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China: Garlic prices up and down

Garlic prices this year have increased significantly compared with the same period last year because of much less total supply, but recent purchase prices in several major production areas have dropped slightly. Some analysts believe that prices have risen modestly in 2019, but have shown a downward trend as a whole in major production areas since the end of August, driving the garlic prices to a steady but slightly declining trend.

The main reason for the significantly higher prices is that farmers have reduced their planting acreage, leading to a relatively small supply in the market. Farmers sold their crops at below cost last year in the production season and suffered from losses, resulting in a decline in enthusiasm for plantings in the autumn. The national garlic acreage in turn decreased by an average of 25%-30% compared with the previous year.

The decline in production has made the supply and demand for garlic in China tighter starting from the beginning 2019, and has made some of the traders reluctant to sell, driving prices up. This year’s garlic market is more active, and there are now traders purchasing for stockpiling. Before the production season, a large volume of traders actively purchased goods, so prices in the production areas are significantly higher than last year.

Currently, prices for garlic produced in China are to some extent the result of manipulation. As garlic has good storage abilities, purchases are made between lengthy periods, and the market presents a marked periodicity that spans years. A part of the garlic stock in China can be stored for up to two years, so the current prices are also affected by the higher stock volume.


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