Shipping costs have massively increased in recent months as the exchange rate of the Chinese yuan has grown. Under these conditions, overseas market demand for Chinese garlic and onions has shown a decline. Chinese exporters have had to slow down business. Manager Wang Junjie, spokesperson for Jining Shangzhuo Food Co., Ltd., recently talked about current conditions in the Chinese garlic and onion markets.
According to manager Wang, "the export volume of Chinese ginger has grown since fresh ginger entered the market, though market conditions have recently stabilized. However, European garlic reserves are running low, so they are gradually expanding their import volume.
European buyers imported large volumes of Chinese garlic in July and August. However, as a result of the Covid-19 pandemic, restaurants closed and market demand declined. The supply speed slowed down. The garlic reserves in warehouses is sufficient for another two months. That is why we predict that the market conditions will remain stable for another two months. The export price and trade volume will not show significant fluctuations. The current FOB price of Chinese garlic (#5.5, 10 kg) is around 1,200 USD."
In addition to garlic, Shangzhuo Food also sells onions. "The onion price is extremely high this year. India implemented an onion export prohibition to protect the domestic market. Many nearby countries shifted to China instead. Furthermore, the shipping cost has skyrocketed due to a shortage of shipping containers as well as the general impact of the Covid-19 pandemic on port operations. The cost price of shipping has increased exponentially," said manager Wang.
"This has had a direct impact on the export price of onions, which has gone up by 62 USD per ton. We used to export our onions to Southeast Asia charging CIF prices, but like many companies, we are unable to take the risk, so we have changed to FOB prices. On top of that, the value of the Chinese yuan has gone up. As a result, the volume of orders we received has gone down. The FOB price of peeled onions is now around 400 USD per ton, which is 100 USD per ton more than around this time last year."
Jining Shangzhuo Food is specialized in the export of garlic, ginger, and onions. The company exports more than 2,000 shipping containers per year.
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Jining Shangzhuo Food Co., Ltd.