Chinese Garlic Farmers at the Mercy of Speculators as Prices Plummet
While Chinese consumers continue to struggle with escalating inflation due to soaring food prices, garlic isn’t on the list. Farmers in Shandong Province are thus losing money because of drastically falling garlic prices, and observers say it’s because of a lack of market information and a poorly regulated industry in garlic futures.
Hardest hit is Jinxiang County in Shandong, China’s largest garlic production and trading base and a major global planting and processing center.
Just as pork prices have skyrocketed this year, last year garlic prices also jumped to a new high and were once even higher than pork, according to Shandong TV’s report on July 12.
Encouraged by last year’s high profits, many garlic farmers planted large crops, only to see garlic prices fall all the way to the bottom.
“After the new garlic crop went to market in May the price kept falling. Garlic farmers will lose 1 yuan on every 500 g of garlic produced, and therefore will suffer huge losses this year,” Wang Bin, a Jinxiang County garlic farmer told The Epoch Times on July 17.
Shandong TV reported three garlic famers from Xieji Township, Juye County in Shandong Province recently attempted suicide. Two were rescued, one died.
Wang Wei, a garlic grower from Jinxiang County told state media Xinhua the price of garlic fell below cost, “At this time last year the price of 500 g garlic was 3.5 yuan. But now it is only 0.7 yuan. But the cost to produce 500 g of garlic has increased by 40 percent to 1.7 yuan.”
Lack of Information
Shandong’s garlic crop has only increased by 20 percent this year, so supply-demand dynamics are not the reason behind the rapidly falling price, Professor He Qiwei, a Shandong Province vegetable consultant, told Shandong TV.
Professor He feels the withdrawal of speculative funds and wholesale suppliers’ waiting for new development is what’s driving the price down.
Nobody knows for sure exactly how much garlic has been produced this year.
“Information on garlic production, processing, storage and market needs is extremely delayed and blindly producing more garlic has resulted in the price fluctuation,” Professor Liu Shiqi from Shandong Agricultural University told China Business.
The lack of official statistics has made it hard to gauge supply and demand of garlic in the market, Li Jingfeng, vice chairman of China Garlic Association told Xinhua.
Jinxiang county resident Mr. Liu, who is familiar with the garlic business, agreed. He said the authorities have not only failed to provide garlic farmers with timely and concise information, but also prevented non-governmental agencies from helping garlic growers protect their rights.
Speaking to The Epoch Times, he pointed out a bizarre phenomenon: “Although a commodity, the garlic price has been fluctuating 10 times more than the stock market in recent days. The largest price gap in one day sometimes reached as high as 40 percent.”
Mr. Liu feels the regime’s lack of responsibility to Chinese farmers regarding garlic futures trading violates farmers’ rights.
He said: “Chaotic information regarding garlic is constantly circulated in the futures market, which misled and hoodwinked farmers, yet the authorities made it worse by not releasing any accurate information.”
Mr. Liu said that a law should be created to forbid garlic futures trading in China.
“Last century, there was an ‘onion futures market regulation’ which prevented onions from being traded in the futures market in the United States. When American farmers’ rights were violated, legislators protected farmers. But in China, the people’s representatives do not dare say a word in favor of the farmers.”
Read the original Chinese article.