The world ginger market is said to be split into two categories, Chinese ginger and non-Chinese ginger. Peru leads the pack in organic and certified ginger production quality, leading to higher pricing in most markets. However, the country is finishing the harvest season about two months earlier than in previous seasons. China on the other hand continues to grow and export the cheapest ginger with, many are saying, varying quality, to capture market share. A Peruvian producer and exporter notes that China has a FOB price of $22 per box of 10 kg while Peru's price is $50 per box of 13.6 net kg for their organic/ecological product, certified with seals of socio-environmental responsibility. Other production countries include Brazil, Costa Rica and Honduras.
The attacks in the Red Sea sea have caused detours and delays of up to 10 days for shipments from China (sometimes taking longer than a month to arrive, according to German and Italian traders). Shipping costs increased substantially due to this, but have started to decline. Many factories in China suffered losses due to the very high shipping costs.
In Italy organic ginger is becoming popular while prices have started to stabilise. A wholesaler in northern Italy speaks of "problems in loading the product and getting it to its destination, plus unexceptional quality and falling consumption. In February, at the beginning of the Chinese ginger season, the product was still damp and the extra 20-25 days of transport affected its organoleptic characteristics. Prices collapsed, a month later than I expected." Germany is seeing a delayed start to the domestic harvest. The effect of the increased shipping costs and delays of 50 to 60 days are sometimes seen in arrivals from China, importers in Germany note. Demand was relatively high in January and February during the coldest winter months but has started to come down.
North America saw strong demand in this region for ginger during 2023. Supply is coming mainly from China, as Peru is coming to the end of their season. There was some supply from Central American countries, as well as Brazil, who are shipping young ginger, which has a shorter shelf life, and it's being sent via air. Despite the air shipments Brazil's ginger is still competitive compared to Peru's product, while the Chinese product remains the lowest priced.
Demand has softened as the colder weather in North America is starting to lift. South Africa is seeing continued high ginger pricing. This led to "every Tom Dick and Harry importing ginger from China," remarks a market trader. The Australian fresh supply chain for ginger has historically been serviced by Australian ginger producers, despite the country being a net importer of fresh ginger. Regulatory changes to fresh ginger imports, have allowed the supply and sale of fresh ginger, at lower cost, from Fiji into Australia. Australian ginger has only a few key export markets, with New Zealand accounting for 90% of fresh ginger exports in the year ending June 2021. This was followed by Singapore at 7%, and Kiribati, PNG and Hong Kong at 1% each.
Peru: Season coming to end two months earlier
Peru's ginger supplies remain limited despite good demand in their key markets of Europe, the USA and Canada. A producer and exporter notes: "The supply in Peru is limited at this time because sowing in 2022 was 60% down compared to 2021, because farmers lost their working capital due to the low prices that occurred in 2020 and 2021."
He says that, despite the good demand, the prices paid for ginger are a factor given that China has cheaper ginger available, but in Peru they focus on growing and exporting an organic and certified product. "The current demand in Europe, the USA and Canada is good but the price is a factor that determines the market since China has a FOB price of $22 per box of 10 kg and Peru with $50 per box of 13.6 net kg on the condition that it is an organic/ecological product, certified with seals of socio-environmental responsibility."
Another large ginger producer said the season that is ending now, two months earlier than usual, will close with some 2,450 containers exported. "But the caveat is that about 67% was ginger planted in 2022, and 33% was ginger planted in 2021, 2020, and even before, which was left in the ground unharvested when those previous seasons ended. That created a distortion and significant variability in quality and prices. Most of what has been exported in the last two or three months has been almost garbage."
What was planted in 2023 and will be exported in the season about to begin is enough for about 2,500 containers. So, volume-wise, it will be a very similar season. But this season, there will no longer be ginger from previous years. How much pressure there will be on those 2,500 containers will depend on the supply from other origins, such as China and Brazil. Something relevant is that ginger planted in 2023 is already being harvested very early, two months earlier than normal.
China: cheap price helps gain market advantage worldwide
The ginger exported from China currently is from the 2023 season, these air-dried gingers have been exported since the end of December last year. The overall quality is still good because the weather during the 2023 season was good and the gingers were not affected by drought or flood, so the yield has also increased significantly compared with last season.
The export price is cheaper than last year. When the new ginger started to be shipped, it was affected by the Red Sea conflict, as a result, the ships had to detour. The shipping cost to the UK was around $1,300 per container (40 ft) before the conflict, and by the end of January, it had risen to over $7,000, causing many factories to suffer significant losses.
Moreover, due to the detour, the shipping schedule has been delayed by more than 10 days, which has also had some impacts on the quality of gingers. After the Chinese New Year, the shipping cost gradually began to decline, but it is still very high, currently around $4,500 to $5,000 per container.
This year, Peruvian ginger has little impact on Chinese ginger. From a consumer preference perspective, many people still prefer Chinese ginger according to exporters. Besides this year the price of Chinese gingers is also cheap. These help Chinese gingers gain market advantage internationally.
Italy: Two sides of the same coin
According to the director of a company that sells organic ginger to Italian retailers, after the exponential growth of a few years ago, sales of ginger in Italy have now stabilised, although there is a small but steady increase in demand every year. "It is a product that can be included among those considered healthy and, for this reason, the organic version is very successful, in 150-gramme trays. Prices for organic ginger are around €10/kg. In general, fluctuations are rather limited, unless there are negative events in the production areas". The company buys its ginger in China or South America, depending on the season.
