The price of fresh garlic dropped steeply in Jinxiang, east china's Shandong Province this year, causing local farmers to suffer as the price is far below the cost.
Last year, the price of garlic soared to a historically high point. Then after a sudden turn, it has entered a vicious circle of high volatility.
Garlic prices fall below cost
Guo Chengwei is a farmer in Guokou Village, Jinxiang. Last year, he planted garlic on 16 mu (10,667 square meters) of land, with an expected yield of 16,000 kilograms. Because the cost of growing garlic surged, this year he would have to sell it at a price of over 3.9 yuan per kilogram just to break even.
However, the price of garlic in the nearby market has dropped to between 2.4 yuan and 2.6 yuan per kilogram recently, which is far below the cost.
Even though the market price of garlic keeps going down, it has still been very difficult to sell. At such a low price, garlic has fewer and fewer bidders every day.
Yield increase results in oversupply
The yield of garlic increased considerably this year, and its future price is unclear. As potential buyers fear the market risks, the garlic market has been deadlocked.
Wang Naijian, head of the Cash Crop Station of the Agricultural Bureau of Jinxiang, told a reporter that the area of planted garlic in the county had increased to 650,000 mu (433 square kilometers), and the yield per unit had mounted to 1,068 kilograms this year. In 2011, the total yield of garlic reached 694,000 tons in Jinxiang, up by more than 45%.
Price controls needed
Experts say the severe fluctuation in planting areas and yield of garlic is the leading cause of the high volatility of its price.
Zhou Baohua, deputy director of the Commercial Bureau of Jinxiang, said the government should gather statistics for the major garlic producing areas and release information in a timely manner. The information on garlic production and sale must be open and truthful in order to protect the healthy development of the garlic industry.
Liu Peng, Jinxiang's vice county mayor, said the government should strengthen price controls by establishing a risk prevention fund, garlic reserve, and processing enterprise.
