Ginger prices higher than pork: how to deal with the price surge?

Recently, ginger prices have been climbing steadily. On August 27, reporters visited several supermarkets and farmers' markets in Shijiazhuang, Hebei, and found that the retail price of ginger had long exceeded 10 yuan per jin. In Laiwu, one of the main ginger-producing areas in Shandong, the wholesale price of ginger on August 27 reached around 8.5 yuan per jin.

More expensive than pork: consumers won't buy, and vendors aren't making money

At the Yonghui Supermarket in Shijiazhuang, the price of old ginger is 18 yuan per kg, while the price of new ginger is as high as 28 yuan per kg.“A few days ago, I bought ginger at the market for 16 yuan per kg, but today I see that decent ginger is even more expensive than pork,” said customer Ms. Yan.

At the Qiaoxi Vegetable Wholesale Market in Shijiazhuang, the wholesale price of ginger on August 27 was 15 to 19 yuan per kg. Many residents “shied away”. “After the Spring Festival, ginger prices started climbing, from 7 yuan per kg to the current low of 15 yuan per kg,” said Ms. Li, a ginger vendor. Ginger prices are high, but fewer people are buying than before, so instead she is not making money.

This kind of market has delighted some farmers. In the previous two years, ginger prices were rather low, and some ginger farmers held out and did not sell, storing it in cellar pits, and this year they indeed made a good profit.

But for more ginger farmers, however good the price, they can only “look at the price and sigh”. Wang Fengyong, a farmer in Zhaili Town, Laicheng District, Laiwu, Shandong, now most regrets that at the beginning of the year he could not resist and sold more than half of the ginger that had been stored in his cellar for nearly two years.

“You can't just look at the current high price; growing ginger basically means losing money for two years and earning in one year. No one can say clearly what the price will be next year,” some ginger farmers said.

Shandong's ginger planting area shrinks, drought cuts per-mu yield

Analysis by the agricultural department of Laiwu found that the main reason for the rise in ginger prices is still the market supply-demand relationship at work. In 2010, ginger prices once soared, triggering a fever among farmers for planting ginger, which directly led to lower ginger prices in 2011 and 2012 and a sharp drop in farmers' enthusiasm for planting. In 2011, the ginger planting area in all of Laiwu was 130,000 mu, but by 2013 it had decreased to 90,000 mu.

According to analysis by the Price Bureau of Shanxian County, Shandong, apart from the lower prices in the previous two years and the reduction in planting area caused by the Weifang “toxic ginger” incident, this year's dry weather with little rain also led the market to expect that ginger would not have a bumper harvest after autumn. The hot weather in July and August pushed up the logistics and storage costs of ginger generally by 0.5—1 yuan per jin. Moreover, since March this year, ginger prices have continued to rise, and some wholesalers have deliberately stockpiled ginger.

At the same time, the cost of growing ginger has also been climbing steadily. Based on this year's situation, the cost of buying ginger seed for one mu of land is at least five or six thousand yuan, chemical fertilizers and pesticides are around 1,500 yuan, the cost of “fumigating the soil” for sterilization is more than 3,000 yuan, and adding the cost of hired labor, the planting cost for one mu is at least more than 10,000 yuan.

Because new ginger will not come onto the market until it is harvested in October, market analysis holds that before then, market demand can still only be met by stored supplies, and ginger prices still face upward pressure; after fresh ginger comes onto the market, prices may fall back.

The root cause of this round of ginger price increases still lies in the fact that farmers cannot accurately grasp market conditions and can only blindly follow the trend in planting. Experts suggest building an agricultural product information system, improving the information release mechanism, effectively making use of existing information tools such as vegetable websites, and setting up an information communication platform among production, wholesale, and retail, to guide farmers to plant reasonably and sell at the right time. Because there are many varieties of agricultural products, planting is scattered, and growth cycles are long, while statistical data are relatively difficult to respond to quickly, this requires the joint efforts of the government, market participants, and other parties.