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India’s garlic exports rise over 90% in first quarter as China imposes curbs

Garlic registered the biggest increase among the 19 varieties of spices exported from India.

September 27, 2022 / 05:39 PM IST

India’s garlic exports surged by over 90 percent in the first quarter of this financial year amid lockdowns and rising fuel costs in China, the world’s largest producer and exporter of the spice.

India exported 12,693 tonnes of garlic worth Rs 58.02 crore in April-June, a 92 percent increase in volumes and a 72 percent jump in value from a year earlier. Garlic registered the biggest increase among the 19 varieties of spices exported from India.

In 2021-22, India’s garlic exports stood at 22,181 tonnes valued at Rs 186.19 crore, according to data from the Spices Board.

China accounts for 75 percent of the global garlic production, with output ranging from 20 million to 25 million tonnes. India, with a record production of 3.27 million tonnes in FY22, comes a distant second.

The rise in India’s garlic exports comes when the spread of the coronavirus in China has led to widespread lockdowns in several cities. Escalating fuel costs have also prompted China to enforce curbs on its usage for drying garlic as a large share of its exports is in the dried form of the spice called garlic flakes. As a result, China’s garlic exports have eased.

“This has created a shortage in the global market and lifted demand for Indian garlic flakes,” said Vijay Hotwani, managing director of Varchasva Agro, an exporting firm based in Madhya Pradesh, the largest garlic-producing state in the country.

China output

In FY22, though Indian exports were higher than the previous year, purchases by the biggest Asian buyers of India’s garlic were less, Hotwani said.

However, there is no shortage of garlic in China, where production has been slightly higher than last year. According to Olam Spices, a global producer and supplier of spice ingredients, though the Chinese crop in 2022 was 5-7 percent above the level in the previous year, it was much lower than the 20 percent increase that was expected.

The total carry-forward flake inventories are insufficient to service normal domestic and export demand and additional flaking from the new crop will be necessary.

As a result, there is increased speculator cornering of available flake inventory, leading to an upward pressure on flake prices. Once processing from the new crop begins, the cost of the flake will go up, leading to a further increase in price, it said.

Unlike Indian garlic, the Chinese variety is bigger, less pungent and has more colour. The size of Chinese garlic cloves ranges from 40 to 50 mm compared with 25 to 30 mm of the Indian variety. Chinese garlic is preferred by buyers in the US, Europe and West Asia. India’s exports are mostly to Malaysia, Thailand, Nepal and Vietnam.

Indian garlic is usually 40-50 percent cheaper than the Chinese ones, which sell in the range of $900 to $1,000 per tonne.

“This year, since West Asia and other Asian countries have started buying more garlic flakes from India, export prices of the flakes have moved up to around $750 per tonne from India,” said Vinay Agarwal, director of Ginny Food.

China is not making much garlic flakes this year and hence their prices have spiralled to about $1,800 per tonne.

Limited exports

Although the US and European countries are still buying from China at higher prices, the quantity is much lower. China has limited its exports and is focussing more on stocking for the internal market because of the pandemic and increasing fuel costs.

“The zero Covid policy followed by China will benefit India as the momentum in our garlic export is likely to be sustained for the next 6-7 months. A higher export incentive of 4 percent for garlic flakes will also benefit exporters,” Agarwal said.

India’s garlic exports had peaked at 46,980 tonnes valued at Rs 309.36 crore in 2017-18 because of a shortage of the spice in China. Chinese garlic prices had vaulted to $1,500 to $2,000 per tonne while Indian prices hovered at about $600 per tonne. This year, export volumes are expected to reach closer to the level five years ago but earnings may decline because of lower prices, he pointed out.

Higher freight rates could also erode the earnings of exporters.

“Our freight rates have dropped by 25 percent from last year but are still on the higher side. China has good access to the US and Europe. Besides, there is good government support to the trade and infrastructure in the country,” Hotwani added.
PK Krishnakumar is a journalist based in Kochi.
first published: Sep 27, 2022 05:39 pm