Garlic prices make a comeback; analysts warn against blindly expanding planting

“Garlic you ruthless” makes a comeback; analysts remind: do not blindly expand planting. “Garlic you ruthless” was a popular phrase in 2010, when garlic prices soared wildly, becoming more expensive than pork and eggs. Six years have passed in a flash, and “garlic you ruthless” has made a comeback, with garlic prices once again soaring.

Why have garlic prices skyrocketed again this year, and how long will “garlic you ruthless” last? Recently, when reporters visited some farmers' markets in the urban area of Guanghan, Deyang, Sichuan, they found that although the market was crowded with people, the garlic stalls were deserted. Many consumers felt that garlic prices have been on the expensive side recently, so they could only buy less.

Consumer Sister Liu: Fifteen yuan per jin, who would eat garlic at that price? I won't buy it.

Consumer Huang Shijun: The price has risen too fast, more than ten yuan per jin. Everyone can't afford to eat it.

The vendors said that since the beginning of this year, garlic prices have been on an upward trend, and have now risen to 20 yuan per jin. Garlic vendor Cao Xin'an:

Garlic vendor Cao Xin'an: The wholesale price of garlic this year is relatively high, so the market selling price is also high.

It is understood that garlic currently sold on the market is roughly divided into three types by size and quality, priced at 13 yuan per jin, 15 yuan per jin and 17 yuan per jin, an increase of more than 30% compared with the same period last year.

Not only in Deyang, Sichuan; the current surge in garlic prices is already a common phenomenon nationwide. In Shandong Province, a major garlic-producing area, prices have also risen to a new high in recent years. A garlic vendor at a farmers' market in Jinan, Shandong, told reporters that compared with last year, garlic prices have already risen three to four times:

Garlic vendor: Before the Mid-Autumn Festival, it was eight yuan, seven yuan, and now it has slowly risen. The bigger garlic they sell goes for 12 per jin, while last year garlic was only about three yuan.

Reporters found during visits that ordinary pork costs about 13 yuan per jin, while garlic costs about 11 yuan per jin. The price of garlic is almost catching up with pork. According to data released by the National Development and Reform Commission, in October 2016, the wholesale price and retail price of garlic were 7.24 yuan per jin and 7.89 yuan per jin respectively, up 90% and 67.9% from the same period last year.

Why have garlic prices risen so sharply? Mao Shengyong, spokesperson for the National Bureau of Statistics, said there are two reasons for the rise in garlic prices:

Mao Shengyong: The rise in garlic prices is mainly due to two reasons: one is that weather conditions and a reduction in planting area led to a decrease in garlic supply or output, thus causing an imbalance between supply and demand and pushing up garlic prices. The second is that speculative behavior by some funds cannot be ruled out. But as everyone can see, this is a short-term price increase, and it is a price increase in an individual commodity, which does not constitute inflation.

Cui Xiaona, an analyst at Sublime China Information, told reporters that garlic output decreased this year, while storage traders' wait-and-see attitude and reluctance to sell intensified the phased imbalance between supply and demand. In addition, besides being used as food, garlic has gradually become an investment product. Garlic traders saw an opportunity to make money, so their purchasing enthusiasm ran high, once again driving up garlic prices.

Cui Xiaona: As an investment product, those who stored garlic last year all made money. They have capital in hand. This year, on the basis of reduced garlic output, they feel that supply is lower and there is an opportunity to make money, so enthusiasm is especially high. With strong enthusiasm, many people bought during the new harvest period, which also drove up garlic prices.

Li Pumin, Secretary-General of the National Development and Reform Commission, said that price authorities will closely monitor garlic prices and will quickly investigate and deal with any behavior of driving up prices:

Li Pumin: Recently, inspections of garlic prices have been deployed in the three major garlic-producing provinces of Shandong, Henan and Jiangsu. Reminders and warnings have been issued to storage traders and wholesalers of a certain scale, and preliminary investigations have been conducted into links such as outbound delivery from garlic cold storage and wholesale. Once illegal price behavior such as collusion and price gouging is found, it will be quickly investigated and dealt with.

Liu Tong, spokesperson for the Beijing Xinfadi Wholesale Market, predicted that with the listing of new garlic next year, garlic prices will gradually fall back:

Liu Tong: In the southern production area, that is Dali, Yunnan, garlic that can be listed in February next year has seen an expanded sown area. So if there is no abnormal weather, Dali, Yunnan's garlic will have a bumper harvest by February next year. After the new garlic comes on the market, it will be difficult for the price of the old garlic currently in northern inventories to continue rising, and it may push the price of old garlic down.

Cui Xiaona, an analyst at Sublime China Information, also believes that if the weather is favorable next year and garlic is harvested in large quantities, then prices will certainly decline significantly. Therefore, she suggests that garlic farmers plan their planting area reasonably and not blindly expand planting.

Cui Xiaona: Next year, it is uncertain how weather factors will be. If extremely cold weather occurs, it may affect sales, and garlic prices next year will still remain at a high level. But if the weather is favorable, next year's garlic output will certainly be greater than this year's. With increased planting area and increased output, garlic prices next year are very likely to decline significantly. In that case, ordinary people's profit margins will be relatively small, and there may also be a situation where low vegetable prices hurt farmers. Therefore, it is suggested that ordinary people should not plant in large quantities just because prices are high. They must learn more about market conditions and keep the planting area within a reasonable range.