Looking at the conditions for Chinese garlic export to the European market, FOB prices are estimated between 1,100-1,200 USD per ton, which is an increase of around 40%.
The garlic export industry is facing a number of challenges at the moment, including a shortage of shipping containers, rising shipping prices, and the ongoing pandemic in overseas markets. The impact of the Covid-19 pandemic in particular is severe.
"The main problem is the unavoidable lockdown. Many export companies suffer disastrous losses because of lockdown measures and this has a terrible impact on the general market conditions. In many cases importers do not pick up their orders. Still, even under these circumstances many countries across the globe recognize the disinfecting properties of garlic as well as its benefit for the immune system, which is why the export volume has never been bigger." This is according to Mr. Steven Zhou of Jinxiang County Hong Teng Fruit and Vegetables Co., Ltd.
Hong Teng Fruit and Vegetables was established in Mamiao Village in Jining, Shandong. The company manages the production and retail of a number of garlic varieties, including Cangshan 4-6 clove garlic, Yunnan single-bulb garlic (raw material for black garlic), black garlic, Jinxiang local pure white garlic, mixed garlic, and Henan garlic.
According to Mr. Steven Zhou: "We have three subsidiary companies with European GAP certification. The overall surface area of our GAP-certified plantation is around 6,667 hectares, and we can supply around 150,000 tons of garlic. Most of the countries who require GAP-certification for the garlic they purchase are either in Europe and North America, or Indonesia. We mainly supply Indonesia. We export an annual volume of 70,000 tons to the Indonesian market."
"We also sell our garlic products in the domestic market, but in the export market we have several brands that are aimed at different markets. We mainly sell under our Hong Teng brand, but we also sell our garlic under Sanyi Xiang (black garlic brand), Baite (for the Malaysian market), and Sun Wukong [Monkey King] (for the Vietnamese market).
"We also have storage and distribution centers in many Southeast Asian countries. As for domestic trade, we primarily focus on Haijixing Market in Shenzhen with additional sales in other areas of Guangdong and Hong Kong," said Mr. Steven Zhou.
Chinese export of garlic has primarily focused on Southeast Asia in recent years. The import volume in Indonesia is the largest among all. In 2020 Indonesia imported more than 500,000 tons of Chinese garlic (China annually exports around 1.9-2 million tons of garlic). However, the Southeast Asian market is quite price sensitive. Their requirements for product quality are not that strict. That is why the profit margin in the Southeast Asian market is relatively small.
"That is why we hope to develop our share of high-end European and American markets. We have enough capital and our product quality is good enough to meet the requirements of large-scale overseas companies," said Mr. Steven Zhou. ■