Due to the heavy financial losses in the cold storage sector for garlic in 2017, the majority of storage companies have questioned the profit-making ability of garlic in 2018.
In addition, because of oversupply in the garlic market in 2017, the total production of new garlic in 2018 increased by about 15% compared with 2017. Based on these factors, the storage companies are generally not optimistic about what the market for garlic will bring in 2018. The expected price of garlic is not high, which directly affects the purchase price of garlic this year. Buyers all expect to lower the cost of storage to reduce market risk.
Another factor affecting the price of new garlic in 2018 is that mass production of dehydrated garlic becomes a good foundation for garlic prices. This has led to a situation in which the market for new garlic continues to run at low price levels. For now, there is narrower space for garlic prices to continue to decline. In June, due to the fact that the stocks were basically not stored, the storage companies will be preparing a centralized storage, and foreign demand will increase.
July stable, possible chaos in August
It is estimated that the demand for market purchases in July will increase significantly compared with June, which will result in a boom in both purchase and sales.
Even so, due to the expected low price of the storage this year, it is difficult for raw material prices to rebound sharply. It can be said that in July, the garlic market has a high probability of running stable at a low price level, and the price will fluctuate little. As for August, the price of garlic is mainly decided by the amount of those remaining outside the storage. If there is a large amount of surplus outside the storage, a chaotic market situation would happen there in August.
New planting areas expected to shrink
For the garlic price in 2018, there is not much room for speculation in June to August. The profit margin of refrigerated storage garlic mainly comes from the mass production of dehydrated garlic, which reduces the market supply of fresh-kept garlic. On the other hand, it is expected that the planting area of new garlic will be greatly reduced in 2018 to increase the price of garlic next year.
Greenstream has been operating in the garlic industry for more than 10 years and has unique insights into the operation of the garlic market. In the future, it will continue to adhere to the mutual benefit and win-win situation with customers, and at the same time, communicate among the industry to promote the healthy development of the garlic market.
