Unprecedented high garlic prices show no signs of easing up

Unprecedented high garlic prices show no signs of easing up anytime soon, grower-shippers and importers said.

“In our 61 years of business, we have never seen such a market,” said Louis Hymel, director of purchasing and marketing at Orlando, Fla.-based Spice World Inc.

Prices will likely stay at their current levels through the Chinese and California seasons, which don’t end until May, said Paul Auerbach, president of Maurice A. Auerbach Inc. South Hackensack, N.J.

“The perception is that Chinese garlic is the cheap item, but it’s three times higher than normal,” he said.

On Sept. 7, 30-pound cartons of netted 3s from China sold for $34 on the Los Angeles terminal market, up from $10-11 last year at the same time, according to the U.S. Department of Agriculture.

A 30-pound carton of white California garlic at the Atlanta terminal market on Sept. 9 was $53.50-54.50, $20 more than at the same time in 2009 and $30 more than in 2008.

Prices will likely stay at current levels until at least Chinese New Year Feb. 3, said Jim Provost, who imports garlic as president of West Grove, Pa.-based I Love Produce.

“Chinese garlic prices are at historically high levels we’ve never seen before,” Provost said. “It’s been a very unusual year.”

Fresh garlic prices in recent years have seen double-digit growth, largely due to shorter supplies and quality concerns from China, said Maria Brous, director of media and commodity relations for Lakeland, Fla.-based Publix Super Markets Inc., which buys garlic from California, Argentina and Mexico.

“This year exports (from China) have come almost to a complete stop,” Brous said. “With less exports and an already tight market in the U.S., prices have increased across the board.”

According to the USDA, as of the second week of September, season-to-date imports of Chinese garlic have dropped 33%.

A garlic buyer for a large supermarket chain in North Carolina, speaking on condition of anonymity, said Sept. 9 that not only does he expect high prices to stay, but they will likely increase.

“They (prices) just go up from here,” he said, attributing the high prices mainly to the market situation with Chinese garlic. “I don’t think they’re going down anytime soon.”

Gilroy, Calif.-based Christopher Ranch is taking care of its long-term customers, said Patsy Ross, vice president of marketing. Beyond that, the company is struggling to meet continually growing demand.

“It’s hard to turn people down,” Ross said. “It’s definitely a year where you wish you would have planted a little bit more.”

There are several reasons for the extremely strong market, Hymel said, but at the top of the list is a big shortage from industry leader China.

China is especially short this season on the large sizes favored by U.S. and European customers, Auerbach said.

In addition to the smaller Chinese crop, growing worldwide demand for garlic also is playing a role in the strong markets, Auerbach said. California shippers, for instance, are seeing stronger demand from Mexico and other export markets, he said.

In the first half of September, Spice World was shipping product from California and China, Hymel said.

Hymel reported excellent quality in the domestic crop this season.

“Our California crop is excellent this year — one of the nicest in years,” he said.

The company will ship California-grown from cold storage well into 2011, and will add Argentinean product in January, Hymel said.

Auerbach, which also will add Argentinean product around the end of the year, hasn’t seen such anticipation for Argentinean garlic in some time, Auerbach said.

When the Argentinean deal winds down, Spice World will supplement its Chinese and California supplies with product from Mexico — first from central Mexico, then from the Baja peninsula, Hymel said.

Shipments from Argentina and Mexico could help shippers better meet demand, Ross said, but there are no guarantees.