Wednesday, June 8, 2011

Garlic Prices Crash

Trucks in Jinxiang County's garlic exchange.

Last year at this time, soaring garlic prices were almost a national crisis in China. This year garlic prices are falling.

On a Hangzhou web site, a reporter asks, "Have you noticed lately restaurants have been serving larger portions of garlic in dishes?" According to the article, last year when garlic was expensive, restaurants stopped serving garlic in stir-fried vegetable dishes and Sichuan-style restaurants substituted huajiao for garlic as a flavoring in hot pot.

In Hangzhou restaurants garlic is now back in the stir-fry. A restaurant boss said garlic prices started going down in April.

A vegetable vendor in a Hangzhou market said, “Last year, at its peak, the retail price was 7 or 8 yuan per jin. In March it started falling. Now it’s about 4 yuan.”

According to the Zhejiang price net, Hangzhou’s average wholesale price in late March was 5.35 yuan per jin, but on June 1 it was 2.8 yuan. The retail market price peaked at 6.75 yuan and on June 5 it was 3.75 yuan.

A big garlic harvest is the reason for the decline. In Jinxiang County of Shandong, for example, farmers expanded planting of garlic by 100,000 mu this year from last year's 650,000 mu. The yield per mu was up several hundred jin from last year's 1000 jin too. Production in the county may have doubled. As they say, "the cure for high prices is high prices."

Another article in Shandong's Qilu Evening News interviews farmers in Jinxiang county trying unsuccessfully to sell their garlic. Last year after the garlic harvest, traders came to their door "blindly" buying garlic at 2.5 yuan per jin. Speculators were investing in garlic.

This year, Mr. Zhang and Mr. Wang have sat in the Jinxiang market for several days trying to sell a load of garlic they bought for 1.5 yuan per jin. No buyer will give them 1.6 yuan, so they may have to take a loss.

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