Supply volume of Chinese ginger grows, while price remains low

The Chinese ginger market experienced many fluctuations in August. The price continued to fall in comparison to July. Farmers are eager to sell their ginger, but they are hoping for better prices. However, the new ginger season is fast approaching, and some farmers are dumping their ginger. That is why the supply volume exceeds market demand, and so the price remains low. Most of the ginger in the market is of common quality. Premium ginger is difficult to find.

The surplus of ginger in southern production areas is larger than last year. In some areas farmers sell their ginger against any price, and so the average price goes down. In northern production areas the supply volume is more than sufficient, but the trade volume is small. The price there follows market fluctuations. In Yunnan there is more than enough ginger in storage. Traders with stock in storage are eager to sell. In Hunan the ginger market primarily trades medium-quality ginger. The price there is somewhat higher than in other production areas. In Anhui some ginger farmers panicked and dumped their stock, thus causing the price to drop fast.

Retail market conditions
The ginger retail market was stable in August, but not very active. Buyers purchased ginger based on current demand. The retail price of ginger followed the purchase price and slightly declined. Market demand is limited as the market is nearing saturation. In retail markets where visiting traders supplement their stock, the market conditions are regular, and the price stable, but weak.

Market prospects
The end market is not lively, and there seems to be little stimulus for the ginger market in the immediate future. Visiting traders purchase on the basis of demand. They currently show no signs of stocking up. Processing factories receive very few orders from overseas buyers, and the profit margin is extremely small at the moment. Demand is limited and the volume in reserve is larger than around this time last year. There seems to be no possibility for improvement in the immediate future. If the supply volume remains excessive in September, then the price will remain weak.

Source: My agricultural products

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