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Supply shortages predicted in Chinese dominant garlic market

February 17, 2020

1 mins read

China is the largest exporter of garlic, accounting for 80% of total exports. The coronavirus outbreak resulted in expectations of a disruption in global garlic trade, however, rising Chinese garlic prices do not support dull demand. Mintec’s Chinese garlic price rose by 9.3% m-o-m and 39% y-o-y in January 2020.

Furthermore, the US is the largest export destination for Chinese garlic. Approximately 30% of the US garlic market is import-dependent, of which China accounts for 63%. Mintec’s US garlic price - increased by 7% y-o-y and 4% m-o-m in January.  The upward price movement in the US is likely to be a result of market speculations of supply shortage from China. The dried garlic market also experienced disruptions due to shipment troubles. However, as at the beginning of February, the garlic powder delivered to the US still seems to be unaffected by the outbreak, with Mintec prices down 4% m-o-m and 5% q-o-q.

Garlic prices in top exporting countries such as Spain, Argentina, and the Netherlands are expected to increase in the medium-term as some of the importers could divert their demand from China to these alternative suppliers. However, with China making up a significant proportion of the market, it will be challenging for any other origin to meet a significant shortfall in Chinese supply. The garlic prices in Spain were up 5% w-o-w in the first week of February 2020.

Procurement's role in the future of food manufacturing

Rutika Ghodekar
Rutika Ghodekar

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