Garlic prices stabilize after big drop - The Packer

Garlic prices stabilize after big drop

09/21/2011 09:41:00 AM
Andy Nelson

Courtesy Christopher RanchAfter a big drop this summer, garlic prices stabilized in September, and some shippers said they could begin to tick up again.

Maurice A. Auerbach Inc., South Hackensack, N.J., wrapped up its Mexican garlic deal around the end of August and was shipping from California and China in mid-September, said Paul Auerbach, the company’s president.

Because of a big Chinese crop, fresh prices were about half what they were six months ago, Auerbach said Sept. 19. But prices were starting to inch up as China switched to shipments from cold storage, he said.

That reversal has come as a surprise to “most everyone” in the garlic industry, said Jim Provost, president of West Grove, Pa.-based I Love Produce, who visits China three times a year.

“When the crop was harvested in June, it seemed there would be overproduction, especially as compared to the last two years,” Provost said. “Buyers were prepared to manage a low-price year.”

And prices were cheap in June and July, Provost said. But extremely strong demand, coming on the heels of high prices from the previous season’s short crop, soon stopped the downward trend of prices.

By early October at the latest, U.S. markets will start to feel the upward pressure on pricing because of strong pull worldwide, Provost said.

On Sept. 20, 30-pound cartons of white netted garlic 3s from China sold for $32-34 on the Los Angeles terminal market, comparable to last year at the same time.

Ten-pound cartons of supercolossal California elephant garlic were $27.50, down from $30-32.50 last year.

Not everyone, however, thinks Chinese markets will strengthen. Bill Christopher, president of Gilroy, Calif.-based Christopher Ranch, said the country has too much product to ship for that to happen, though prices have dropped at a slower rate than he anticipated.

But the markets could remain stable if cold storage owners ship in an orderly manner, spread out over the whole marketing season, Christopher said.

“The cold storage owners aren’t as anxious to dump garlic and get paid as farmers are,” he said.

That said, there was still the chance of dumping — if Chinese shippers begin to notice quality issues, for example.

As for California product, Christopher was happy to see stable markets in September, and expected them to remain stable.

“A lot of retailers are sticking with California,” he said.

Louis Hymel, director of purchasing and marketing at Orlando, Fla.-based Spice World Inc., shares Christopher’s belief that California markets will remain stable. Chinese markets could go up and down in coming months, but they won’t approach last season’s sustained heights, he said.    

Early shipments from Baja California and California were light because of bad weather, Auerbach said. Garlic from those growing regions also was smaller than usual.

Later California product is high quality but also is lacking in size, Auerbach said.

Rain-affected product harvested in July had worked its way through the system, and the California garlic shipping through the remainder of the season should be high-quality and of normal size, Christopher said.

The brisk movement of Chinese garlic in the second half of summer should bode well for California markets, too, Provost said.

“The bottom of the market won’t be as low as it could have been,” he said. “I expect the California prices to hold their ground.”

Maurice A. Auerbach should begin importing garlic from Argentina in late fall, with light volumes expected in December and heavier volumes in January and February, Auerbach said.



Comments (2) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left

Jim Provost    
West Grove, PA  |  September, 23, 2011 at 11:31 AM

I was in China when this story was written, so the information I provided was based on first-hand observations. The market swings involving Chinese garlic have more to do with fluctuations in imports by garlic marketers in the United States than by the actions of the trading companies in China currently. As the traders in China learn how to market the garlic over an entire season, I see similarities to the way California garlic has been traditionally marketed. Prices are more stable and are adjusted as the amounts in storage are assessed to be short or long. If this trend continues, it bodes well for the stability of the market for future years. Jim Provost, I Love Produce

Carmine Landi    
Italy  |  March, 15, 2013 at 07:05 AM

Hello Mr. Provost I'm an Italian food service importer that lives in Italy over 30yrs now and was woundering if you can help me understand if there's an interrest in Italian Gralic as I never imported this type of product into the states and would like to find a distributor at the end of the day I will be ready for this years product with all permits needed. Thank you Carmine Landi

Feedback Form
Leads to Insight