H1N1-fighting garlic, ginger see price spikes in China

The timing of this ginger demand increase coincides with supply shortages, effecting upward price pressures in a way that has speculators wondering about a potential repeat of the current demand hysteria over garlic. Garlic, also believed to have flu-fighting properties, has seen wholesale prices increase by as much as 1500 percent since March.

By comparison, retail ginger prices have increased just 85 percent in China in under a year. But a similar price spike may be seen in ginger as Chinese consumers and speculators begin to hoard the spice, commonly used in traditional Chinese medicine to treat colds and other ailments. The health benefits of honey and ginger in treating respiratory problems is well known.

Falling ginger prices over the last three years have contributed to current supply shortages, with many farmers switching to more profitable crops. With fundamentals firmly pointing to a sustained price increase, ginger producers and consumers are looking at a potential price surge.

 

Garlic has seen a similar pattern of shortage and price increases. David Anderson, a director with consulting and research firm GMC Group China, follows the agricultural market in China closely and is alarmed by the trend.

 

"It's quite incredible, with parallels to 'tulip mania' from the 1630s in the Netherlands. We've seen large numbers of speculators shifting money from mainstream assets, piling it into garlic in the hope of turning a quick profit," he said.