Prices have been fluctuating since garlic became available in China this June, increasing by 2,500 yuan/ton between mid-September and early November. Some suppliers suspended sales and prices have been rising slowly. Mr. Zhang Shuhan of Jining Greenstream Fruits & Vegetables co. Ltd. talked about the recent garlic market.
“Most of the small and medium-sized stockpilers are not optimistic about the market and have sold their stocks, while those with more able to endure risks are currently not motivated to ship due to higher prices, resulting in reduced market supply. Although the storage of fresh garlic is not small, this practice has shifted the balance of supply and demand in the short term, resulting in tight supply and slow, steady increases in raw material prices,” Mr. Zhang said.
“During the same period last year, the storage was about 4 million tons. Due to lower prices, many traders processed garlic into products that can be stored for a longer time. Products consumed in this form were about 1 million tons. However, due to higher prices, almost no traders have made garlic products this year, and the current storage of new crops is 3.2-3.4 million tons."
When talking about the reasons why the retailers are reluctant to sell, Mr. Zhang said, “Currently, the price of garlic sold in China is 4 yuan/half a kg, but the purchase price of raw materials for some stockpiles in June and July was above 4 yuan/half a kg. Although prices have recovered somewhat in recent days, they have not yet reached the purchase price. If sold now, traders will suffer a loss, so the bigger ones are waiting for the right time to sell. In terms of exports, the fluctuations of garlic prices have little effect on the overseas markets, and the fluctuation of the export volume is kept within the normal range of 15%."
"It is expected that garlic prices will continue to increase slowly in the next few weeks. However, due to the unexpected volume of fresh garlic storage this year, there may be a risk of having large volumes leftover in a later period," Mr. Zhang concluded.
Jining Greenstream Fruits & Vegetables co. Ltd. specializes in the export of produce. In addition to garlic, the company mainly offers ginger, carrots, honey pomelos, apples, pears, and citrus.
Contact: Zhang Shuhan
Company: Jining Greenstream Fruits & Vegetables co. Ltd