Many Chinese agricultural products are facing a difficult export market because of the appreciation of the Chinese yuan and the rising shipping cost. Mr. Wang Junjie, the retail manager at Jining Shangzhuo Food Co., Ltd., recently talked about current conditions in the export market for Chinese garlic and onions.
The garlic export season has already begun. China enjoyed an abundant harvest this year. The production volume and product quality are both ideal. And the size of garlic is rather big this year. 4.5#-5.0# garlic accounts for around 20% of the production volume.
When asked about market predictions for the next few weeks, manager Wang replied: "The price of Chinese garlic will likely remain high in June and July. There is a lot of speculation in the Chinese garlic market, and the shipping cost shows no sign of coming down, which makes it difficult to predict how the rest of the season will unfold."
Manager Wang also added a comment on the rising shipping cost. "The shipping cost for the route between Qingdao and Europe is now around 8,500-9,000 USD per container. That is around 360-400 USD per ton of garlic and the price is still rising. In addition, there is a serious problem with delays in port. Delivery speed has slowed down because there is a shortage of labor force in ports. The backlog in ports leads to delays, in some cases the products arrive 10-15 days later than planned."
As for the onion market, the price of peeled onions is around 600 USD per ton. That is nearly 200 USD per ton more than around this time last year. "There are three reasons for the high onion price. First, the overall surface area devoted to onion plantation decreased this year. In addition, domestic market demand grew stronger and the ratio of domestic sales has gone up. Second, the product quality of onions is substandard this season. The percentage of onions suitable for export is lower than usual. This pushes the price of top-quality onions even higher. And third, not only are the onions expensive, and is the shipping cost huge, but the recent appreciation of the Chinese yuan further weakened the interest of overseas buyers in Chinese onions. All of these factors work together to create a difficult market for Chinese onions. There is barely any demand from overseas markets and the order volumes are small," said manager Wang.
"We currently only sell #35-50 onions for the export market. The export price is 550 USD per ton. That is higher than around this time last year. The onions whose appearance is less than ideal are often processed into diced, frozen onion. The fluctuations in the market for diced, frozen onions are small because the shelf-life of this product is very long. Some importers who purchase for restaurants have recently switched to frozen onions because fresh onions are too expensive."
Jining Shangzhuo Food specializes in the export of garlic, ginger, and onions. The company has an annual export volume of more than 2,000 shipping containers.
For more information:
Mr. Wang Junjie - Retail manager
Jining Shangzhuo Food Co., Ltd.