A big drop in Chinese and Argentinean imports has sent garlic prices soaring, and it could be a while before they come back down.
In late December, garlic was bringing up to $2 a pound wholesale, a price Louis Hymel III, direc-tor of purchasing and marketing for Orlando, Fla.-based Spice World Inc., said he doesn’t remember seeing in his 40 years in the business.
“Prices are at record-high levels,” he said.
On Dec. 29, netted 3s of Chinese garlic were selling for $32-34 on the Philadelphia Terminal Market, up from $14-15 last year at the same time, according to the U.S. Department of Agriculture.
The main reason is that growers in China, which grows about 75% of the world’s garlic, cut volumes by about 40% for the 2009-2010 season because of slumping markets in previous years, Hymel said. He also said more garlic was staying in China because many in the country believe it protects against the H1N1 virus and demand has skyrocketed.
Jim Provost, president of I Love Produce LLC, West Grove, Pa., and Patsy Ross, vice president of marketing for Christopher Ranch, Gilroy, Calif., put the Chinese volume decline closer to 50%.
For similar reasons as those cited in China, production in Argentina also is down this season, Provost said — about 30%.
Prices now, he said, are as high as he remembers them being in at least 15 years.
“It’s like a perfect storm,” he said. “Everyone’s kind of scrambling to see what they’ll do for gar-lic coming up.”
Prices will likely stay elevated at least until Mexico enters the deal in April, Hymel predicted. But they could stay high until May or June, he said. Spice World will begin shipping product from Baja California in May and from Central California in late June.
Prices could rise even more in 2010, Ross said.
“If demand for garlic stays high and the predictions of less total imports remains true, then perhaps the garlic market will go higher,” she said.
Because it’s a smaller producer, Mexico won’t likely have much of an effect on markets, Provost said. He said there’s a chance markets could stay high past June.
The prices are bittersweet for Doug Stanley, general manager of Huron, Calif.-based Harris Fresh Inc.
“Unfortunately for a lot of California producers, the market took off and gained momentum at the end of our marketing season,” he said.
Stanley said he heard Chinese volumes were down 30-40% in 2009, and he said prices in U.S. markets would likely stay high through February or March.