How were the returns on stored garlic in 2018? It should be said that they were still not up to much, and last year's situation gives us a rough reference point for this year. Of course, the prices of garlic stored in autumn 2017 were generally on the high side, and the later decline in garlic prices led to serious losses for garlic storers across the board. Add to that the sluggish sales of garlic, and by this year's garlic harvest it was still impossible to sell off all the cold-storage garlic.

As for the garlic going into storage this year, Science Farming is still not optimistic. Although garlic prices this year are already much lower than last year, the cost of cold storage is still relatively high, and Science Farming expects that more of this year's garlic will go to making dried garlic rather than into cold storage. After all, dried garlic is easy to store and is used for export, whereas cold-storage garlic is not so simple. On the one hand, cold storage costs are relatively high; on the other hand, even if the garlic planting area decreases next year, the garlic hoarded on the market this year is very likely enough to meet next year's garlic demand.

Below, let us do a simple calculation regarding some matters related to putting garlic into storage.

From what I understand, the storage price for garlic going into storage is roughly 4 yuan per tonne per day per sq m. Calculated on the basis of at least 2 sq m, that still comes to 8 yuan per day, adding 240 yuan in costs per month, which means the cost per tonne of garlic rises by 240 yuan per month, equivalent to 0.12 yuan per jin. Referring to the current purchase and storage price in the garlic market, it is basically 9 mao per jin. If stored for ten months from going into storage to the listing of new garlic in May of the following year, then the price would have to reach 1.76 yuan per jin just to basically break even!

Here we need to weigh things up. Given the current situation of severe oversupply in the garlic market this year, it would already be fairly optimistic if garlic prices next year could reach the range of 1.5-2 yuan. However, we should also be clear that losses during garlic storage, as well as the labour and other costs involved in moving garlic in and out of storage, are also a not insignificant expense.

By then, even if garlic prices can remain at a level where storage does not lose money, the profit margin for garlic storers will still be very narrow. Therefore, Science Farming believes that storing garlic in 2018 is not advisable, though I believe there will still be quite a few garlic traders this year who, with a gambler's mentality, will continue to put large quantities of garlic into storage.

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