The price of Chinese garlic recently showed a downward trend. Market supply mainly consists of fresh garlic from local production areas and garlic from refrigerated storage facilities in Shandong and Yunnan. There are several reasons for the price fluctuation:
1. Market supply is large. The price of fresh garlic from local production areas is 0.7-0.9 yuan [0.10-0.13 USD] per 0.5 kg. Fresh garlic was only recently harvested, which means that they still contain a lot of water, which lowers their price. Fresh garlic covers about 70% of the trade volume, while garlic from refrigerated storage makes up the remaining 30%. The price of garlic from refrigerated storage is 2-3 yuan [0.28-0.43 USD] per 0.5 kg. That price is relatively high in comparison. As the temperature rises, the supply volume of fresh garlic grows, and the price of fresh garlic drops.
2. The outbreak of Covid-19 impacted the garlic market. The overall garlic price declined and still continues this downward trend. This is because top-quality garlic is scarce, while medium-quality garlic is abundant. The scarcity of top-quality garlic pulls the average price down. This also makes suppliers reluctant to sell their stock.
The current volume of trade is not large. The price of garlic depends on the grade or product quality. Many traders in the market do not suffer a shortage of supply, but they can not purchase the garlic that meets their requirement. Some visiting traders are extremely cautious and hesitant to purchase garlic. We therefore see the average price of garlic fall.
The most important reason for the price decline, however, is the arrival of summer. The supply volume grows every day and cheap garlic dominates the market. The average price consequently declines. Furthermore, because the price recently declined, many traders are hesitant to buy large volumes of garlic. As the trade volume declines, the price falls even further.
Source: moa.gov.cn
