Asia-Pacific holds a 91% share of the global garlic market, in terms of consumption of garlic. China alone accounts for as much as 80% of the global garlic supply.
But the coronavirus outbreak has hit the global garlic market hardest, especially the supply chain in the international market. According to the Wall Street Journal, garlic prices are rising due to disruptions in the supply chain across the globe. These disruptions have carried a brutal impact on many countries. The retail prices of garlic have gone more than doubled in some countries. In China, wholesale prices rose 13% in the first two weeks of February, according to government data.
Garlic is known as a natural remedy with antibiotic effects. It has always been considered good for our immunity system and recently associated with a cure for COVID-19 disease. Accordingly, the demand for garlic is booming in the retail trade. That’s why there have been times when garlic demands have been difficult to cover.
The current garlic market trends have brought both challenges and opportunities for countries. Below is a quick observation of the global market trend, based on the challenges and opportunities in many countries.
Challenges Faced by Countries
- Spain – The price of Spanish garlic has risen by 15% since January because of high demand due to the global market shortage. Although the new season’s harvest is soon to start in Andalusia (Spain’s southern region), the problem is the shortage of workers. Spain is having a shortage of laborers due to lockdown. Workers are yet to return and work in the fields, according to agricultural analysts.
- South Africa – South Africa is going through the issue of high garlic prices, especially because it imports garlic from Spain and China. The country imports more than 60% of the garlic from Spain and China. But there is a low supply of garlic on the market due to the lockdown. Although South Africa cultivates garlic, a majority of local growers has stopped planting garlic because they are unable to compete with the imports.
- Germany – The garlic market in Germany remains stable throughout the year. But, lately, the country is going under the shortage of garlic supply. The demand from the retail sector in the country is rising constantly. Orders have doubled and even tripled compared to a normal situation. Although Germany has imported garlic from China, the volume is not enough to meet the demand. The available stock is barely sufficient. There are concerns about how Germany will cater to this demand in the long term. The market situation in Germany has logically an impact on prices, which have been rising in recent weeks.
- North America – Garlic stocks are also limited in the North American market. The imports from China are shutdown. Though some of the supplies currently come from California, it’s not enough. It has carried a brutal impact on the Canadian and the US market. Prices have tripled in some cases. However, experts expect the prices to go back to normal around June.
- France – The stock is almost empty in France due to the high demand. Although fresh garlic is available in southeast France, the volumes are very low to cater to the demand. The point is whether there will be enough stock until the next harvest in France.
- Mexico – Mexico is left with hardly any stocks of garlic due to increased demand. The country is encountering the situation due to the shortage of imports from China. The Mexican season runs from March to the end of July with a lot of cultivation of Chinese purple garlic and white garlic. But, the volumes are very small and the country is struggling to meet the need of the hour.
- Australia – Australia plays a small role in the international market when it comes to garlic cultivation. Only 20% of the garlic sold in the country is grown on its land. The garlic market in the country is highly dependent on imports. Recently, the country has witnessed a 7% increase in its imports, according to AGIA.
- Indonesia – This Southeast Asian country is another name to grapple with surging garlic prices. This situation has come to meet owing to the fast-spreading coronavirus fears over supply disruptions in China. As per the report in Bloomberg Quint, Indonesia counts in the Asian country for 90% of its imports. But due to coronavirus, the shipment has come to halt. Imports of garlic are banned. This situation has led to an almost 70% surge in garlic prices in the capital Jakarta in just one week.
To stabilize prices, the country in February released 20 tons of garlic to be sold at 30,000 rupiah ($2.04) per kilogram. It is also likely to issue permits to import garlic from other nations such as Thailand and Laos other than China.
Current Global Garlic Market: An Opportunity for Many Countries
Despite a number of countries facing challenges, some nations are considering the global market shortage an opportunity to enter new markets.
- An opportunity to recover production costs for Italian growers – Due to global market shortage and shutdown of the supply chain, garlic prices are rising in Italy. But, the higher prices are welcome for garlic growers in the country. The increased prices are a recovery for them. Actually, garlic prices have remained very low in the last two years. Growers had hardly been able to earn profits last year; they were not able to cover even their production costs. But now garlic is in high demand in Italy, growers are able to recover their production costs.
- The global garlic shortage is profitable for Egypt – Egypt is taking advantage of the shortage of garlic in the market. The volumes available in the country are sufficient to meet the high demand. So, the country is looking out for a new opportunity and entering new markets. Egypt has started exporting garlic to Brazil. And fortunately, the demand for Egyptian garlic has risen in the US, Canada, and South Africa. So, the country is supplying garlic to these countries too.
- High import tariffs on China beneficial for Peru – The US has shifted from China to the Peru market due to the high import tariffs on Chinese garlic. Peru has exported greater stocks of garlic to the US. Southern Peru cultivates garlic and also exports to Brazil, Mexico, and Australia. The export campaign runs from the month of September to January, with some smaller volumes from July. Recently, the sizes have been smaller than usual.
- Better Price than Last Year for Chile – The garlic cultivation in Chile starts taking place in November, with a peak in January and March. Mexico and Brazil are the two biggest export destinations for Chile. Currently, Chile is getting better prices for garlic than last year. However, the garlic prices are lower than that of Chinese garlic. Brazil is buying more Chilean garlic. That’s because Chinese garlic is more expensive due to anti-dumping measures.
- Price Drop in China – The prices of garlic in the domestic market in China are expected to fall. This is because China still has plenty in stock and the new harvest has also arrived this month with larger volumes than last month. There was a great demand for garlic after the Chinese New Year, but meeting the demand immediately was impossible because of logistical issues or shortages of staff. The price, thus, remained high, despite having large stocks in store.
The price of garlic is increasing in the international market. The reason could not only be lockdown, but the delay in COVID-19 vaccine development also. Since garlic is considered a natural remedy for immunity, a good ingredient for high blood pressure, strokes, and heart attacks, people across the globe have increased the intake of garlic.
Once the lockdown gets over and the ban on the global supply chain is lifted, the demand for garlic will go back to normal and prices will reduce.