Analysis of trends in price volatility of garlic in china and market responses
I. Overview of the overall price volatility of garlic
It will be a turning year in the development of our garlic market. According to data from the ministry of agriculture and rural development, the acquisition price in the main production area of garlic (garlic) is "u"-type, with average prices of 3. 2 yuan/kg at the beginning of the year, falling to a low point of 2. 1 yuan/kg in june-july, rising to 3. 8 yuan/kg at the end of the year, with an annual price strengthening of 17. 9 per cent. Such volatility not only affects farmers ' incomes, but also triggers a chain reaction upstream and downstream of the industrial chain。
Ii. Core drivers of price volatility
1. Structural imbalances between supply and demand
Garlic production reached 213 million tons, a decade high. The shandong region accounts for 38 per cent of production, while the main producing areas, jiangsu and henan, have also increased production due to climate-appropriate impacts. During the same period, however, the growth of the national catering industry slowed down and the procurement volume of processing enterprises decreased by 12. 3 per cent over the same period, resulting in accumulation of stock pressure. In particular, during the centralization period of june-august, major production areas, such as shandong single county, experienced daily market sales exceeding 5,000 tons, and market digestive capacity was severely inadequate。
2. Effectiveness of policy regulation measures
The policy of "subsidy for cropland rotation" implemented by the national commission for development and development in association with the ministry of agriculture and rural development was piloted in shandong, covering 1. 2 million acres of garlic. Following the implementation of the policy, some farmers have initiated crop rotations such as maize and wheat, which have directly led to a decrease of 8. 7 per cent in the area under effective cultivation in their main production areas. At the same time, agricultural insurance coverage has been expanded to 65 per cent and farmers ' awareness of risk prevention has increased。
3. International market linkages
The economic recovery in the euro area led to an increase in consumption of catering, with an increase of 24 per cent in the volume of garlic imported over the same period. At the same time, the exports of central asian countries through the "cross the road" trade route surged, resulting in price transmission to domestic markets. Customs data show that the volume of garlic exported throughout the year was 58,000 tons and imports 12,000 tons, a decrease of 18. 6 per cent in net exports over the same period。
Impact analysis of the chain of industry
1. Plantation end: low prices led to a 12. 4 per cent reduction in sowing area, but the area rebounded at 19. 7 per cent, resulting in new cyclical fluctuations
2. Processing end: the rate of start-up of garlic-processing enterprises nationwide decreased from 82 per cent to 67 per cent, and the proportion of deep-processed products increased to 35 per cent
3. Transport warehousing: the cold chain coverage increased from 28 per cent to 41 per cent, but the regional storage facility gap remains at 220,000 tons
4. Marketing channels: the share of electricity providers increased from 9. 3 per cent to 14. 8 per cent, with community group purchase models covering over 200 locations city
Typical regional market cases
1. Shandong golden village: set up a "government + enterprise + co-operative" three-tier regulatory system to reduce the volatility of 23 per cent by adjusting the crop structure through a 2,000-acre demonstration field
Jiangsuju state: development of advanced garlic processing and development of higher value-added products such as garlic and garlic oil, with a profit rate up to four times that of traditional processing
3. Henanshi county: innovative "order farming" model, bottom purchase agreements with enterprises such as the golden dragonfish, increased price security to 85 per cent
V. Transmission effects of price volatility on the agricultural economy
Farmers' income: per capita income fluctuations of 0. 38, significantly higher than the national agricultural average of 0. 21
2. Structure of employment: employment in transport logistics grew by 17 per cent, but employment in traditional farming decreased by 9. 3 per cent
3. Agricultural market: 14 per cent reduction in fertilizer sales and 8. 5 per cent reduction in pesticide use, reflecting restructuring of cultivation
4. Financial insurance: agricultural insurance payments amounted to $230 million, an increase of 41 per cent over the previous year, and the risk hedge mechanism was beginning to show results
Vi. Innovative strategies to address price volatility
1. Market early warning systems
- establishment of a dynamic monitoring platform with 12 dimensions: weather, soil, market, etc
- development of the price volatility index (gpbi), with a forecast accuracy of 72 per cent three months in advance
- pilot application of block chain technology for full process traceability
2. Innovative applications of futures tools
- garlic futures contract design: the bond ratio has been reduced to 8 per cent and the delivery grade has been refined to 6 levels
- twelve hundred farmers were involved, with 68 per cent success rate
- roll out the "insurance plus futures" model, covering over 500,000 acres
3. Upgrading industrial chain integration
- construction of 100,000 tons of smart-selection centres per year, with a loss rate of 15 per cent to 6 per cent
- development of garlic-based tourism routes to extend industrial chain value chains
- establishment of cross-border procurement alliances and long-term supply agreements with 8 countries
4. Science and technology empowerment
- application of the drone protection system, 20-fold increase in operational efficiency
- resistible varieties developed by genetic editing techniques, with shelf duration extended to eight months
- 40 per cent and 35 per cent for integrated water fertilization techniques
Projections of future market trends
1. Price volatility cycle: from traditional 3-5 years to 2. 5 years
2. Changes in regional patterns: newly emerging production areas such as henan and anhui will account for 28 per cent
3. Consumption structure upgrading: 300 per cent of high-end organic garlic premium space
4. Digital penetration rate: projected 75 per cent, up 47 percentage points
