China: Exports of garlic pick up

Since late November 2021, the price of garlic in the warehouse has  declined unilaterally, reaching a low price of 3.92 RMB/kg on January 9, 2022, and consumer sentiment in the garlic market has been severely hit. However, when the Spring Festival approaches, with the increase in export orders and the strengthening of domestic rigid demand, the garlic market quickly recovered. The upward trend of prices strengthened, and the garlic market finally ushered in an upward trend before the Spring Festival.

On January 10, the garlic market began to differentiate. With the strengthening of domestic and foreign merchants' stocking, the flow of goods sourced in Jinxiang and Pizhou production areas has accelerated. The new supply of goods in the market has increased a little, and the supply end is dominated by the original supply of goods, which effectively reduces the market selling pressure and provides favorable support for sellers to raise prices.

In the production areas of Qixian and Zhongmu, affected by the epidemic in Henan, the attitude of dealers holding goods is unstable, and there are still many urgent sales sources. Coupled with the factors of epidemic control, the number of merchants who inquired about goods decreased, the trading atmosphere was weak, and the market was still in a downturn.

Through the data research of the past years, we can see that the Spring Festival has always been the golden time for garlic trading, and the probability of a price rise is higher than at other times. It is also a year with a large inventory. 2019 and 2021 were also years with large stocks. At that time, garlic prices rose strongly around the Spring Festival.

Will the garlic market repeat this situation before and after the Spring Festival this year? It's hard to come to a conclusion. The reason is that the area of garlic has been stable even with the slight increase this year, and there is no suitable topic of speculation for garlic sprouts. In addition, affected by external factors such as the epidemic, the export environment and domestic demand structure of garlic have also been changing in the past two years.

Insider analysts believe that due to the recent increase in orders and the start of the Spring Festival's rigid demand, the downward situation of the garlic price is weakening at this stage. Under the situation that the market demand tends to increase as the supply side shrinks, the upward trend of the garlic price can be expected, and the garlic market before the Spring Festival is expected to show a strong fluctuating trend.


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