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The Latest Analysis of Garlic Market on March 23th

Last week cold storage garlic market can be described as ups and downs.The market changes are unexpectedly that it was rising and falling very fast.

First wave: inflation  
On March 16  

Temperatures plunged in most areas of China. The lowest temperature in Jinxiang production area has dropped to zero.The strongest cold wave weather in spring has come, and “reverse spring cold” has become the hottest topic. Many industry insiders have stated their insights on garlic forums and live broadcasting platforms. The topic of cooling and reduced production were like a shot in the arm injected into the market. With this wind, the sales in garlic market quickly recovered, not like previously decline in trading, the stockholders held a strong mood to maintain the higher prices and did not want to sell. In two- three days, the price of garlic went up by about five points, and individual traders were also ready to involve in, the production area was busy with purchasing and selling.

Second wave: drop  

On March 18  

The rise of garlic price was based on the hot sell, but the demand was not released in time, which made the price rising unstable, when buyers figured out their demand in a clear consideration, the garlic price would be back to the start. The epidemic has affected many places in Shandong province, and protection control policies have been upgraded in all regions, the transactions in each producing area have been affected to varying degrees. On March 18, with the decline of cold wave opinion, the early delay in the supply of goods appeared again. The supply in market was more than normal, but purchasing capability is not good. The garlic prices fell 2-3 points after their raising. The stockholders were filled with sadness and helplessness.  

Third wave: rise  

On March 20th,

The garlic market seemed to have a turnaround again with the news of a third batch of orders from Indonesia.  Packaging buyers suddenly bought more, and buyers from middle east and south Asia were actively buying mixed grade garlic products too. Market sentiment was condensed again and two days in a row jinxiang cold storage garlic prices has floated 35 points.  

Then, was this round of garlic price rising trend really certain? What were the main reasons behind it?

Though a in-depth understanding of the international garlic trading, the sudden rise in garlic prices mainly came from the rigid support of export orders. It was learnt that factories were busy in preparations and productions of export orders to countries of the Middle East, South Asia, South America and other markets. On March 15, The policy to access in Kaifeng (in Henan) has changed because of epidemic prevention. On the evening of March 20 the roads to Qixian were closed and restricted, many export packing goods ready to go abroad had to be returned to the refrigeration house, the goods transportation was not free and the supply chain was disrupted, part of the rigid demand had transferred to Jinxiang, Zhongmou and other production areas, which had led to the change of garlic market supply and demand pattern.

Because of the above earlier downturn, some export enterprises were no rush in replenishment.  

At the end of March, the loading time of the ordered goods sending to overseas market was tightened, the export enterprises also entered a tense preparation time stage. The market demand had gone up suddenly, and the release of all those of demand had make the garlic market stronger. Meanwhile, the fresh garlic price had been sold to a level near farmers’ planting cost. A lot of stockists thought that “The low price would go nowhere further”, there were other stockists who were in loss tended to flock together to pull though. The strength of Prop up the market gradually emerge that the seller changed the passive position in the early trading and the supply of good quality goods is tight. The selling tide turns into the buying heat, and the stockholder finally waits for the opportunity to turn the corner.

On the one hand, according to the data of international Garlic Trade Network, the export data of January-February 2022 is not optimistic. The fresh or refrigerated garlic exports volume in January was 13900 tons, and the one in February was 69,900 tons, both had dropped 9.04% and 21.78% compared with the same period in last year. Aside this, as of 10 o ‘clock on March 21, the number of medium-high epidemic risk areas in China had reached 572, and the epidemic prevention situation remained grim. In order to effectively block the spread of virus, most garlic processing plants in Cangshan had been shut down, the offline catering industry has also suffered due to the impact of the epidemic. Businesses are struggling and consumption has a slow recovery.

As the time of the renewal of warehouses coming soon, the news about the 2022 Indonesian orders being coming quietly spread. Although there is no specific time, but the quota again decentralized, bringing new hope to the stockist and the stage to form a price rebound upward power. For the future market trend, we still need to pay attention to the new season garlic and wait.  

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