The bigger demand and higher prices for ginger earlier this year has now shifted to lower demand and prices from the Northern Hemisphere amidst good summer weather. Peru has stepped up to meet the demand, with growers and exporters foreseeing that lower ginger stocks later in the season will lead to higher prices. China is in their peak season of ginger exports. The ginger market demand remains strong for them, but soaring shipping costs have become a challenge. The attacks in the Red Sea and delays in resuming navigation in the Suez Canal, have caused significant disruptions for Chinese ginger shipments. Brazil is shipping more ginger to North America, particularly the U.S. who just received the first containers. Brazil, together with amply supply from Peru, is providing good competition for Chinese ginger. Supply in North America remains balanced with the demand. In the South African local market, ginger demand is low, dropping by 30%. However, imports are still coming in mostly from China and Vietnam.
Italy has stable demand, while organic ginger is more expensive. Supply comes from Peru, Brazil and China. France has Brazilian supply coming in via airfreight, with stable consumption. In the Netherlands, the cost of Chinese ginger is currently higher than the market price. Brazilian ginger is also arriving steadily. Ginger is becoming increasingly popular in Germany. The import volume almost quadrupled in ten years. The main supplier is China, followed by Peru.
Peru: Lower ginger stocks later in season will lead to higher prices
The ginger exports from Peru started very early with high demand and prices from many markets. The summer weather in key markets of Europe and the U.S. has led to a decrease in demand for now. The slowing in demand has led to a reduction in prices. Growers and exporters in Peru note that due to an early start and sending of supplies to meet the early demand, there will likely be less supply available later in the season.
An exporter notes, "During recent weeks, due to summer in the Northern Hemisphere, we have been operating at 50% of our capacity. We expect a difficult campaign in terms of high prices for the remainder of the season because stocks in fields have been decreasing week by week. It is almost a fact that most exporters will have supply problems at the end of the season." He notes customers with programs will be serviced from Peru.
Brazil: More suppliers, increasing supply
The supply from Brazil has increased in recent years as more growers of other commodities turn to ginger growing to meet the rapidly growing demand since the pandemic. However, importers in the U.S. note, it makes a mess on the buying side having to shift through the new suppliers.
The rush in Brazil to meet the demand has led to challenges of immature ginger being harvested, especially in the early part of the season. Supply will be strong into September.
China: Market demand remains strong, soaring shipping costs become a challenge
It is the peak season for ginger exports. While overseas market demand for ginger remains stable, rising shipping costs are putting considerable pressure on suppliers and merchants.
The current market surplus of ginger is about 37%-40%. The export situation from July to September is influenced by several factors. The ongoing attacks by the Houthi's in the Red Sea, along with predicted delays in resuming navigation in the Suez Canal, have caused significant disruption. The continued chaos in the Red Sea has exacerbated global shipping capacity shortages and port congestion, leading to soaring container shipping prices. Currently, shipping to major European ports costs as much as $9,000 per container.
The current price of ginger at the origin is ¥8.4-8.8 per kilogram. July typically sees relatively stable fluctuations in the ginger market, with stable summer consumer demand and a balanced supply. The introduction of Brazilian and Peruvian ginger will also impact China's ginger exports. However, weather conditions may affect ginger growth and storage, potentially causing market price fluctuations. In August, temperature changes and shifts in eating habits may increase ginger demand.
Additionally, fewer growers and storage companies could drive prices up. In September, with important festivals like Mid-Autumn Festival and National Day approaching, ginger demand will further rise, particularly in the food processing and catering industries, often driving prices higher.
The international demand for ginger is stable but varies across different countries and regions. Products must meet diverse customer standards. Additionally, international trade dynamics and exchange rate fluctuations indirectly impact exports.
North America: Strong imported ginger volumes
There's a greater supply of Brazilian ginger this season than last year, when there was lower production and higher prices. In turn, last year's strong pricing encouraged more growers to produce ginger this season. Across the industry, some shippers began shipping younger ginger earlier.
