From the trend of garlic in the past five years, the highest year is 2019 and the lowest year is 2018. The trend of garlic in 2018 and 2019 showed a roller coaster like change, and the garlic cycle was also more obvious.
The average garlic price purchase price index in 2023 was 3.66 yuan/jin, a year-on-year increase of 1.95 yuan/jin, or 114%. From the perspective of inventory nodes, the lowest price for 2023 appeared in August, at 3.37 yuan/jin. The highest point appeared in June, at 4.00 yuan/jin. The overall trend maintains a high front and low back trend.
The industry performance during the summer garlic harvest season includes a record high volume of sun dried garlic, continuous rainfall causing widespread mold growth in garlic, and a sharp increase in the volume of garlic rice feed. The amount of dried garlic in the Jinxiang production area has reached a historic high. However, due to the increase in rainy weather, some garlic has become moldy, and the uneven quality has widened the price difference between different specifications and quality standards, resulting in a large amount of high-quality garlic becoming garlic rice seasoning. Secondly, as the acquisition season begins, storage companies generally have high expectations, and garlic prices are starting to rise.
It is expected that the opening price for the summer harvest season next year may remain between 2.50-3.00 yuan/jin. This prediction is mainly based on the prediction and speculation of future supply side volume increase and consumption power.
Review of typical annual market trends in previous summer harvest seasons and acquisition seasons:
The average acquisition garlic price in 2019 was 3.52 yuan/jin, with a year-on-year increase of 329.27%, which is the largest garlic price difference in the past five years. The soaring garlic price has attracted a large amount of private capital to intervene, and garlic speculation is rampant. In early June, the price of new garlic increased from 3.7 yuan/jin to 4.48 yuan/jin after being weighed. At the end of June, prices began to decline due to higher than expected total production, and by September they had dropped to 2.45 yuan/jin. This wave of roller coaster prices has put storage companies in a state of loss and reluctance to sell, resulting in a decrease in the supply of new garlic in the market. When garlic is sealed, the price can reach 4-5 yuan. A sudden event this year caused a sharp turn in the garlic market. The COVID-19 that affected the world broke out, and villages and roads were closed all over the country, resulting in a sharp decline in garlic sales.
2018 is destined to be an extraordinary year for the China garlic market, with the market reaching a decade low. Played a bridging role in the cyclical market trend of garlic. The average acquisition price is 0.82 yuan/jin, a year-on-year decrease of 63.39%, which is the lowest price in nearly five years. Garlic farmers have suffered serious losses, and the low price of garlic has caused harm to farmers. After the 2016 "garlic you ruthless" campaign, garlic farmers were driven by profits to blindly expand their planting area year after year, leading to a serious supply-demand imbalance in garlic. This has led to stagnant sales in the market since April 2018. At the same time, low prices are accompanied by high inventory, which has led to a sharp drop in outbound prices.
1, The Trend of Garlic Outbound Prices in the Past Five Years
The average outbound price of garlic from September to December 2023 was 3.63 yuan/jin, a year-on-year increase of 1.88 yuan/jin, or 108%. The industry performance of garlic in the warehouse includes: firstly, the total garlic inventory in 2023 decreased year-on-year, but still exceeded the psychological expectations of storage merchants. Secondly, the cost of storing garlic in cold storage will decrease in 2023, but there will still be a large number of empty warehouses. Once again, in 2023, garlic will open warehouses ahead of schedule, with old garlic reaching a new high in sales and demand surpassing new garlic. Finally, the stocking for the Spring Festival fell short of expectations, and the support for garlic prices was insufficient, resulting in significant pre holiday selling pressure.
The outbound price of garlic in the main production areas in 2022 was lower than that in 2021, and the trend showed a "√" shape of first falling and then rising. From the trend of previous years, this year's outbound prices are at a relatively low level within six years. The Mysteel garlic outbound price index from September to December was 1.73 yuan/jin, a year-on-year decrease of 0.67 yuan/jin, a decrease of 27.93%. The lowest price for outbound shipments in 2022 appeared in November, at 1.58 yuan/jin. The highest point appeared in December, at 1.88 yuan/jin.
In summary, garlic has shown a strong "garlic cycle" pattern in the past five years, and the "roller coaster" market trend also shows that investing in garlic is a combination of opportunities and risks. Based on the current supply and demand pattern of garlic, it is predicted that garlic prices may maintain a trend of first falling and then rising after next year's Spring Festival. The key is to pay attention to the greening of garlic seedlings in March and the degree of weather coordination during the current period. Judging from the current speed of consumer goods sales, the remaining inventory during the May Day transfer period next year is between 800000 and 1 million tons.
Review of typical annual market trends in previous outbound seasons:
The garlic market experienced another peak from 2019 to 2020. Affected by the low cost of garlic in previous years, the planting area in 2019 significantly decreased, the wheat planting area increased significantly, and the garlic yield decreased, becoming a truly double reduction year. In addition, the increase in agricultural input costs has led to an increase in the total cost of garlic cultivation. At that time, the inventory cost of storage companies was mostly concentrated between 3.5-4 yuan per kilogram. The high price range has also led to a decrease in exports, laying the groundwork for the decline in garlic prices in 2020. Under the continuous high price push, garlic farmers have a high enthusiasm for growing garlic. From September to October 2019, various garlic producing areas in the north have expanded their planting scale, with an expansion rate of 20-30%. The production of garlic will also increase significantly in 2020.
From 2016 to 2017, garlic experienced a fierce competition. Large scale reduction in production in various production areas, with a reduction rate of 70% in Laiwu and 50% in Heze. The price of garlic has skyrocketed to an average outbound price of 6.18 yuan/jin.
