The new garlic harvest began to enter the Chines market in May. The price of garlic was quite high last year, and many garlic farmers therefore expanded garlic plantation. In addition, the production volume per hectare increased and the average size of the garlic bulbs is quite large. Helen of Ju'nan County Green Valley Foodstuff Co., Ltd. recently talked about current conditions in the Chinese garlic market.
"The garlic market suffered from multiple significant fluctuations in the period after Chinese Spring Festival [25 January, 2020]. There are many reasons for these fluctuations. The market has been slow and chaotic since the new harvest entered. However, in the last two days, traders with warehouses have shown more interest in buying garlic, which stimulated a slight price rise," said Helen. "The current purchase price of garlic is only around 1.3 yuan [0.18 USD] per 0.5 kg. That is much lower than the price of 3-4 yuan [0.42-0.56 USD] per 0.5 kg around this time last year.
"The main reason for this development is the large production volume this year, combined with the relatively large reserves of garlic from last season. Market supply is much larger than consumer demand, and so the price is much lower than last year. The current FOB price of Chinese garlic from Qingdao harbor is only 550 USD per shipping container," said Helen. "However, the low price also stimulates our sales volume. We received a growing number of overseas orders in the last few weeks. Our processing factories already have enough orders to keep working until the second half of June and more orders will follow."
When asked about market conditions in the last few weeks, Helen replied: "Although the outbreak of Covid-19 temporarily delayed the processing of shipping containers in major ports and reduced the number of ships, overseas market demand always remained strong and stable. The supply volume for overseas markets was relatively small in the period between February and April because processing and distribution were hindered by the Covid-19 pandemic. The export price of garlic therefore increased. In April the price suddenly dropped from around 8,000 yuan [1,129 USD] per ton, to only 2,800 yuan [395 USD] per ton. The price fell nearly 1,000 yuan [141 USD] per ton per week in this period."
"I think that the garlic price will remain stable in the next few weeks. The selling price is rather low and farmers find it difficult to make a profit. They are therefore likely to hesitate before selling garlic at this price. Traders with storage space also have to look at the market conditions before they decide to purchase fresh garlic. The price is unlikely to fluctuate much.
"Look at the recent weeks, for example, the regular margin of fluctuation is around 0.2-0.3 yuan [0.03-0.04 USD] per 0.5 kg. In the long term, I believe the garlic price will maintain a low position this year. The low price will stimulate garlic export, especially because overseas market demand remains strong."
Ju'nan County Green Valley Foodstuff Co., Ltd. cooperates with farmers in Jinxiang. Their combined farms cover a surface area of roughly 333 hectares. The garlic from these farms is mainly exported to Europe, West Africa, and South America.
For more information:
Helen Wang
Ju'nan County Green Valley Foodstuff Co., Ltd.
Tel.: +86 15666337366
E-mail: info@garlic86.com