Though parts of the Chinese garlic crop accrued higher levels of mold this year, volume is still expected to be higher than in previous years. That increased volume could lead to softer prices in North America as increased levels of product arrive from China.
“Right now, the garlic market is firm in China,” said John Huang, a garlic importer based in Nova Scotia. “The garlic market in North America is influenced to a large extent by Chinese garlic, so if the Chinese market is up then the North American market will also be up.” But that influence, because of shipping times, takes several weeks to make itself apparent. For that reason, Huang pointed out that there's a delayed reaction in North America to anything that might happen in China.
“It's estimated that volume from China will be 30 percent bigger, so that's going to push prices down in the US,” said Huang. “But because every market has an inertia of its own, prices will not be affected on a daily basis.” According to Huang, the reference price for Chinese garlic right now is around $600 per ton for five centimeter normal white garlic FOB Qingdao.
In addition to more volume, Huang noted that this year's Chinese crop will have larger sizes, even though rainy weather during harvest led to more garlic bulbs that had mold. But that didn't have much of an effect on this year's output, which will have an effect, albeit a delayed one, on the North American market.
“Chinese garlic volume is bigger this year,” said Huang. “So that's going to push prices down in the US.”
