Bingjie, a Henan garlic farmer and retailer.

"Garlic farmers still hold the majority of garlic, but merchants are accumulating pre-ordered garlic in storage. The increased garlic volume in circulation has led to a price increase. However, the price increase is not large and will drop after this period of heightened activity comes to an end. Overall conditions are similar to last year. The main reasons for this development are as follows: first, the garlic volume is even larger this year than it was last year, while the consumption volume of fresh garlic is smaller. Second, the volume of processed garlic was smaller between April and June this year, in comparison with last year, as was the export volume. Third, purchasing merchants are more hesitant and calculating this year. There will be fewer merchants who blindly follow the trend. Apart from this, the garlic processing industry suffers from the cost of processing, high garlic prices, and environmental protection efforts."

"The beginning of autumn falls on August 7, which is also the end of the period in which merchants purchase garlic for storage. The garlic that is not properly stored by that time will start to sprout, which significantly reduces the commercial value. This deadline also limits the current price increase. Soon the overall situation where supply exceeds demand will pull the price back to its former position. Only a significant reduction of the supply volume will restore regular market conditions."

Liu Bingjie

Telephone number: +86 180 3774 6452