The Chinese garlic market is suffering from "unmarketable conditions". The price of fresh garlic this year is less than half the price of fresh garlic last year. Market supply is more than sufficient now that fresh garlic is entering the market in large volumes but the price remains low.
There are three reasons for this: First, the outbreak of Covid-19 created difficulties for the distribution of agricultural products in China. Garlic export also declined because of the Covid-19 pandemic. Second, the garlic production volume grew by 10%-20% in comparison with last year. The market conditions were not bad last year, but the overall surface area devoted to garlic plantation greatly expanded and the weather conditions were excellent this year. The production volume therefore increased a lot.
The current market conditions also occurred in 2018. Back then the price of fresh garlic was also less than 1 yuan [0.14 USD] per 0.5 kg. However, the price gradually improved and returned to regular levels. Experts in the garlic industry predict that the garlic price will improve in the next three years. When the garlic price is low, many farmers reduce the overall surface area devoted to garlic plantation. The production volume then declines and the price begins to rise. However, if the price continues to rise, the price will remain low. The price developments in the next three years will be closely tied to fluctuations in the production volume.
In the end, the market conditions of Chinese garlic are not great this year. The outbreak of Covid-19 and the increased production volume both push the price down. Later this year, as the Covid-19 pandemic hopefully improves and garlic export grows, then the price will certainly go up again.
Source: Jinri Toutiao