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"Export price of Chinese garlic on a downward trend"

The Chinese garlic market was quite peaceful in the two months leading up to the traditional Chinese Spring Festival [25 January, 2020]. The price of mixed-quality garlic held steady around 1,050 USD per ton.

"We originally expected the garlic price to show a slight rise after Spring Festival, but the outbreak of the corona virus disrupted regular patterns in the garlic market. The garlic processing factories were unable to package garlic for export from Spring Festival until the end of February. Domestic market demand also declined during this period. This added to the pressure on garlic storage. The growing garlic reserve combined with a shrinking consumer demand caused panic in the Chinese garlic market. Garlic traders with stock in storage vied with each other to sell their reserves. This naturally caused the price of garlic to drop. The price dropped by 300 USD per ton in a period of 20 days."

"Conditions in the garlic industry have improved in the period since the end of February until now. Many garlic processing factories have resumed business. Foreign orders for garlic are coming in. And domestic demand is gradually growing as well. The price of garlic increased by 60 USD per ton in the last 10 days. Today's price is more or less the same as yesterday. The price seems stable for now."

Regular mixed garlic: 5,900-6,200 yuan [843-886 USD] per ton

5 cm garlic: 6,600-6,800 yuan [943-972 USD] per ton

5.5 cm garlic: 7,300-7,600 yuan [1,043-1,086 USD] per ton

These are the prices for normal white garlic.

Christian Kong of Shandong Fortunate Farm Trading Co., Ltd. recently shared his view on the Chinese garlic market: "We are currently able to process orders as usual. However, the majority of the market still does not look great. The European market is alright at the moment, but other markets such as the Middle East, suffer severe consequences from the COVID-19 epidemic. The overall consumption volume is in decline. Dubai in the United Arab Emirates is an excellent example of this development. The South Asian and Southeast Asian markets have no shortage of supply either."

"Prior to Spring Festival we made an estimation that the garlic price would show a slight rise after the festival period was over and then the price would stabilize for a month or so. We expected the price to gradually come down by the end of March. We did not expect the outbreak of the corona virus and its impact on the price of Chinese garlic. We did not expect the price to fall this fast. This development has major consequences for traders with garlic in storage."

"Domestic market demand is currently growing. However, daily consumption is still only around 60% of the consumption rate around this time in previous years. The garlic reserve is quite large and fresh garlic from Yunnan already entered the market. Early-season garlic from Henan will enter the market after the first of May. The garlic reserve from 2019 is huge and the new season is rapidly approaching. These developments put great pressure on garlic in storage."

"We expect the price to drop and remain low for at least several months. We mainly focused on the Asian and Middle Eastern markets. Our supply volume is quite large. However, we are also actively developing new markets to bring our garlic to even more overseas customers. We can supply a variety of garlic products based on customer requests. For example, the European market favors 5 cm and 5.5 cm garlic, and we have more than enough supply."

"Market management is of crucial importance for garlic traders. We have to understand how the consumer market works, but it is even more important to understand conditions in garlic production areas. We hope to connect with even more garlic traders from across the globe to exchange information and discuss the future of the garlic industry. Together we can create a sustainable development of the garlic industry."

For more information:

Christian Kong

Shandong Fortunate Farm Trading Co., Ltd

Tel.: +86 15069720600 

WhatsApp: 0086 15069720600 

E-mail: info@fortunatefarm.net 


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