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Importer expects U.S. prices to top $50 for Argentine garlic

by Rand Green | December 21, 2009
The year 2009 has been "a historic year in the garlic industry" with a demand-exceeds-supply situation that has pushed prices for both domestic and imported product to higher levels than anyone has seen in a long time, according to Jim Provost, president of I Love Produce, a grower, importer and marketer of fresh garlic, ginger and specialty produce based in West Grove, PA.

The price jump is largely a consequence of a 50-percent reduction in garlic plantings in China, a factor which has also given a boost to California's market share, Mr. Provost told The Produce News Dec. 17.

"Heading into the next new-crop garlic, which is out of the Southern Hemisphere, buyers all over the world have been flocking to Argentina to try to secure a supply in this tight supply market," he said. However, Argentina also has a reduced crop for the coming season. As a result, he thinks it likely that "in the next 30 to 45 days, we are going to see a garlic market in the United States of $50 or better" for 30-pound bulk cartons of whole fresh garlic.

"I'm sure it has happened before," he said, "but it has been over 10 years since something like that has happened."

The demand will "continue to be strong into the Mexican season," Mr. Provost said, adding, "I don't expect that supply, which isn't usually a major factor, to alleviate the situation greatly." Even after California and China start with their new crop "in the spring of 2010, the garlic will continue to be short," although "maybe not quite as short as it has been this year," he said.

In garlic cultivation, it generally takes two years to bring about a significant increase in production because of the need "to create the seed to start replenishing the supply back to where it was," he said. "For that reason, there will be more garlic" beginning in spring 2010 "but not enough to flood the market or bring the prices down to where they were two years ago." He expects that "for the foreseeable future, the garlic market will remain strong."

At I Love Produce, "we've made several trips [to Argentina] to secure our supply," Mr. Provost said. He expects to receive the first arrivals from Argentina sometime around Jan. 18-31. Argentina will probably finish shipping early this year because of the reduced crop size, he said, "but we want our customers to know that both in the conventional and organic, we will have supplies to cover ourselves until the new-crop California [garlic] starts."

The quality of the Argentine garlic is excellent with "good size and color," he said. "The good news is that if you are paying a lot of money for the garlic, you are at least going to get a nice box of garlic."