Ginger Price Once Again Surpasses Pork, the Ginger Cycle Returns After Four Years

“Ginger Cycle” Returns

After four years, ginger price is once again more expensive than pork

Our reporter Zhang Zhi

Intern reporter Tang Yin reports from Beijing

Earn a Range Rover in half a year. This was the most ordinary income for ginger merchants during the 2010 “Ginger You Army” period. Just 4 years later, a fiercer “Ginger Army” has returned, and ginger prices are shooting up just like July temperatures.

According to monitoring data from Xinhua News Agency's national agricultural and sideline products and agricultural materials price quotation system, since early February, national ginger prices have continued to rise. As of now, national ginger prices have more than doubled compared with the same period last year.

A reporter from China Times recently saw in interviews at Beijing markets that ginger has become the “new elite” of the vegetable basket. Amid the hesitation and struggle of elderly men and women, only a small amount of ginger was ultimately sold. Ginger is hard to sell, and in the eyes of vendor Xiao Li this is not a good thing. In 2010, when ginger prices changed day by day, the memory of stockpiling ginger to earn more money only to have it all stuck in his hands has not faded, yet a scene that seems familiar is being staged once again.

“It's all floating clouds.” a ginger merchant said.

Stories of the “ginger” world always rise and fall. From 2010 to now, a complete cycle has already been experienced; however, what will happen next? Farmers and ginger merchants who have pinned their fortunes and “money prospects” entirely on the “ginger” world are full of confusion about how to move into the future.

“Ginger You Army” Seen Again

In the morning, Beijing's Xinfadi Market is bustling with people and heavy traffic. Large quantities of ginger and garlic are continuously transported in from various places, and among them, trucks beginning with the character “Lu” account for the majority.

Mr. Qian and his wife from Zaozhuang, Shandong, are among the merchants who both produce and sell their own goods. From June to now, Mr. Qian has watched the wholesale price of ginger rise all the way to 14-16 yuan/kg, an increase of 20%-30%. According to him: “Washed ginger currently has a lower price, while air-dried ginger is relatively more expensive.”

Our reporter's visits found that at retail stalls outside Xinfadi Market, the price has risen to 18 yuan/kg; among them, the price of ginger at Jiahe Supermarket reached 17.2 yuan/kg, while the price of pork in the same period was only 16 yuan/kg. The price of ginger directly exceeded that of pork, and the strange situation of “beating pork” was staged again after 4 years.

“Even a condiment is this expensive, life is too hard!” Mr. Wang, who was buying vegetables, complained to the reporter. According to the current wholesale price, each mu of ginger planted by Mr. Qian can bring him about 40,000 yuan in profit, and he has a total of 32 mu of ginger fields. Roughly calculated, after all the ginger is sold, Mr. Qian will have a profit of 1.28 million yuan.

“This is an ideal situation. Most ginger is purchased at farm fields, and the price is far from as high as the wholesale market price.” ginger farmer Mr. Ma told China Times.

It is understood that ginger generally begins to be planted around April. When planting, bamboo strips, plastic film, shade nets, etc. are needed, and these three items alone cost 1,500 yuan/mu; from planting to harvest, fertilizer must be applied at least 4 times, requiring about 2,500 yuan to 3,000 yuan per mu; ginger is afraid of drought and insects, and compared with garlic, it is extremely difficult to tend. Watering and pest removal also cost 1,000 yuan per mu; adding other expenses and labor costs, the cost per mu of ginger is over 10,000 yuan. This year, due to reduced production, ginger yield per mu is about 6,000-9,000 jin, a reduction from the normal 10,000 jin in previous years.

“Farm field purchases are about 5 yuan per jin. Calculated at 6,000 jin per mu, one mu of ginger is about 30,000 yuan. After deducting costs, the net profit per mu is about 20,000 yuan. Farmers generally also store some ginger and will not sell all of it. Only a very small portion is pulled by themselves to the wholesale market to sell.” Mr. Ma said. Although the wholesale market can bring higher profits, it also carries higher risks. As a condiment, ginger sales are greatly affected by price at the retail stage. Once it cannot be sold, combined with long-distance fuel costs, it will show a net loss.

