Overseas market demand for Chinese garlic has been in decline since December last year because of the rising shipping costs and the appreciation of the Chinese yuan. The garlic market is weak and distribution is slow. Exporters have slowed down their supply speed. Helen from Ju'nan County Green Valley Foodstuffs Co., Ltd. recently talked about current conditions in the garlic market.
According to Helen, there is a hard demand from the North American market. This market has not changed much in the last few months. The European market ordered large volumes of Chinese garlic in October and November to prepare for the holiday sales season. The large order volume combined with the ongoing pandemic caused the supply speed to slow down. Market demand weakened in December and remained weak. In contrast, the market demand from Central and South America recently grew stronger.
In addition to the general market conditions, the rising shipping cost also puts pressure on the garlic market. "The shortage of shipping containers has somewhat stabilized for short-distance shipping routes between 10-20 days, but the cost of long-distance shipping between 40-60 days is still rising at an alarming rate. This week the rate of shipping between Qingdao and Rotterdam already reached 10,000 USD per container. That is 5-6 times the usual price. The cost of shipping one container to Central and South America is around 7,000 USD, which is 2 times the usual price," said Helen.
"The overall surface area devoted to garlic plantation in the new season remains more or less the same, but weather conditions have recently changed. Extreme winter weather damaged the garlic seedlings. If these conditions continue, then the production volume will decline, which in turn may drive the price up. At that time, garlic traders may or may not be hesitant to sell their garlic, which could further increase the price of Chinese garlic. It is too early to tell how the market will develop, but the enthusiasm of farmers and traders is an important factor in this development, as is the ratio of fresh garlic stored in warehouses this season."
When asked about market prospects, Helen replied, "the garlic price recently increased because of market speculation. The current FOB price is 940 USD per ton, which is 30 USD more than last week. I expect the market to remain stable for the next few weeks until February."
For more information:
Ju'nan County Green Valley Foodstuffs Co., Ltd.
Tel.: +86 15666337366