Chinese Dehydrated Vegetable Market Report.

Posted on 5 January 2011

Chinese Dehydrated Vegetable Market Report.Chinese Dehydrated Vegetable Market Report - December 2010

  • Garlic :
We made a new market survey over the last weeks to verify the current situation. Let’s recap first what happened over the last 12 months. In 2009 and 2010 fresh garlic prices were sky high and sold as if it was white gold. There was almost no dehydration made unless at very high prices and subject to prepayment. We noticed prices above 8.000 USD since July 2010. The big carry-over stocks of 2007 and 2008 were used throughout 2009 and 2010 to overcome the double crop failure. These stocks are now almost all sold off. What is left is dark brown flakes with high micro.
Right now we observed a weaker note and we analyzed if the dip is a temporary correction or if this can be a trend towards new crop? We observed the following fundaments :
- The fresh garlic crop was short and we believe that there is little fresh garlic available. The prices of fresh garlic are still very high and as a result, there won’t be any dehydration made till new crop in 2011. - There was a lot of trading in the period June till October 2010. Most of the overseas buyers have taken the short to mid-term positions to secure deliveries. The few parcels left from good old crop materials were all sold over the last 6 months. - There is hardly any good garlic flakes available for grinding and what is available will be picked up soon. We expect an empty market as from Chinese New year in February till August 2011. - There is still a considerable volume inferior quality available which are very dark brown flakes and we believe that these are not suitable for our European customers. The granules and powder made from these flakes are dark yellow to dark brown and have an off taste and flavor. The stocks are in commodity speculators hands who tend to sell these off now and shift their interest to cotton which is the new hot item in China. This explains the weaker note of the last weeks.
- The October planting of garlic for 2011 was generally perceived as a good acreage. - This confirms the weaker sentiment. It is too early to predict how the crop of 2011 will be. - We observed that some processors in Xinxiang are bleaching the brown flakes with H2O2 peroxide. The brown flakes become white and may be sold as premium quality at a discounted price. We warn our customers whenever cheap premium top grade flakes are offered at discounted prices, it may well be made from bleached garlic flakes. One can detect easily as the flakes hardly have taste or flavor and also the treatment results in a very low micro count and different density.
Our reading and conclusions after our market survey is that good standard and premium quality garlic is hardly available and is still offered at a very high price. The few good parcels left are offered now and the current dip may well be a good opportunity to cover forward as we expect this dip not to last for long. After Chinese New Year the market will be empty for good standard and premium quality.
We expect on the other hand that the garlic market can be disturbed by traders offering very dark brown garlic as standard quality and bleached flakes as premium quality at discounted prices. It will be very much a matter of being very selective and evaluating pre-shipment samples when buying in the first half of 2011. We recommend to take full coverage till new crop 2011 is available in September 2011.
We noticed prices for premium top grade in the range of 7.500-8.500 Usd/MT while good quality old crop standard qualities are now offered between 2.500-3.500 Usd/MT. Garlic offered below 2.500 Usd is a big question mark what you will get…
  • Bell Pepper :
The bell pepper crop is over. Volume ranges from 10.000-12.000 Mtonnes bell pepper dehydrated this year against a complete crop failure last year with only 3.000-4.000 Mtonnes. We can consider this year to be a normal crop size. However there was no carry-over stocks from last year and there was a heavy trading in the period August till October. We estimate that 50-60% of the crop is already sold. Prices remain firm in the range of 5.000-6.000 Usd/MT both for green and red bell pepper.
We like to inform that we can offer now also steam sterilized bell pepper and other dehydrated vegetables from 2 of our main vendors.
  • Carrots :
The Carrot crop failed this year and we estimate that only 50% of last year’s production will be dehydrated. Prices went up and we see quotes between 2.000-2.500 Usd/MT. This year China won’t be competitive in carrots.
  • Paprika and chilies :
Paprika is grown in the Nord-West of China in the Xinxiang Province while chilies are cultivated in different areas as Hebei, Tianjing and Shandong. The heart of processing takes place in Shandong and especially in the Qing Dao area. Both paprika and chilies had a difficult season with cold weather and rain during harvesting. We observed high moisture and mold in the pods coming in from the fields. It will be a matter of monitoring carefully the risk of aflatoxins and mold. Prices are moving up quickly.
We hope that this report can help you making the right decisions moving forward. Our CSS team can help you making these important decisions. We selected and audited the best suppliers in China. We have factory based inspectors paying attention to the quality of the products through a unique inspection scheme. After processing, we take samples and send to an accredited third party lab for testing prior to shipment. We have a warehouse in Qing Dao from where we can offer mixed containers. We offer this service as part of our standard trading concept.
Best regards Brian Tan

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