Abundance of Chinese Garlic Amid High Demand for Mexican Garlic, Grim Outlook for Spanish Onions
Garlic - China
Chinese Garlic in Season
Harvest Estimates for 2020
Chinese garlic enters the market in May. China and Spain achieved abundant production this season, but due to COVID-19, it is uncertain whether China will be able to market its products normally.
Export Outlook for 2020
While the export price was quite stable in April, the current price continues to decline with the arrival of the harvested volume. The price of garlic was around USD 1.13 per kg two weeks ago, but it has fallen to 0.71 USD per kg since then. Suppliers expect that the price will remain at USD 0.57-0.71 per kg. However, the erratic nature of the market will make forecasts difficult.
Some industry experts anticipate that there is still room for the export price to drop even lower. The overall surface area devoted to garlic plantation increased by 25%-30% in 2020. In addition, many garlic production areas have enjoyed excellent weather conditions, which could further increase the production volume.
Garlic - Mexico
Mexican Garlic in Season
Harvest Estimates for 2020
Harvests for Mexican garlic are ongoing, and production is expected to be 14% less than last year. Producers are hoping to achieve a harvest of 3K tons this year, but suppliers have reduced cultivation areas, as garlic is viewed as an expensive product to cultivate since the production time frame is longer than for most vegetables.
Nevertheless, the quality is expected to be very high since there were no plagues during the production period. The early varieties bear fruits at the end of March, and the main harvest season begins in May.
Export Outlook for 2020
The COVID-19 crisis has triggered demand globally and domestically for Mexican garlic. The per capita consumption of garlic in Mexico is estimated at half a kilo. Garlic is an indispensable ingredient in cooking, but it also has an important presence in the medicine and cosmetics industry.
In April, demand was higher than usual due to a shortage of imports from China. Due to this high demand, there has been almost no stock available and the suppliers have been waiting for the new harvest phase at the end of May.
Onion - Spain
Spanish Onions in Season
The Spanish onion harvest season ranges approximately from May to October, with the Red onion harvest in June, the White onion harvest from May to July, and the Yellow onion harvest from July to October.
Harvest Estimates for 2020
The harvest for this season in one of the earlier harvest regions Andalusia (second-largest onion producing region in Spain), is seeing a lack of laborers which is affecting the harvest. This is especially detrimental as the newer varieties of onions that Spain cultivates possess a thinner skin that needs to be harvested manually.
Export / Price Outlook for 2020
Additionally, in the Costa Blanca region of Spain, local suppliers are having to sell their products at a 60% lower price compared to May 2019 due to competition from New Zealand and Peru, combined with hindered exports due to COVID-19. According to Tridge data, Spanish onion prices have decreased by 10.2% over the past quarter.
Spanish onion suppliers had already gone through a troubling last couple of years as European production in 2019 accounted for the largest production volume ever, reaching 6.34 million tons, a 19% increase from the previous year. As a result, Spanish onions were sold at a lower price.
Furthermore, Spain mostly cultivates large onions for which sales have been threatened by medium-sized imported onions from the Southern Hemisphere which have a longer shelf life. Spanish onion producers, however, are expected to face more hardships as European production is expected to reach another record high this year. Additionally, in contrast to Spain’s high costs for irrigation, other European countries such as Germany, France, and the Netherlands have lower production costs which is hindering profitability of the Spanish onion sector.
