The current situation in the global garlic market is going very badly, according to Danny Deen of Denimpex. "The Spanish harvest of approximately 110,000 tonnes has been reduced by approximately 45% and what is still available is not of top quality. A lot of garlic has been affected by nematodes. It looks like the long-term contracts cannot be fulfilled because the long-term storage is not stable in terms of quality."
"China has had a large and good harvest in terms of quality and size, but also has a lot of demand and a lot of export to the whole world. Because the global harvests are all disappointing and there is a lot of demand from North and South America, prices are rising. Chile, Argentina and Mexico will soon reach levels that are far too high for the European market," notes Danny. "We expect that when the cold really sets in in the EU, the current stocks the importers have will run out very quickly and a shortage will arise."
Summer supplies have been sold much faster than normal and new arrivals are much more expensive from China, as freight costs have more than doubled and prices in China have already risen by about 50%. Large positions have once again been taken by local speculators in recent months and are now unwilling to sell until after the Chinese New Year, as speculators expect the price to be the same as last season. That means that there could be another 50% price increase for garlic in China. "
"At the moment there is also a big problem in terms of container availability, because there are 3.5 times as many export containers as import containers. Furthermore, the Chinese currency is deteriorating against the US dollar. In the EU we also still have the issue that garlic from outside the EU needs a quota and there is already a shortage of it, so who knows, who knows, but this season could still take a very strange turn," Danny concludes.