The price points associated with purchase of garlic witnessed a drastic low in the previous year. There was a confirmed price hike in August last year, but apart from that, the overarching trend was far away from the ideal situation. Going forward, anticipations point that garlic’s price may witness a considerable rise in this year, as the overall surface area dedicated for garlic plantation went through a phase of decline last year.
This decline can be attributed to multiple reasons. One among them being the sluggish entry of young people in the garlic industry space. Garlic cultivation is a strenuous task that involves a lot of energy as well as time. There are abundant number of old farmers engaged in garlic production, which is not going to yield any significant result and there are no significant demographic of young people making a breakthrough in the industry.
Mortgages do form a significant risk factor. Farmers who remain involved in their own lands have to invest a large lump of money for garlic production. Farmers often obtain a mortgage on their lands prior to the process of garlic cultivation. In line with this, the transition of large farms toward crops with price stability has become highly evident. This is one of the prominent reasons that the overall surface area meant for garlic production witnessed a drastic decrease last year.
There was an extreme instability in the garlic price points in the year 2018. The overarching trend was heading downwards and in some regions garlic had become unmarketable, which implied wastage of a lot of garlic that was left to rot. However, the data point to abundance of garlic left in storage. The surface area meant for garlic plantation witnessed a continuous decline in the year 2018, which reinforces on the fact that the supply volume in the year 2019 will be relatively smaller this year as compared to the previous one, and again the price is likely to climb up by a considerable margin.
There are people who anticipate that the garlic production volume is only foreseen to shrink by a considerable margin if and only if the surface area witnesses a decline across China. Subsequently, the price may also rise significantly in 2019.
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