China: Ginger market - analysis and overview

Recently, the prices of ginger have fluctuated violently. They began to rise continuously from early June, while drops and rises alternated in the previous period. Initially, prices rose at a pace of 0.005 yuan to 0.01 yuan. However, as farmers were optimistic about the market outlook, they were reluctant to sell their produce, as prices had not yet reached their expected level. Since early last week, prices of ginger have started to increase by an average of 0.02 yuan per day. Although supplies from farmers increased accordingly, the overall supply of ginger was still limited, and there were instances in the markets where people scrambled for supplies.

On June 12, the prices of Changyi ginger rose by about 0.5 yuan, and continued to rise the next day, resulting in the prices to go above the 5 yuan threshold. At this point, farmers all began to sell large volumes of their ginger, instantly subverting the earlier market situation where supplies were scares. As the volume of supplies soared, prices began to fall. On June 14th, prices in various origins dropped between 0.2 and 0.5 yuan. Supplies from farmers decreased significantly on the second day, causing prices to rise again on Sunday (June 16).

As can be seen from the above situation, farmers hold high expectations for ginger prices in the later season. When they see prices rise, they always expect prices to rise higher, but prices will eventually fall. When prices reach a high point, farmers all sell their products at a high volume, therefore, the drop in ginger prices is not that surprising. This kind of violently fluctuating market situation is not conducive to the long-term development of the ginger market.

Source: China Ginger Net




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