Garlic prices recently have been rising to an attractive level. What are the main reasons for this and will prices continue to grow in the future? First of all, since the new crop has been put into storage, the short-term supply and demand in the market has undergone a fundamental change and the market is dominated by oversupply. Historically, there’s a short period of time where prices shoot up after the crop is put into storage, and this year is no exception.
Secondly, data regarding the massive volume of this year's crop was revealed, which has had a continuous impact on the market, driving prices down continuously.
Thirdly, the purchasing season this year had several stages. In the early stage, prices were low. Later on, investors cleared their stock around the highest prices, putting prices under pressure again. Moreover, prices asked by the growers were neither high nor low, and it is unclear whether planting was reduced, so investors are having an increasing psychological burden.
At the same time, the new crop has just been put into storage, and most parties’ cost range was similar. In the coming weeks, the decline in prices is to meet with resistance from sellers, and market supply and demand will once again become relatively balanced. In the addition, in the short term, the market will fully digest the unfavorable stock and the momentum for the decline in prices will be weakened.