A wholesaler in northern Italy, on the other hand, speaks of 'problems in loading the product and getting it to its destination, plus unexceptional quality and falling consumption'. In February, at the beginning of the Chinese ginger season, the product was still damp and the extra 20-25 days of transport affected its organoleptic characteristics. Prices collapsed, a month later than I expected. Currently, the purchase price for Chinese ginger is between €1.80 and €2.20 per kg. The campaign for the Thai product has also started, with selling prices around €3/kg. Brazilian airfreighted ginger, on the other hand, is barely visible on the market. I expect ginger prices to level off in the coming weeks".
Germany: Delayed start to the domestic harvest
Limited availability characterises the current ginger market in Germany. Around 90 per cent of Peruvians are through with their export volumes, which is not only due to the somewhat low harvest volumes, but also the attractive prices on the US export market. The new Peruvian harvest will gradually hit the market from July/August. Meanwhile, the quality of Chinese ginger is predominantly good. Nevertheless, the longer transit times (50 to 60 days instead of approx. 35 days) have had a partial impact on the quality of the goods.
According to one importer, the prices of both origins have gradually risen in recent months. In the case of Chinese ginger, this is clearly due to the continuing rise in sea freight costs, which have tripled in some cases. This sometimes leads to additional costs of 0.20 euros/kg, which can only be partially calculated.
In a multi-year comparison, demand was relatively high in January and February in particular. "This is due to the flu epidemic, which was more pronounced than in previous years. You notice that ginger then immediately becomes more of a focus for consumers again. At the moment, however, demand is trending downwards again." There is also a clear trend away from packaging and towards loose marketing. Aldi Süd, for example, has recently switched from 300g nets back to loose goods. As far as sources of supply are concerned, China and Peru continue to dominate the market. There are also a few products from Africa (Ghana or Nigeria) that are of little interest to the Western European market due to their smaller tuber size.
Netherlands: Unnecessary panic in the ginger market
The price of ginger has dropped from around €43 to a range of €28-€30 in just a few weeks. "There's panic in the market, but in my opinion, there's no reason for it," notes a Dutch importer. However, he does expect the market to pick up slightly in the lead-up to the Easter holiday. "Supply isn't very abundant. Peru doesn't have much ginger available, and Brazil even less, so China currently dominates the market. However, the long transit times due to ongoing issues in the Red Sea make trading riskier."
Another importer confirms the price drop. "But in China, the prices are fairly stable. In the Netherlands, the prices were very high for quite a long time last year, with unprecedented margins. They have now dropped to a more normal level, although the decline has been a bit faster than I personally expected. It will become apparent in the coming weeks how the market will settle."
North America: 2023 saw strong demand in this region for ginger
Ginger supply in North America is shipping largely out of China right now. The Peruvian ginger is coming to the end of the season and there was some supply from Central American countries, as well as Brazil. Brazil is shipping young ginger, which has a shorter shelf life, and it's being sent via air. Pricing near the end of the Peruvian season had increased which helped make room for air-flown Brazilian ginger in small quantities.
That said, demand is on the softer side for ginger currently. Usually when Chinese ginger enters the market, it generally is enough to fill the demand and right now, the market is being divided into two segments: Chinese ginger and non-Chinese ginger for customers who are more price-driven.
While demand for ginger is stronger during colder months, which are winding down now in North America, 2023 overall saw high demand for ginger. As for pricing, while Peruvian ginger pricing is strong, Brazilian, even with air-flown product, is affordable in the market. Chinese ginger pricing isn't as strong as Peru or Brazil pricing.
South Africa: High prices, product scarce
High prices for ginger continue: a municipal trader says between R100 (4.9 euros) to R130 per kilogram; between R400 or 19.6 euros (for imported) to R600 (for South African) ginger in 5kg boxes at the Johannesburg municipal market.
"Ginger was scarce, it's only now that the guys are bringing in Chinese ginger. Every Tom Dick and Harry imported ginger from China,' he remarks. Some bring in Chinse ginger twelve months of the year, but connoisseurs and foodies prefer South African ginger which has a stronger taste and lower water content than Chinese ginger. Local is just getting started now, and by the end of the month the local season should be in full swing."
He reports that some ginger farmers expect strong crops while others are still recovering from crop disease and lack of clean planting material over the past season, and therefore he expects that ginger prices will hold for the foreseeable future.
Australia: Domestic production competing with lower cost supply from Fiji
The Australian ginger industry is centered around southern Queensland, with a very small amount produced in northern New South Wales. In the year ending June 2021, Australia produced 5,184 tonnes of ginger. The volume of fresh supply was 2,745 tonnes (53.0%) with a wholesale value of $61.6 million. Overall, the gross value of production (GVP) of the ginger industry has steadily risen over the past seven financial years. After a spike in the value of ginger during the COVID-19 pandemic, the GVP for the 2020-21 financial year was $54.7 million, an increase of more than $3 million from the previous financial year.
Australian ginger makes up only a small proportion of global ginger production (~1%), which is otherwise dominated by China and India. Australia is a net importer of ginger, with imports predominantly originating from countries with lower input costs, including China, Vietnam, India, Thailand and Fiji. The Australian fresh supply chain for ginger has historically been serviced by Australian ginger producers, despite the country being a net importer of fresh ginger. Imports of fresh ginger were typically used in processing and never entered the fresh supply chain. In the past decade, there has been regulatory changes to fresh ginger imports, which has allowed the supply and sale of fresh ginger from Fiji in Australia. This means that the Australian ginger supply is now competing with low-input-cost ginger from Fiji, shifting the industry's focus towards increasing yield and differentiating the Australian product in the market both domestically and internationally. Australian ginger has only a few key export markets, with New Zealand accounting for 90% of fresh ginger exports in the year ending June 2021. This was followed by Singapore at 7%, and Kiribati, PNG and Hong Kong at 1% each.
Next week's topic: Peppers