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Peru: Garlic producers have high expectations that the market can't meet

Last year, White Lion Foods had a very good year because garlic prices were very good, as they were much higher than the average prices in previous years, and the company sold around 70 containers worldwide. However, everyone assumed that prices would remain high and producers in several countries like Peru, Spain, or China began to produce much more garlic. Unfortunately, the bigger the production and supply, the lower the prices. This year the company expects to sell about 150 containers. To do this, the company has increased its own production by around 20% and plans to buy the rest of the product from other producers.




They are forming a team to send 150 to 200 containers, as they have customers that specialize in working with garlic and have very good distribution channels, and are even considering finding new clients. Producers are sending an average of 14 to 16 containers a month to about 10-15 customers. However, the current problem is collecting the garlic because prices are now falling in countries like China or Spain, which still doesn't affect Peru. Producers want to sell their garlic at prices similar to last year, something impossible to do as prices are coming down almost every other day. "Producers expect to get the high prices there were last year, but they will realize that this won't be possible this year."

Some suppliers in China are setting the price of a garlic box at $ 8.5, which is very low. "We, as an export company, have to focus on markets that have barriers to Chinese products, such as Brazil, Mexico, and the United States. Prices are higher in the markets that have barriers for Chinese garlic than in markets like Canada or some European countries," Byron said. 




The purple garlic season begins in August, but right now, the Chinese garlic season has also started so producers can do business with this variety. Last year they exported two containers of purple garlic to Australia and "our customer in Australia was hallucinating with purple garlic," Byron says. "The customer told us that he had never seen garlic like that before." Australia is an important market and this differentiation is key to the company. In fact, this year, they are thinking about doubling exports to this country. "Purple garlic is the key to our differentiation." 

Purple garlic does not have much competition, but there is also less product available. This variety has to be cultivated in the highlands of Peru, that is to say, at an altitude of 4,000 to 4,500 meters. They will provide aid to producers through irrigation systems or technology since agriculture is the only means of subsistence. The price of this variety is higher because of the production conditions.



They are currently trying to add value to the garlic by processing it through dehydration or freezing, turning it into slices or making garlic powder (for Mexico), as there is a growing demand for these products from Asia in countries like Japan and South Korea. This year they will begin a pilot project to diversify the uses of garlic and add value to the product. In addition, they have the support of the Peruvian Ministry of Production, which, at the end of the project, will finance a research campaign. Frozen garlic has different tariffs than fresh garlic, so it becomes a completely different product, to the point that there are some countries where producers can't export fresh garlic but can send frozen garlic. As a result, they become specific products for specific niches. 

For more information: 
Byron Machuca
White Lion Foods
Perú
T: (51) 9873 93772
E: byron@whitelionfoods.com
www.whitelionfoods.com

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