Garlic is easily stored and can be stored for a long time. The price of garlic is often subject to fluctuations that stem from irregular supply and demand. Industry analysts predict that next year the retail price (not the purchase price) of garlic will exceed 8 yuan [1.12 USD] per 0.5 kg.
1. In the broader cycle of garlic price fluctuations, the second half of this year is seeing a period of price increases.
There is a pattern in the price fluctuations of garlic, a cyclical pattern. The price of Chinese garlic was high during 2016 and the first half of 2017. In May of 2017 the price suddenly dropped. Analysts expect the price to rise and reach a high point in the first half of next year around Chinese Spring Festival [25 January, 2019].
2. The overall surface area devoted to garlic plantation was small last year as was the overall production volume. The new garlic recently planted can only be harvested next year. Market supply is therefore low and the price likely to rise in the second half of this year.
The overall production volume in 2018 was small. Although the price recently increased a lot, this development was not apparent before October. The price did not show significant increases until the garlic plantation season had passed.
3. Why is the retail price of Chinese garlic only around 5-6 yuan [0.70-0.84 USD] per 0.5 kg, but the purchase price of garlic already passed 4 yuan [0.56 USD] per 0.5 kg?
The current purchase price is around 4 yuan [0.56 USD] per 0.5 kg, but after the deduction of transport costs, labor costs, and storage costs, the remaining profit margin is very small. The garlic purchased at 4 yuan per 0.5 kg is not intended for retail right now, but for retail around the Spring Festival. Garlic traders with storage facilities can find garlic easily and the cost price of storing garlic is cheaper than the cost price of storing other agricultural products. Many garlic traders therefore purchase garlic right now in the hope that the price will increase around Spring Festival time.
Source: toutiao.com