Garlic Market Faces Price Shock Amid Oversupply: Can Policy Rescue Farmers?

This season, the garlic market in India, particularly in Gujarat’s key growing hubs like Rajkot, has encountered considerable turbulence. Despite a bountiful harvest and excellent crop quality, farmers are grappling with some of the lowest prices witnessed in recent years. At the heart of the issue lies a classic imbalance: while output has surged beyond projections, domestic demand has lagged, and stable exports have failed to materialize. As a result, prices have crashed dramatically — with high-quality garlic in Gondal mandi slipping to as little as $0.10 per kg, and average prices hovering near $0.18 per kg, well below last year’s already modest levels.

Storage challenges and moisture from the arriving monsoon have exacerbated farmers’ woes, compelling forced sales at loss-making rates. Many growers now fear a long-term impact, as ongoing financial strain may prompt them to cut acreage next season. While industry voices call for intervention, such as government procurement or export support, concrete steps remain elusive. How the market adjusts — and whether policy makers move rapidly — will determine the trajectory for growers and buyers alike in the coming months.

📈 Garlic Prices: Key Exchanges & Recent Trends

Product	Type	Origin	Location	Delivery Terms	Latest Price (EUR/kg)	Last Week (EUR/kg)	Change (%)	Sentiment
Garlic	Powder, Organic	India	New Delhi	FOB	6.59	6.59	0.00	Stable/Soft
Garlic	Fresh	Egypt	Cairo	FOB	0.98	0.98	0.00	Stable/Soft

🌍 Supply & Demand: Oversupply Dominates, Exports Falter

• India’s Output: Gujarat saw a bumper crop this season, significantly above the five-year average.
• Market Glut: Surplus stock overwhelmed local markets, with arrivals peaking post-harvest and overwhelming demand.
• Demand Weakness: Domestic consumption has grown only modestly; lack of new export contracts left much of the supply stranded domestically.
• Farmer Response: Many growers delayed sales in hope of price recovery; however, storage costs and monsoon risks prompted distressed liquidation.
• Year-on-Year Comparison: Previous season’s peak rates ranged $0.36–0.42/kg; current season’s average sits at $0.18/kg.

📊 Market Fundamentals & Key Drivers

• Inventories: Large on-farm and trader inventories persisting; projected carryover may depress prices in coming months.
• Speculative Positioning: Minimal speculative activity, given lack of futures markets; sentiment remains bearish in physical trade.
• Government Activity: No significant procurement or minimum price intervention reported as of now. Calls for support growing louder.
• Export Channels: Lack of aggressive export policy or new market access stymied potential relief.

🌦️ Weather Outlook & Crop Impact

• Monsoon Progress: The southwest monsoon is advancing over Gujarat and adjoining states. Rainfall is close to the normal range, but higher humidity may damage stored garlic not sold quickly.
• Short-Term Risks: Increased storage losses are expected if garlic is not moved swiftly to market or preserved in cold storage.
• Production Outlook: If prices do not recover, acreage may drop for the next growing season as farmers switch to less risky crops.

📉 Global Production & Stock Comparison

Country	2023/24 Production (Est.)	2022/23 Production	Stock/Inventory Change
China	~24 million MT	~22 million MT	Moderate Increase
India	~3.1 million MT	~2.8 million MT	Significant Increase
Egypt	~700,000 MT	~710,000 MT	Stable/Minor Decline
EU	~450,000 MT	~440,000 MT	Stable

📆 Trading Outlook & Recommendations

• 🔍 Producers: Consider selling remaining stocks before further quality deterioration; leverage any cold storage available to stagger sales if possible.
• 📦 Traders: Monitor for government intervention signals; stay alert to price volatility if export channels reopen or if unexpected weather strikes.
• 🌍 Exporters: Seek emerging market opportunities in Southeast Asia and the Middle East, where supply gaps may open due to weather or logistics disruptions.
• 📊 Buyers: Favorable buying window ahead as supply remains ample and prices are at multi-year lows.
• 💡 Policymakers: Short-term procurement or storage subsidies urgently needed to prevent long-term agrarian distress and area shrinkage next season.

⏭️ 3-Day Regional Price Forecast

Market/Exchange	Current Price (EUR/kg)	3-Day Forecast (EUR/kg)	Trend
New Delhi (India, Organic Powder)	6.59	6.59 – 6.60	Flat
Cairo (Egypt, Fresh)	0.98	0.97 – 0.98	Slightly Soft
Rajkot (India, Fresh Mandi)	~0.18	0.16 – 0.18	Weak

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