The price for garlic in 2015 and 2016 has been constantly rising. At its highest, one kilogram was going for more than 18 RMB, a ton. Garlic that was stored for one month could make up to 4000 or 5000 RMB and the high profits attracted more people to enter the industry. Since September this year, after garlic from cold storehouses started being sold, the price went down steadily. Within less than a month the price for one kilogram had dropped to 0.6-0.8 RMB. Previously traders would store garlic in stockpiles, but now each single ton of garlic needs to compensate for a loss of more than 1000 RMB. Due to this unfavorable market price, a couple of traders have panicked and thrown away their goods.
The total amount stockpiled is up to 3,100,000 tons this year. This is an increase of more than 60%. The oversupply has caused the price for garlic from storehouses to go down continuously during the end of September. Cash flows were pushing up the purchasing price for garlic, but the demand for garlic did not increase significantly. The yearly garlic exports from China account for more than 35% of the gross output globally, making China an important source for the demand. However, during the last few months this year, the growth rate of garlic exports has been standing at 8%, which is pressing the price for garlic down even more.