Garlic market creates millionaires in China
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The soaring price of garlic may be cooling, yet the profits generated have made millionaires of businessmen and speculators, and the market for garlic remains uncertain going forward.
In previous years, garlic's price was very low; however, in the last two years, and especially since last November, prices have been increasing with an unexpected speed.
According to China's China Businss News, the price hike has created a new breed of millionaires in Jinxiang County, the coastal province of Shandong, where China's largest garlic plant is located.
Mr. Zhang, a grower, said he had usually lost money planting garlic because the price was only about 0.2 yuan per kilogram. Now he's been selling his garlic for 3 yuan (US$0.4) per kilogram and makes a strong profit.
Businessmen and speculators who rushed to buy before September of last year with garlic at its lowest price, 0.2 yuan per kilogram, easily became millionaires, even billionaires, because prices rocketed in most Chinese cities to 9 yuan per kilogram. Buyers can benefit due to the fact garlic doesn't spoil quickly, so it's possible to purchase and hold until prices rise.
Compared with the previous months, garlic's price has dropped, yet the wholesale price of 4.4 yuan (US$0.6) per kilogram is 6 times as high as the previous year's price of 0.7 yuan (US$0.1) per kilogram.
"The price of garlic finally dropped a little," said Mrs. Zhou, who shops for garlic for her family, "The last few days people had to pay more for a kilogram of garlic than pork."
Analysts said reduced supply triggered the Chinese garlic rally. Storage costs along with weaker demand during the global financial crisis forced many Chinese farmers to abandon their garlic plants.
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