Low demand for garlic in global markets hits Chinese exports

Published 2021년 8월 20일

World’s largest garlic exporting country - China is currently witnessing low demand for garlic from the world. Between January and May 2021, the export volume of garlic fell by 20.2% in comparison to the previous year. Garlic exports fell down due to a worldwide shortage of refrigerated containers, rising sea freight costs, and new waves of lockdown measures. The reduced volume of garlic exports increased the stocks and pushed down the domestic garlic prices in China as well as the export prices.

Garlic season in China starts in June and lasts until August. The country had a share of about 70% in the global exports of garlic and exported mainly to Indonesia, Vietnam, Malaysia, the Philippines, and Thailand. In 2021, it was initially expected that the garlic crop would be lower than usual owing to frosts in the winter of 2020. However, there was no evidence of reduced harvest as the volume and quality of garlic is the same as last year’s season.

Source: Tridge.

The garlic sector across the world is still facing uncertainties like worldwide shortage of refrigerated containers, rising sea freight costs, and new waves of lockdown measures. On top of this, trade suspension at various ports has also reduced the demand for garlic in the main importing countries. According to the International garlic trade data, China exported around 634,700 tons of fresh and frozen garlic between January and May 2021. The export volume had declined by 20.2% from 796,000 tons in 2020. The reduced volume of garlic exports has pushed down the domestic garlic prices in China and the export prices as well.

In May the export price was about USD 968.82 per ton, 0.86% lower than the price recorded in April. As China enters the garlic season, it is expected that the prices may fall down even more. Even though this season started with a declining price trend, the prices remained higher than the prices recorded in the previous season. In May garlic was priced at USD 968.82 per ton which was 26.67% higher than the price of May 2020.

Garlic exports are currently in fear due to the low garlic demand and prices in the market. There are very few orders in comparison to last year and a large quantity of garlic stock with them. This has turned out to be a serious hit for the Chinese garlic export industry. Furthermore, the appreciation of the Yuan has put pressure on export companies and pushed down the prices and volumes even more.