With the war between Russia and Ukraine, the shipment bottleneck continues. An increase in fuel and freight prices is likely to continue the inflationary trend for dried garlic in 2022 in the global market.
The plantation for the 2022 crop is complete, and the estimated acreage is higher than last year. So far, the crop emergence is expected to be normal, with the weather being supportive.
Reports suggest that the inventories across the country are suited to meet the domestic demand but maybe at a bit higher price.
The crop can be impacted due to the weather, water, and higher labor cost. It can eventually reflect the price trend for the crop after the harvest.
It is estimated the price can increase by 20 to 25 percent due to inflation. At the same time, the minced and extra-low micro garlic availability in the domestic market can be tight in the near to medium term. Also, the irradiation and toasting capacities are expected to operate at 100 percent because of the increased demand, which will move the price up in the future.
The plantation for 2022 in China for the garlic is complete. The acreage is up by 3 to 5 percent from last year. But there is concern about the yield drop in the 2022 harvest due to the delayed planting of the crop because of unseasonal rainfall, extreme cold weather followed by snowfall in the central producing regions.
Experts state that by the end of the first quarter of 2022, a better picture of Chinese garlic production will be available.
Though the garlic shipment in China has not been impacted by the rise in the COVID-19 omicron variant cases, a preventive lockdown has been enforced in Shenzhen and Jilin. In addition, there are reports of trade disruption due to the anti-virus controls in the ports and the shutting down of auto and electronic factories. Hence while the authorities are monitoring the situation closely, the impact it will have on the dried garlic trade is being observed by the traders and exporters.
Currently, the flake price is stable but is expected to increase if the overall yield of the crop drops. Due to the Omicron variant’s increased freight prices, the lockdowns and limited container availability for shipment will keep the market unpredictable to bullish for 2022.
Reports also show that the destination spot premiums will increase until the supply becomes normal.
All these factors push the Chinese dried garlic market traders to diversify the supply and extend the coverage.