China: Why prices increase as fresh ginger enters market in bulk?

The price of fresh ginger has been high in Chongqing this year and shows no sign of dropping. Fresh ginger currently enters the market in large volumes and the "ginger cycle" predicts that the price should go down after the overall surface area devoted to fresh ginger expanded, but the price did not fall, on the contrary, the price steadily increased this year.

Data from Agri.cn shows that the overall surface area devoted to fresh ginger plantation increased by 15% in comparison with 2017. It reached 292,733 hectare this year and set a new record. The production volume, however, showed no significant increase because of the influence of poor weather conditions. The volume of top-quality fresh ginger is limited this year, which is why the price of fresh ginger remains high.

At the same time, traders with warehouses were hesitant to purchase stock because they suffered losses on supply of ginger from refrigerated warehouses last year. They were still purchasing stocks for their warehouses by late May, but farmers were hesitant to sell. The asking price was unyielding and stock was difficult to purchase. This created a situation where supply was difficult to come by and the price remained high.

Source: cqcb.com


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