Garlic prices rose to a six-year high

Garlic prices rose to a six-year high 

Starting from the May Day holiday, the domestic garlic market price continued to rise. Jinxiang garlic rice and mixed grades all exceeded 4 yuan / jin, and the price of fresh garlic in various places also increased sharply compared with last year, indicating that garlic prices will rise steadily in 2023. At present, garlic is popular and has less supply and more demand, and the price increase is full of momentum. From 1.82 yuan / jin on September 1, 2022, it has risen to more than 4 yuan / jin at present, an increase of more than 100%. From a relatively low level in 6 years, it has broken through a new high in 6 years.

Data source: Steel Union Data

At present, the prices of the six major garlic producing areas in the country have risen in an all-round way, and the prices of each market have reached new highs in recent years. The general mixed price of cold storage garlic in Jinxiang production area is 4.03-4.06 yuan / jin, and the price of large mixed grade is 4.18-4.25 yuan / jin. Early ripening fresh garlic outside the warehouse has been excavated one after another, and its source is mostly fresh food, and the reference selling price is 3.20-3.30 yuan / jin. The price of 6.5cm net garlic in the warehouse in Pizhou production area is 5.50-5.80 yuan / jin. The price of garlic and rice in the Qixian production area is 3.90-4.00 yuan / jin, and the price of mixed grade is 4.20-4.25 yuan / jin. The general mixed grade price in Zhongmu production area is 4.00-4.05 yuan / jin, and the price of large mixed grade is 4.10-4.20 yuan / jin. The price of the warehouse in the Laiwu production area is about 4.10 yuan / jin, and the price of 6.0cm grade garlic is about 4.30 yuan / jin. The reference price of Indonesian goods in Cangshan production area is 3.40-3.55 yuan / jin, and the reference price of market goods is 3.70-3.80 yuan / jin.

The outbound price of garlic in the main producing areas in 2022 is lower than that in 2021, and the trend shows a "√" shape trend of falling first and then rising. Judging from the trend of previous years, this year's outbound price is at a relatively low level in six years. From September to December, the Mysteel garlic outbound price index was 1.73 yuan / jin, down 0.67 yuan / jin year-on-year, a decrease of 27.93%. The lowest price out of the warehouse in 2022 appeared in November, at 1.58 yuan / jin. The highest point occurred in December, at 1.88 yuan / jin.

This year, the storage company closed the warehouse at a loss, and when the garlic warehouse was opened in September, except for the Henan production area, the amount of sprouts and garlic was very small. Therefore, some merchants in Jinxiang opened their warehouses in advance this year. However, after the opening of the warehouse, the price is still calm as water, the market is affected by the sufficient stock of processing and packaging enterprises, the procurement intensity is small, and the market trading heat continues to be sluggish. Since then, the market has continued to slide slowly until mid-to-late November, with the increase in export orders, the volume of shipments increased, and prices rose. By the end of December, only the storage companies in the Laiwu production area turned around the loss, and the other storage companies in the production area were still in a loss-making state. In December, the policy news of the full liberalization of the epidemic broke out, coupled with the obvious reduction of garlic area in the new season, the price reversed under the support of double benefits. Whether it can turn around in the future requires paying close attention to the recovery of the domestic catering industry.

It is expected that the decline in production is the main reason for the increase in garlic prices in this round. From the perspective of planting area, according to the survey data of the four major provinces of Shandong, Henan, Jiangsu and Hebei, which are the main producers of garlic, the proportion of garlic planting area is reduced by more than 10%, and the national planting area is 6.3379 million mu, and the reduction of seeds has reached 16.59%. From the perspective of garlic growth, this year's garlic is very different from last year, and many garlic farmers said that this year's garlic was seriously affected by the weather and the early growth was not good. Now it has entered the late stage, and even fresh garlic in some areas has been on the market, but the garlic plant stem is thin, thick and uneven, the garlic head is small, and even there are many dead seedlings, so this year's garlic production is expected to increase. Some institutions estimate that compared with last year, under the "double reduction" of seed reduction and yield reduction, the year-on-year garlic production reduction is more than 20%, and in some areas it will even exceed 30%, which is also the main reason supporting the rise in garlic prices.

The decline in production was accompanied by rising consumption. Data show that in 2022, the storage volume of new garlic will be 5.07 million tons, reaching a new high in 10 years, and about 770,000 tons more than in 2021. The inventory in the same period this year was only 350,000 tons more than the previous year, and the consumption of garlic in the same period exceeded last year's 420,000 tons, and consumption continued to increase. In particular, the catering industry in various places on May Day continues to be hot, which is conducive to the further increase in garlic demand, so the trend of continuous growth of garlic consumption this year has been very obvious.

Not only the domestic market is hot, but the sharp increase in exports has further boosted the demand for garlic. From the quarterly data of China's garlic exports, garlic exports basically showed a gradual increase in the first to third quarters and a downward trend in the fourth quarter. In the first quarter of 2023, China's garlic exports were 519,100 tons, an increase of 65,900 tons year-on-year, an increase of 14.54%. Quarterly growth in six years was the highest in history, the highest quarterly export volume in a year. The lowest export volume in the first quarter occurred in 2019, at 371,300 tons. In particular, in March, China's total garlic exports were 227,100 tons, an increase of 76,000 tons, or 50.32%. Demand from Indonesia, the largest importer, rose sharply, with total imports of 66,900 mt in March, up 53,400 mt or 396% month-on-month. It can be seen that foreign demand for Chinese garlic has also continued to develop.

The entire acquisition period presents the characteristics of early receipt of goods by large households, high enthusiasm for free capital, and low participation of old depositors. Driven by the rise in popularity, the acquisition speed of various production areas has accelerated this year, and the quick victory has basically not dragged the mud. In addition, from the perspective of garlic quality this year, the quality of garlic in major producing areas is generally better than in previous years, and the proportion of large people is more than in previous years, and the lack of diseases and pests makes this year's multi-producing areas achieve a bumper yield. The supply of dehydrated garlic and garlic rice is relatively tight.

To sum up, garlic has shown a strong "garlic cycle" law in the past five years, and it can be seen from the "roller coaster" market that investing in garlic is both opportunities and risks. It is believed that with the gradual restoration of the order of production and life, the garlic market will usher in a new turning point.

综上所述，大蒜近五年来表现出了较强的“蒜周期”规律，从“过山车”式的行情中也看出了投资大蒜是机遇与风险并存的。相信随着生产生活秩序的逐步恢复，大蒜市场会迎来新的转折点。