Garlic

Speculation on garlic futures in China has been blamed for a pricing slump that has pushed the price of the commodity below the cost of production.

According to a report in the Epoch Times, prices began to fall when the new season crop began entering the market in May.

The newspaper reported that at current prices farmers would lose Yn2 (US$0.16) on every kilogram of garlic they produced.

Garlic grower Wang Wei told state media organisation Xinhua the cost of garlic this time last year was Yn7 per kg, but was now only Yn1.5. The cost of producing 1kg of garlic, however had increased 40 per cent to Yn3.40 per kg, he added.

Part of the blame for the low pricing has been levelled at speculators. Peter Li of leading Chinese agricultural produce supplier HengFeng Fresh Produce told Fruitnet.com garlic prices were greatly influenced by speculation on the garlic futures market.

“The combination of the garlic futures and a little bit of oversupply this season caused great fluctuation in prices,” he said.“The government needs to regulate the futures market and the best way to do this is to prohibit it completely,” he added.