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Spain: Garlic prices have been below production costs

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While the two previous garlic campaigns were very positive for the sector, the current season has not started well. “We needed campaigns like those, with decent prices for the product, although things have become more difficult this season due to the increase in China’s garlic production. It shouldn’t be forgotten that, although we stand out from China in terms of quality, the Chinese dominate the markets in terms of volume and therefore have a huge influence on prices, which have been falling since the start of the campaign,” explains Juan Carlos Navarro, general director of Big Garlic. “The first garlic prices in Spain have in many cases stood below the production costs. We expect this trend to reverse after the summer.”

Exponential growth of Spanish exports in 10 years

According to the exporter, in the Chinese market there is no clear connection between supply and demand, since in recent years the product has come to be in the hands of large speculators, many of them from other sectors, such as real estate or coal. “The market has lost that innocence and is no longer influenced by supply and demand.”

Big Garlic handles about 10 million kilos of garlic taking into account both its own production and the one supplied by contracted growers. They work with all varieties of Spanish origin, such as white garlic, CastaƱo and Purple of Las PedroƱeras, as well as white and violet Spring. Additionally, they also import garlic from other origins at the request of their customers during the off-season.

Exponential growth of Spanish exports
The growth of Spanish garlic exports has been exponential over the past 10 years, going from 35% to more than 85%, as explained by Juan Carlos Navarro, general director of Big Garlic. Most of the Manchegan company’s garlic is intended for export, with shipments going to Europe, North America, South America, Africa and Australia, either for supermarket chains or for wholesalers working for distribution chains.

“Spanish garlic is becoming more and more popular abroad and its reputation and image are improving, both for the qualities of its varieties and for its food safety, stability and service guarantees compared to other origins, such as China. In fact, there are markets that are reducing their orders from China in order to import Spanish garlic, even though the latter is more expensive. I think there is potential for Spanish garlic in all those markets that have yet to be explored, since even if purchases are made based on prices, as is the case of Chinese garlic, there are always customers looking for something different.”

According to the exporter, garlic consumption is increasing globally because of its multiple uses in cooking, as well as the medicinal properties of allicin, an active component in garlic that acts as a hypoglycemic agent tackling diabetes, as well as a potent natural antibiotic. It is worth noting that scientific studies support the fact that Spanish garlic contains more allicin than the rest of the commercial varieties in the market; a factor that contributes to increase its popularity. “It is a garlic with a longer shelf life, although the yields per hectare are lower than those of other varieties. That is one reason why we continue to work on the constant improvement of the seed.”

Regarding the importance of brands in the garlic sector, Juan Carlos Navarro believes that “behind a reputation there must be a philosophy, with a job well done in terms of quality differentiation, food safety and social responsibility; something more and more clients increasingly appreciate.”

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