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Challenges for the Argentine garlic from Mendoza in the new season

China reduced its garlic acreage, but this won't have a strong effect on garlic prices

China is the world's largest producer and exporter of garlic. In fact, in 2020 it concentrated 70.3% of global exports, as such, fluctuations in its supply are decisive on the international price. China's low participation due to the pandemic caused the price of garlic to rise to 1.95 dollars/kg in April 2020. At the beginning of this year, China flooded the market by selling its stocks and new crops, causing the international price to drop to $ 0.62/kg.

According to the Fundación ProMendoza, in August, the Chinese garlic tends to position itself to a large extent in the Brazilian market (Mendoza's main client, as it buys 73% of its garlic). However, this didn't happen this year due to logistical complications caused by the lack of containers and the incidence of freight on the value of imports. This lower sale of Chinese garlic opens up a better panorama for Argentina's product. However, it is worth taking into account that Brazil is producing more garlic.

Taiwan is the second most important market for Mendoza's garlic (they do not trade garlic with China because that country considers Taiwan as part of its territory), accounting for 9% of sales, but this year the sale may be complicated by global logistics problems. The province also exports garlic to a lesser extent to the United States (6%), Mexico (3%), and Europe (3%).

Another option that is worth studying is linked to Chile, stated Gerardo Arribas, the head of food at ProMendoza. As a result of the drought it is experiencing, Chile is considering irrigating fruit trees over vegetable crops, as they have made a greater investment in these crops, which would lead to a decrease in its garlic production. “Chile is Mexico's main garlic supplier. If they decrease their production, Mendoza could strengthen its position in that market,” he stated.

China's influence
Every year, the agro-industrial council of the Embassy of Argentina in the People's Republic of China prepares an annual report on China's garlic market. For the 2020-2021 season, the country's total cultivated area decreased slightly (3.55%), reaching 471,333 hectares, and it harvest an estimated 8.43 million tons.

In addition, the country has nearly 1.36 million tons of garlic in stock. As a result, China's total garlic supply for this season will stand at 9.79 million tons.

"The decrease in the planted area and the consequent decrease in production this season, added to the lack of official statistical information and the higher volumes stored in cold warehouses, have reinforced speculative behavior," the experts stated.

 

Source: losandes.com.ar 


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