The new harvest season of Chinese ginger has officially begun. This year the overall surface area devoted to ginger plantation expanded by more than 30% compared to last year. The growth of the production volume naturally pushed the price down. The purchase price is even lower than the cost price of plantation.
Mr. Zhang is the sales director at Jining Greenstream Fruits and Vegetables Co., Ltd. He recently talked about conditions in ginger production areas: "Ginger export has been difficult because of the pandemic and many traders with stock in storage suffered financial losses. However, the purchase price of ginger was rather high in the beginning of last season, around 6 yuan [0.94 USD] per kg, and many farmers blindly expanded the surface area devoted to ginger plantation in the pursuit of profit. That is why the overall surface area devoted to ginger plantation increased. Production areas in Shandong enjoyed regular weather and did not suffer from natural disasters. The product quality of their ginger is regular. But because the overall surface area expanded, the purchase price dropped as low as 1.2 yuan [0.19 USD] per kg. The cost price of ginger is around 2 yuan [0.31 USD] per kg. Farmers everywhere are losing money."
"The current price of last year's ginger is around 2 yuan [0.31 USD]. That is only one third of the purchase price of last year. The reason that this price suddenly dropped is because there is still a lot of ginger in storage and market demand is not strong, so there are some warehouse owners who are eager to clear their storage before the new harvest enters the market," explained Mr. Zhang.
The current harvest of fresh ginger requires more than a month in storage. The current harvest will enter the market in the middle of December.
"The problems in the shipping industry slightly improved after National Day [1 October]. Cargo space is not as scarce as before, but the shipping cost still remains high. The cost price of ginger is rather low this season, which will have a positive impact on the export volume, but the shipping cost to Europe is still rather high. If the shipping cost does not come down, then the competitive position of Chinese ginger in the international market will weaken."
The overall surface area devoted to organic ginger plantation did not expand as much compared to regular ginger. Overseas market demand for organic ginger is stronger, but the overall surface area devoted to organic ginger plantation in China remains small. According to Mr. Zhang: "The plantation and export of organic ginger requires a lot of certification. Some farmers have difficulty staying within the allowed limits of pesticide residue. Many companies do not want to spend the time and the money to obtain relevant certifications. That is why the Chinese export volume of organic ginger remains small."
In addition to ginger, Jining Greenstream Fruits and Vegetables also exports pomelo, lemons, and garlic.
For more information:
Mr. Zhang Shuhan - Director of Sales
Jining Greenstream Fruit and Vegetables Co., Ltd.