Stories of the “Ginger” World

“Double it, then turn.” The catchphrase that appeared along with “Ginger You Army” still applies today.

Before 2008, Mr. Qian's family contracted 20 mu of land to plant ginger. After ginger prices soared in 2010, growers all made huge profits. Mr. Qian and his wife got a taste of the sweetness and in 2011 contracted another 12 mu of land for ginger planting.

Fresh ginger is stored in a ginger cellar for more than 2 months before being marketed. If it waits until the next year, it becomes mian ginger, and even then it does not affect sales. Ginger can be stored in cellars for as long as 3 years. “It is precisely because of this characteristic of large ginger that ginger farmers are given room to wait for a price.” Zhang Xubin, president of the Laizhou Large Ginger Association, told the media.

“No matter who it is, you earn as much as you invest.” Shandong ginger merchant Old Song said that in 2010 he earned 2 million yuan. But after ginger prices rose from 1.3 yuan per jin to 6 yuan per jin, then fell to 1.5 yuan per jin, Old Song's 2 million was lost again.

Driven by the high prices in 2010, growers in Shandong, Hebei, Henan and other places planted large amounts of ginger, and the supply of ginger greatly exceeded demand. Government price regulation and crackdowns on speculators caused ginger prices in 2011 and 2012 to fall to “cabbage price,” and most growers and traders lost everything. Due to market uncertainty, in 2013 farmers greatly reduced ginger planting, and in 2014 ginger output fell by two tenths overall compared with the previous year.

Fellow ginger farmer Mr. Chen, who is also in the ginger business, is a large ginger grower in Weifang. According to his account, in 2011 and 2012 the purchase price of ginger plummeted to around 0.7 yuan-0.8 yuan/kg, while for ginger to break even, it must remain at around 1.5 yuan/kg.

“At that time, ginger prices were falling day by day before our eyes. Growing one mu of ginger led to losses of a thousand yuan. Everyone was frantic, and in two years they filled in the money earned in 2010. At the time I felt it was over.” Even over the phone, Mr. Chen's pain at the time could still be heard. And two consecutive years of heavy losses made ginger farmers complain endlessly, which also drove local ginger farmers, in order to reduce pests and ensure ginger yield and quality, to have no choice but to seek stability with highly toxic pesticides. Soon afterward, the nationally shocking toxic ginger “Shennongdan” incident was exposed.

“Although growers all have cellars at home to store ginger, because last year ‘Shennongdan’ was exposed, and many growers sold off their stored ginger last year, growers now do not have much ginger in storage.” Mr. Qian revealed.

According to statistics from the Jining COFCO Agricultural Products Investment Research Institute, before 2008 the national ginger planting area was 1.5 million mu-1.8 million mu, and prices were relatively stable; after 2010, the planting area increased to 4.3 million mu, and prices plummeted; the continuous slump in ginger prices in 2011 and 2012 reduced the planting area to about 3 million mu. In addition, the toxic ginger incident destroyed a batch of unqualified ginger, and this year ginger production fell severely. Some farmers are bullish on the later market and are relatively reluctant to sell.

“I think there is another reason, which is that those big ginger merchants are speculating.” Old Song said. In fact, in the several violent fluctuations in ginger prices in recent years, there have been traces of hoarders. It is not only ginger farmers who hoard, but also wholesalers.

It is understood that whenever it is time to harvest ginger, large ginger merchants join together to frantically buy ginger, creating the illusion among small and medium ginger merchants that prices are about to rise. Once everyone begins to frantically buy ginger, under tense supply-demand relations, the price of ginger naturally rises; by then, the large ginger merchants' purchasing has already ended, and all that remains is to sell the ginger at the right time. Whether sold domestically or exported overseas, they will make huge profits.

However, farmers at the very end of the industry still rely on the previous year's price information to decide planting area, know very little relevant information, and remain in a state of blindly following trends in the agricultural product industry chain.