The cost of Chinese garlic is rising due to complicated logistics

“In late December, due to the emergence of the Red Sea shipping crisis, shipping companies announced that they would increase sea freight rates. Many customers hoped to place orders for shipment before freight rates rose, which led to a surge in garlic orders at that time, especially orders from the European market.” Wendy Qin (Ms. Qin Bowen) from Shandong Xiangsheng Import and Export Co., Ltd. introduced.

The Red Sea shipping crisis has led many shipping companies to say they will reduce traffic in the Red Sea channel or choose to take detours. The shipping of Chinese garlic to the European market is directly affected. “It is understood that the ship will go around the Cape of Good Hope in South Africa to Europe. Starting from January 1st, depending on the conditions of different ports, the freight cost will increase two to three times compared with before, which is equivalent to an increase of more than one hundred US dollars per ton of garlic. Shipping time increases by 15-20 days.”

“After the garlic market experienced continuous price increases for most of last year, there was a slight adjustment at the end of October and early November. After that, the cost price of garlic did not continue to rise and has remained stable to this day. However, after the freight increased, the cost became close to the price peak before October, so many customers wanted to place orders for shipment before the price increase.”

“After the freight rate increased on January 1 this year, garlic orders dropped significantly, which was less than the same period in previous years. The high price made customers wait and see. Shipping prices are changing rapidly at this stage. We can only quote a reference price for our customers. The specific price will not be known until the shipping space is confirmed.”

According to Wendy, the ship berths to Europe are currently tight. The ship berths before mid-January are full, and prices are still rising after mid-January. “It is estimated that prices may fall by early to mid-February, as rising freight rates have slowed order demand and weak demand for shipping may cause shipping companies to readjust prices.”

In addition, the price of garlic exported to Central and South American markets has also increased due to the recent drought in the Panama Canal, which has affected shipping.

Shandong Xiangsheng Import and Export Co., Ltd. is mainly engaged in the export and sales of garlic from Jinxiang and other producing areas in Shandong. The company will participate in the 2024 FRUIT LOGISTICA in Berlin from February 7 to 9. The booth number is Hall26 C61-12.

Tags: China, garlic