"The overall volume of Chinese garlic in storage is currently around 1.5 million tons. The next garlic harvest in north China takes place in May, and that harvest will enter the market in June. We estimate that by that time here will still be around 800 thousand tons of old garlic from 2018 in storage. It is still too early to discuss the garlic market conditions of 2019 with any degree of certainty, but we can consider several factors that influence the garlic market, including the price of new garlic in 2019 or the production volume of garlic in other countries."
"The garlic market has been in a roller coaster for the last few years. The overall surface area devoted to garlic plantation in 2019 is around 25%-30% smaller than in 2018. This leads people in the industry to believe that the price of new garlic in 2019 will be relatively high. Many investors poured money into the garlic industry in anticipation of profitable returns. This reversed the direction of price development for garlic in storage, from "decline" to "increase". This development became particularly clear after the Chinese Spring Festival [February 5th, 2019], when the price began to rise as many traders started to speculate on the garlic market. The price increased by nearly 100% between the low point in January and March 6th. While traders with storage and speculating traders profited from this development, the higher price also caused consumer demand to decline. In many vegetable wholesale markets throughout China the price of garlic is lower than the price of stored garlic in production areas. Many exporters have stopped accepting orders from abroad because they fear that the rapid price increase will result in financial loss for the middlemen."
"Personally, I think that this kind of speculation carries great risks. Investors blindly follow the trend without any real knowledge of the consequences, or any real understanding of the market. The price slightly dropped on March 7th. The price of common-quality garlic in storage is around 5,000-5,200 yuan [744-774 USD] per ton, which is around 500 yuan [74 USD] less than the peak price. If another round of speculation should result in higher prices again, then the export volume will decrease even further. This has extremely negative consequences for the development of the Chinese garlic export industry. Of course, how the next export season will develop also depends on the production volume of garlic in Argentine, Brazil, and Spain."
"We have 200 hectares of garlic plantations in Shandong, which we manage in cooperation with local farmers. We mainly export our garlic to Southeast Asia, the Middle East, Europe, Canada, and South Africa. The new garlic season in 2019 presents us with both opportunity and risk. The opportunity comes from the decline in surface area devoted to garlic plantation, which will limit garlic supply volume. The risk comes from large amounts of investment and the high price of garlic in storage."
