Ginger supply and demand analysis: what was the price trend in 2016-2017

Some time ago, ginger prices rose noticeably. As a result, rumors have recently been circulating in society that after "Suan Ni Hen" (garlic price surge), "Jiang Ni Jun" (ginger price surge) is about to make a comeback too. However, as soon as the rumor emerged, several media outlets immediately refuted it, saying that the rise in ginger prices was only due to a temporary shortage of supply.

Exactly. Right now is the transition period between new and old yellow ginger, when ginger supply is in short supply, so supply is limited, and prices naturally rise. Recently, our reporters visited major agricultural product markets across the country and found that ginger prices have already begun to slowly fall back. But reporters also found that the ginger market has recently seen new changes, which can be summed up in one word: "chaotic." What exactly is going on?

November is the season for fresh ginger to be put into storage. At the Diao Town vegetable wholesale market in Zhangqiu City, reporters saw that compared with the high prices in early November, ginger prices on the market have now begun to fall back. Vegetable wholesaler Liu Tao:

Liu Tao: Prices are falling now, but the decline is not very large, because this period is exactly when new ginger is about to ship. Once new ginger ships, our prices will be a bit cheaper, and overall prices will fall by three or four mao.

Reporters saw that the ginger sold on the market now is basically old yellow ginger from last year, but prices vary widely. Cheap washed ginger is about 2.5 yuan, while the more expensive kind can reach 4 yuan. Zhuo Chuang analyst Zhang Min explained that the ginger market is a bit chaotic now, and one reason is that the quality of old yellow ginger varies.

Zhang Min: The reason prices are rather chaotic is that the market now has both new goods and old goods. New ginger has not yet officially entered the market, and old goods are also dwindling. In addition, after all, it has been stored for a year, so quality also varies, which is why there are all kinds of prices. And the price gap between good goods and poor goods is also relatively large.

Zhang Min told reporters that the recent "chaos" in ginger prices is also related to sellers' supply psychology. During the special period when old and new yellow ginger alternate, because old yellow ginger stock is becoming scarcer, sellers are increasingly cautious about shipping. Everyone is watching prices and shipping according to demand, and this situation has also caused ginger prices to fluctuate slightly, sometimes rising and sometimes falling.

Zhang Min: In early November, fresh ginger in northern Hebei, Liaoning, and Shandong had already been harvested in a concentrated way. During this period, fresh ginger cannot yet be sold. Ordinary farmers have to wait about 40 days before fresh ginger can come onto the market. During this period there is a gap in the market, and old yellow ginger still dominates. But at this time, on the one hand, farmers have already put new ginger into cellars, and they are not in a hurry to store new goods everywhere, so farmers' mentality about shipping is also relatively calm: if the price is good, I sell; if the price is not good, I am not anxious. So when the market has a certain demand, prices depend on that day's market demand. If demand is greater, prices are a bit lower; if demand is smaller, prices rise slightly.

Uneven quality and unstable supply and demand have led to irregular changes in ginger prices recently. Reporters learned that in addition to somewhat "chaotic" price changes, during this year's transition period between old and new yellow ginger, the new ginger market conditions in the north and south also differed. Now, the northern ginger market is relatively normal, and sellers are selling ginger at acceptable prices. But some sellers in the south, because market conditions are hard to meet expectations, have begun hoarding goods and holding back sales.

In addition, this year, due to weather conditions, the output of fresh ginger in various places in the north and south also changed differently. Some areas increased production, while some areas reduced production, and the unpredictable output changes have also left many market wholesalers confused about the future trend of ginger. Wholesaler Liu Tao:

Liu Tao: Prices may fall a bit more later, but there is no way to say for sure with this ginger, because some production areas reduced output, while some instead increased output. I estimate this year's ginger will not differ much from last year's.

Reporters learned that because ginger from different production areas has shown different changes of increased or reduced output, recently some people on the market have been stirring up the "ginger production reduction theory," believing that weather changes will affect national ginger output and lead to price changes. Analyst Zhang Min denied this.

Zhang Min: Ginger is concentrated on the market around Frost's Descent. This year, looking comprehensively at the main production area Shandong, and also at the Northeast and southern regions, after the Chinese New Year in 2016, the south did not have rather frequent rain, and in addition July and August rainfall was also rather frequent. So before this year's new ginger came onto the market, there were production reduction theories on the market. These statements: weather did indeed affect output in some production areas, but in most production areas the impact was not very large.

Zhang Min analyzed that later, fresh ginger will gradually come onto the market, while old yellow ginger will also gradually withdraw from the market. By then, market transactions will complete the transition from old goods to new goods, and prices may gradually become clearer.

Zhang Min: In view of the high purchase price of fresh ginger in October this year, cold storage operators and growers have relatively high expectations for the opening price of new yellow ginger. In addition, because the 2016-2017 season has just begun, storers are not yet in a hurry to dump goods. Therefore Zhuo Chuang predicts that before the Spring Festival, if there is no significant change in demand at home and abroad, then the price of new yellow ginger in Shandong production areas may adjust slightly around this opening price, without major fluctuations.

Overall, this year's ginger returns will be better than last year's, and this situation has also led to high enthusiasm among growers for planting ginger. In this regard, analyst Zhang Min reminds everyone not to blindly expand planting.

Zhang Min: As a seasoning, the market demand for ginger is, after all, relatively limited. Against the main backdrop that supply and demand affect prices, it is recommended that the vast number of growers, who are the main suppliers in the ginger market, promptly understand market supply information and price changes in recent years, reasonably arrange planting and shipping plans for each period, and ensure their own returns to the greatest extent possible.