Garlic prices have been rising over the past few days, and half a kilo of garlic has now reached 7 yuan in the market. Data from the Xinfadi Market show that wholesale prices have remained at a high level over recent months, reaching 4.35 yuan on average, doubling over the same period last year.
However, the manager of the Market said that low prices last year were the result of large-scale expansion, where increased production led to slow sales, so this year's higher prices are nothing out of ordinary. Reduced production and speculation have led some stockpilers to hoard supplies, but when the sales pressure increases after Laba Festival, prices are expected to fall.
The manager said that the low prices last year were brought about by increased production, due to large-scale expansion, so the year-on-year increase is normal. Due to the overall higher purchase prices for new crops this year and the large volume of stocks left over from last year, stocks are sold at moderate prices where stockpilers will not lose money but also won’t make a profit. When sales pressure is too high in a later period, stockpilers may sell at a reduced price. This is likely to happen after the Laba Festival.
Source: Beijing Daily