The price of garlic hit a new low last year. There was a definite price increase in August, but other than that, the overall trend was far from ideal. Still, people whisper that the price may increase this year as the overall surface area devoted to garlic plantation was in decline last year.
There are several main reasons for the decline
Fewer young people are entering the garlic industry. Growing garlic is hard work that requires a lot of time and energy. There are many garlic farmers growing too old for this work but not enough young people entering the industry to replace them.
Mortgages form a great risk. Farmers who work their own land have to invest a relatively large sum of money to grow garlic. Farmers often take a mortgage on their land before they start growing garlic. When the price fluctuates, then they risk being unable to make payments. Larger farms therefore switch to crops with stable prices. This is another reason that the overall surface area devoted to garlic plantation decreased last year.
The garlic price was extremely unstable in 2018. The overall trend was downwards and in some areas garlic became unmarketable, which means that a lot of garlic was left to rot. However, data shows that there is still a lot of garlic left in storage. The surface area devoted to garlic plantation continuously declined in 2018, which means that the supply volume in 2019 will be smaller than last year, and the price is therefore likely to rise.
Still, the production areas where the surface area of garlic plantation is in decline are not the largest production areas and they do not have the greatest impact on the overall production volume. There are people who say that the production volume is only likely to significantly shrink if the surface area is in decline throughout China. Only then will the price definitely rise in 2019.
Source: Lvse Sannong Xiaobaike