Recent fluctuations in the Chinese garlic market
The market conditions of garlic from storage fluctuated in the last week of November. Overall supply is relatively abundant because medium- and small-scale traders with garlic in storage are quite eager to sell. The season of garlic orders from Indonesia is over. More and more traders who export garlic to South Asia and the Middle East have inquired after garlic prices. Domestic traders maintain an even pace. Low-priced fresh garlic and top-quality old garlic are doing well in the domestic market. Other garlic trade is slowing down somewhat.
There are several reasons for fluctuations in the trade of garlic from storage:
1. Supply: Traders with fresh garlic were relatively eager to sell their garlic after they saw the market grow weaker in late November. They are particularly eager to sell off their second-grade garlic.
2. Price: The regular price of mixed-quality garlic from storage is currently around 3.60-3.70 yuan [0.51-0.53 USD] per 0.5 kg. Traders who bought their garlic in June paid around 3.50 yuan [0.50 USD] per 0.5 kg, and some paid even more. Many traders are not yet able to sell their stock at a profit under current conditions.
3. Market demand: The season of garlic orders from Indonesia is already over. New orders are coming in from South Asia and the Middle East, but the price is relatively low. Processing factories are hesitant to accept orders under current conditions. They prefer to wait and see how the market develops.
4. There are some positive aspects of the current market situation. The holiday season is approaching. This will stimulate domestic market demand, which in turn will encourage the confidence of traders with storage.
5. This winter is relatively warm and this has an affect on the garlic seedlings. In many production areas garlic seedlings are dying and there is a shortage of seedlings. This will certainly have an effect on the production volume next season.
6. The volume of old garlic in storage is growing smaller and so is its influence on the price of fresh garlic.
In conclusion, there are many different factors at play in the garlic market. Will the price of garlic rise or fall? That depends on the speed with which garlic warehouses absorb the supply volume; whether growing conditions are good or bad in the next production season; or whether the export market will improve or deteriorate.