Since the beginning of April, it has become apparent that the price of Chinese ginger has risen significantly. The price of the raw materials rose from ¥2.7 per jin to ¥4.7 per jin within two weeks, an increase of more than 70%. The price has stabilized recently with minor fluctuations.
“One of the reasons for the increase is last year’s low ginger harvest, which meant there was little stock. With 6 months to go before the new ginger from the north hits the market, 60% of the stock has already been sold. shortage of inventory drives up the ginger price. In addition, the price increase is probably also influenced by speculation on the futures market. The purchasing price of ginger at the end of last year was high, and with the current positive futures market developments, the price fluctuations come sooner,” said Ye Qiaowei, head of domestic and international ginger trading at Fujian Fresh Exchange Trading.
“The significant price increase is putting pressure on sales, with domestic sales lower than the same period last year. Although export sales are better than last year, international demand for Chinese ginger is expected to decline once ginger from Brazil and Peru enters hits the market in June. If the ginger price remains high, it will be difficult to meet market demand.”
“Take the European market as an example, where the price of a carton of 13 kg of ginger has risen from 19 euros previously to 25 euros now. Customers indicate that this is difficult to accept.”
In the short term, Ye expects that if ginger prices continue to rise, leading to difficult sales, there may be a significant price drop in September as growers deplete inventory to make way for new ginger. If the ginger price falls in the short term and growers accelerate their deliveries, a price increase may occur again in July-August due to insufficient supplies. “There are several predictions about the recent market direction, which is not clear at this time.”
As for how to handle the situation, Ye indicated that to avoid risks, they will only accept orders from customers who are willing to accept the price and confirm delivery once their current stock is sold.
Ye also shared information about ginger cultivation: “Brazil is reportedly expanding the ginger area and the quality of the new crop is good, which should increase their competitive advantage. On the other hand, China has started expanding the ginger area since last year ginger cultivation and production is expected to increase further in the next one or two years.”
In addition to the supply of ginger from the north, it is also the shipping season for white ginger from Guangxi and small yellow ginger from Yunnan.
For more information:
Ye Qiaowei
Company: Fujian Fresh Exchange Trading Co., Ltd.
Phone: +86 18760699693
