The Mintec price of various Chinese vegetables surged in October amid tight supply following heavy rainfall in Northern China. China is the world’s largest agricultural producer, dominating worldwide production of cabbage, lettuce and onion among many other vegetables. In October and November, the price of cabbage, lettuce and onion rose significantly and continue on an upward trajectory. The Chinese cabbage price increased 27% y-o-y and 36% m-o-m in October to CNY 3.93/kg, and this upward trend continues in November. In addition, Chinese lettuce and onion prices climbed up 26% and 7% m-o-m in October, to CNY 6.41/kg and CNY 2.79/kg, respectively.
Adverse weather in Northern China during sowing and harvest led to quality issues and high crop losses of various vegetables. Market participants in Shandong, China’s largest vegetable-growing province reported large losses because of flooded fields. The heavy rainfall impacted the proportion of output suitable for usage, resulting in a decline in supply which has exerted upward pressure on prices.
There are raising concerns that vegetable prices will continue to soar in China, with the Department of Agriculture and Rural Affairs (DAERA) calling on local authorities to manage the steady production of vegetables to stabilise prices. The DAERA advised that emergency stockpiles should be available to prevent further upward price spikes in Q4 2021. The increase in prices is exacerbated by the ongoing surge in energy prices, which is driving production costs higher across the vegetable market. This has created a bullish sentiment in the market, with expectations that prices will remain firm in Q4 2021 if conditions remain the same.