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Price of Yunnan ginger 'cut in half'

Purchase price of Chinese ginger dropped by 90% compared to last year

The price of Chinese ginger soared last year. The retail price reached 35 yuan [5.48 USD] per kg. And that was during a year of abundant harvests. This year, however, the price of Yunnan ginger was 'cut in half' as soon as the ginger entered the market. The price dropped to the lowest point in nearly 10 years. How did that happen? And while the purchase price and wholesale price took a dive, the retail price in Kunming market remained more or less the same.

Conditions: Ginger wholesale price 'took a dive', but retail price remained strong
One ginger farmer in Yunnan explained that the purchase price suddenly dropped by almost 90% compared to the same period last year. And the wholesale price of last season's ginger from warehouses in Kunming significantly dropped as well.

The wholesale price is extremely low, but what effect did it have on the retail price in Kunming markets? Ginger prices in supermarkets must be lower than in farmer's markets, especially in large-scale chain stores. According to one supermarket employee, the ]lack of intermediaries saves on the cost price, but other aspects play an important part as well. Supermarkets generally enjoy a stable and sufficient supply that manages to satisfy market demand. That is why their prices do not suddenly rise.

Farmer: Low prices reduce willingness to sell
People in the industry state that the rapid decline of the wholesale ginger price is due to low purchase prices as well as the small purchase volume. Only a handful of wholesale traders are willing to visit production areas and they only purchase small volumes. Farmers consider the purchase price of ginger too low. They have to consider the costs they make and are unwilling to sell when the price is too low. Some even consider leaving the ginger in the ground until the market improves.

Trader: When supply exceeds demand, the price goes down
The price of ginger is lower than in previous years because many production areas experienced a level of rainfall that was perfectly suitable for the growth of ginger. Moreover, last year the production volume was huge and the market conditions great, so the number of farmers interested in ginger plantation expanded.

One trader added that market supply exceeds market demand now that various production areas in Yunnan begin to supply the market one after the other. And when supply exceeds demand, the price naturally drops. In addition, the ginger export volume is rather small this year. Many regular overseas clients canceled their orders. That further pushes the ginger price down.

Source: Kaiping News Client


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