China: The garlic roller coaster explained

The most hotly debated agricultural crop of the past two years was garlic. The reason for its popularity in the news is not because of some new garlic use, but because the price of garlic has been behaving like a roller coaster. This price behaviour is incomprehensible and has truly harmed consumers at times. It is as if a hidden force is influencing the garlic price, causing it to rise and fall repeatedly.

The price of large garlic went from 4 RMB to 5 RMB at the start of last year to a record-breaking 10 RMB at the end of the year. The price remained stable until April this year. People started to call it the 'garlic frenzy' and even declared that they couldn't eat garlic anymore because the price had surpassed that of pork meat. That is of course a very rare phenomenon.

After April, the new garlic entered the market. Only then did the garlic price fall back to reasonable levels. The fact that garlic shoot prices experienced a plunge into the deep, further indicated that the market situation for garlic is not good this year.

After the arrival of the new garlic, the garlic prices went back to the normal level of 4 RMB to 5 RMB. After the garlic frenzy of the year before, many farmers decided to switch to garlic cultivation. When the price halved again, the farmers who thought they would get rich from garlic got a cold shower. Without any doubt, the normal price means that profits weren't high either. Farmers became unwilling to sell as the supply on the market was still sufficient. Merchants could only depend on volumes to earn money. As a result, farmers didn't want to sell and merchants didn't want to buy.

Additionally, as the garlic cultivation season approached, there were still many garlic farmers active. The garlic price this year definitely hasn't hindered the activity of garlic farmers. In fact, it is the other way around. Some of the garlic farmers have even expanded their cultivation scale. They believe that after a low tide in the garlic pricing, a new price surge is sure to occur next year.

Source: www.bbs.tianya.cn


Publication date: 11/6/2017


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