China is currently in the middle of the ginger harvest. Ginger prices remain high in China and exporters are asking themselves the following question: how long can this price boom continue?
Due to several factors, including the aftermath of the pandemic and adverse weather conditions, Chinese ginger export prices have stunned the market and resulted in significant losses for many exporters. According to data from China’s Ministry of Commerce, ginger prices at the prominent Beijing while last year they fluctuated between 3.3 and 5 RMB (€0.42 and €0.64).
“We have been extremely cautious in the first half of 2023,” explains one exporter. “The rapid increase in purchasing prices forced us to keep as small a stock as possible, just enough to maintain minimum orders and reduce price risks. Many packing stations even opted for a temporary suspension of activity to limit losses. The sharp increase in input prices not only affected exporters’ profit margins, but cash flow management. Those who continued to fulfill orders had to explore alternative strategies to maintain financial stability.”
Due to the substantial increase in prices in China and a less vibrant international market, Chinese ginger exports fell 45.28% from January to July compared to the same period last year, China Customs reports.
Wang Xiaohai, chairman of the Fengyang Farmers’ Specialized Cooperative, is optimistic about several factors. Favorable weather conditions have boosted ginger cultivation and the prospect of higher yields has prompted growers to increase their investments in ginger cultivation.
However, domestic ginger prices remain high. On October 9, the wholesale price in Beijing Xinfadi was about 17 RMB (€2.16) per kilo. In a supermarket in Shanghai, 300 grams of ginger cost 9.90 RMB (€1.26).
“We are careful with our ginger supply,” said Yao Changfeng, director of Onedayone Group Yantai. “In my opinion, current high prices are not supported by strong demand. They are simply following the momentum of previous price increases, driven by supply and demand imbalances. The ginger currently traded on the market is largely made up of last year’s stock The new ginger harvest is expected to hit the market in November and then we expect a correction in prices.”
Rising ginger prices have attracted countless speculators looking to make a profit from buying and selling ginger. “There are too many people trying to get a piece of this pie, and many of them lack expertise in quality assessment and good storage practices,” Yao said.
For more information:
Maggie Peng
Onedayone Group
Tel: +86 187 17865462 (China)
Maggiepeng@onedayonegroup.com