Peru is also shipping an ample supply of ginger to the U.S. this season and is shipping more volume than Brazil. (Peru is also a key supplier of organic ginger to the U.S. - a market whose organic regulations aren't as stringent as Europe's are.) China is also steadily shipping ginger to the U.S. As for demand, it's stable and balanced with supply.
Looking ahead, greater volume is anticipated from Brazil until September when the supply comes down somewhat and pricing may strengthen then too. Right now, with high and steady offers from Peru, China and Brazil, pricing is also anticipated to stay steady. However, shipments of ginger are still being sent by air, which could impact pricing.
South Africa: Low market demand
Local ginger growers in Limpopo and Mpumalanga are harvesting their rhizomes at the moment, but purchase power is weak: at the retailers, notes a grower, demand dropped by almost 30%. Municipal agents confirm that ginger demand is lukewarm. The current cold and rain will probably also depress ginger demand.
Despite the local harvest, importers are still bringing in imported ginger (from China and Vietnam, mostly) and FreshPlaza is told that a big amount has recently arrived in Durban. Imported ginger will push down prices and force local suppliers to curb the volumes they send to the market.
Prices for class 1 ginger are R80 to 85 per kg (€4.00-4.30), and R60 to 70 (€3.06-3.60) for a mix of class 1 and class 2. Because it's early in the season, farmers aren't lifting everything and therefore class 3 ginger is scarce on the market.
Italy: Stable demand, organic ginger more expensive
People like ginger, especially when it is organic. The director of a large marketing structure in northern Italy says that all the retailers want the product. Not very large quantities, of course, but they demand continuity of supply. The company deals in organic, so it imports organic ginger from China and South America under equivalence, meaning the product is certified organic to the same European parameters. And while wholesale prices for traditional ginger have been quoted at €3.50-4.00/kg in recent days, organic ginger is more than a third more expensive. But consumers do not pay too much attention to the price, partly because they buy very little of it, and partly because they consider it a health food on a par with medicine.
A Sicilian trader adds: "We import ginger from Peru, but there is quite a lot of international competition, because at certain times of the year the competition is more active, thanks to production from different areas of the world, such as China and Brazil. In the main European wholesale markets, the price has been between €3.50 and €4/kg recently. However, there have also been peaks of €5-5.50/kg in recent months.
France: Brazilian supply coming in via airfreight, stable consumption
Importers are working with ginger from Brazil, which is coming in by plane, because it is much better quality. They don't do a lot of volume, but the consumption is quite stable since the beginning of the year, as well as the prices. There is very little increase from suppliers sometimes, but no incidence on consumer prices.
Netherlands: The cost of Chinese ginger is currently higher than the market price
Traditionally, ginger sales slow down somewhat during the summer. "Chinese ginger continues to arrive, but currently its cost price is higher than the market price. Additionally, there are quite a few containers exceeding Maximum Residue Limits (MRL). The transportation costs from China to Europe have also become very expensive, averaging between 10,000 to 11,000 euros per container," explains a Dutch importer. "Brazilian ginger is also arriving steadily. The large number of containers in Brazil and Peru results in relatively low transportation rates to Europe. Some customers prefer Chinese ginger, while others prefer Brazilian. Both origins are being sold in the market for around 2 euros per kilogram."
Germany: Import volume almost quadrupled in ten years
Ginger is becoming increasingly popular in Germany. According to the Federal Statistical Office (Destatis), almost 31,600 tonnes of ginger roots worth around 74.6 million euros were imported into Germany in 2021. This was 31% more than a year earlier, when just over 24,100 tonnes were imported. The import volume has risen almost continuously since 2012 and has almost quadrupled in ten years: in 2012, a good 8,200 tonnes of ginger worth around 14.4 million euros were imported.
The most important country of origin of ginger for the German market is China: in 2021, a good 16,500 tonnes of ginger roots were imported from China. This corresponds to a market share of 52%. A further 21% of ginger imports came from Peru (6,600 tonnes).
Next week's topic: Potatoes