Garlic supply in North America is a tale of two markets. "There's retail strictly taking non-Chinese garlic and then there's the Chinese market," says Kian Fattahi with Global Farms Enterprises.
Garlic supply that isn't coming out of Asia is quite tight at the moment. "There wasn't as much garlic from Mexico and the quality out of Spain was quite mixed this year with high prices. So everyone's been waiting for Argentina to start," says Fattahi, adding that shipping will likely begin this week. Meanwhile, expectations that there was going to be more volume from Peru never came to be and that the region has largely finished production already "due to increased local consumption"
Domestically, there is some California supply available but those also have stronger pricing. Garlic from China has also seen very strong pricing due to increased freight costs, uneven arrivals, and shortage from other producing countries. "There hasn't been much Chinese garlic arriving on the West Coast to fulfill demand," says Fattahi. "A lot of this started when there were the East Coast port problems–ever since then, prices on Chinese garlic have been going up and they've stayed really high. That exacerbates things. If you're having a problem getting garlic from anywhere else, then everyone raises their prices accordingly."
Demand to pick up again
As for demand, the first holiday push pre-Thanksgiving has passed and that was as expected. For now, demand has softened though it will ramp back up again before Christmas and the January health resolution season.
Looking ahead, most of the garlic shipments imported to the U.S. are supporting programs or existing business meaning there isn't as much garlic for speculation. "It's a lot of money upfront and risky to bring just for speculation," adds Fattahi.
At the same time, along with higher freight costs, other challenges include the East and West Coast ports, which post-strike, still have some lingering issues. "There seems to be fewer routes to both coasts, and freight companies are increasing their prices. We're paying more than last year from Argentina to LA," says Fattahi. "Depending on the shipping line, prices into Miami have also increased and can be more of a challenge to get space, in the short term I expect these problems will continue and we'll probably see more increases on freight."
There are also concerns looming about President-elect Donald Trump's proposed tariffs–25 percent on imports on the day he's inaugurated, January 20th, but there are also the more recently proposed 10 percent tariffs on Chinese imports. "We just don't know if that's going to affect garlic, though typically they carve out a space for food because they don't want it hitting people's wallets," says Fattahi.
For more information:
Kian Fattahi
Global Farms Enterprises
Tel: +1 (323) 415-6000
[email protected]
www.global-farms.com