Source: Chinese Academy of Agricultural Sciences
[Introduction] The inventory of garlic in cold storage is an important monitoring indicator of garlic market supply, and the inventory data affects the market change of garlic in cold storage under the long-term trend. In 2022, the inventory of garlic harvested in summer will exceed 5 million tons, reaching a historical peak. After the arrival of high inventory data at the beginning of September, the short-term trend of garlic market in cold storage will be weak, but not significantly reduced. The overall mentality of the depositors is good. What is the future trend of the market?
At the beginning of September 2022, the total inventory of new and old garlic will be 5.099 million tons, an increase of 14.76% year on year, 161.49% more than the minimum warehousing amount in recent 10 years, and 52.43% more than the average warehousing amount in recent 10 years. The garlic inventory in cold storage in this production season has reached a record high.
1. In 2022, the area and output of garlic harvested in summer increased, and the inventory of garlic in cold storage reached a record high
In 2021, the autumn planting area of commercial garlic in the north will be 6.67 million mu, and the total output of garlic harvested in the summer will be 8020000 tons in 2022. The planting area and yield increased and approached the historical high. The total output is basically the same as that in 2020, with an increase of 9.93% compared with the average value in recent five years.
Even though the supply of garlic is relatively large this year, some entrepreneurs have inferred that the inventory of new garlic is more than 5 million tons before it is put into storage, but the enthusiasm for new garlic acquisition is still high. At the beginning of the production of garlic in the summer of 2022, many market participants actively went to the market to get the goods after completing the basic information research. The warehousing and receiving time of new dry garlic in this year was ahead of the previous two years. At the end of May, the new garlic was not completely dried. Domestic market dealers and some foreign storage providers successively came to the market to get the goods. The centralized warehousing time was from June 8 to July 15.
2. Low price attracts storage providers to actively enter the market to receive goods
According to relevant reports, the main driving force supporting the warehousing of newly dried garlic this year is the low price advantage of garlic this year. The opening price of summer garlic in 2022 is at the middle level in the past five years. From June to August, the average warehousing purchase price of new garlic was 1.86 yuan/kg, a decrease of 24.68% compared with last year; It is 17.68% lower than the average value of 2.26 yuan/jin in recent five years.
In the production season of 2019/2020 and 2021/2022, the cold storage in the year of high price receipt in the new period suffered a lot of losses, and the average warehousing cost profit margin in the production season of 2021/2022 reached at least - 137.83%. However, in the year of 2018/2019 and 2020/2021, the cold storage garlic produced new low price goods, and the profit margin of the average warehousing cost of the original inventory in 2018/2019 reached 60.29%, while in the year 2020/2021, when the historical highest inventory was close to 4.5 million tons before this year, the average profit margin of the original inventory of cold storage garlic was 19.95%, and the maximum profit margin was 30.22%. Low price is more attractive for storage companies to receive goods.
In the production season from June to early September, the price first rose, then fell, and then rebounded slightly. Against the background of relatively low supply increment and opening price, most storage providers this year chose the point near the psychological price to enter the market, always adhering to the principle of low price acquisition and high price not chasing. Most of the depositors did not expect the profit margin of cold storage garlic to be high. Most of them said that the profit margin would be about 20%, and even if there was no chance of profit exit, they could afford to lose even if the amount of capital invested in storing garlic was small this year.
3. The reduction expectation supports the storage companies' bullish confidence in the future market
For the time being, it is expected that the planting area of garlic planted in the autumn of 2022 will decrease, which is the main driving force for the storage companies to choose to hold on to the goods. The domestic market's demand for cold storage garlic will gradually increase around September 15, and the incremental demand will boost the confidence of the storage companies to participate in the market. In late September, all producing areas entered the planting stage in succession. The gradual implementation of the news of seed reduction in October will strengthen the confidence of the depositors. At that time, the price of garlic in cold storage may rise.
