As is typical for late November, Italian garlic supplies are dwindling, creating more space in the market for imported products. So far, the commercial trend has been positive, with reasonable prices for production and distribution. These weeks also mark the end of the sowing season. In southern Italy, we are nearing the end, and depending on the weather, we should finish in the north by the end of the year. "The quantities will be similar to last year's," says Antonio Tuccillo, director of Agrimpex Farming, a company based in Campania.

However, the international situation has greatly impacted price dynamics. At the beginning of the summer season, prices were influenced by the Spanish market, which set high prices due to lower domestic production. This prompted other producing countries, such as China, Turkey, and especially Egypt, to enter the market. These countries experienced exponential sales growth throughout Europe, including in Italy and Spain. In fact, some warehouses still have quantities available for distribution.

Spain, in particular, has experienced a complex scenario. "The massive influx of Egyptian garlic created a stalemate. The more expensive Spanish product remained in stock, while lower-quality Egyptian garlic gained a foothold in the distribution channel," says the administrator. "It's a paradoxical situation for Europe's primary producer, which typically exports to non-EU markets. Spanish exports have declined dramatically this year, and the quantities, which were low at the beginning of the season, are now abundant due to low sales."

The global scenario is poised to become more complicated with the imminent arrival of supplies from the Southern Hemisphere. "Argentina and Chile have historically dominated the market, but Peru is now emerging as a reliable supplier of high-quality products for the European market," explains Tuccillo. "Price expectations from these regions have never been a concern because they have always been higher than in Europe or the U.S. However, a trade agreement between Brazil and China has made Chinese garlic exports much more competitive this year. This has caused drastic price drops in the Brazilian market, seriously damaging domestic producers as well as those in Argentina and the rest of the Southern Hemisphere."

Consequently, Argentina was forced to open its first export contracts at prices comparable to those in China. This trend is also evident in Europe. Spain was already weakened by the drop in sales. It had to lower prices further to sell its products. This was before South American imports reached the country.

For Tuccillo, this situation raises profound questions about the future of the sector. "The problems that have come to light in the current situation have led us to consider requesting intervention from EU administrative authorities to prevent market and yield collapses in the entire production sector." Conversely, one ponders whether nations with struggling economies can manufacture goods that would generate local employment and curtail migration. The geopolitical shifts we're witnessing, along with the apparent shift away from globalization policies, should prompt us to consider tightening imports and strengthening our agricultural production. But would we be doing the right thing?" the entrepreneur concludes.

Source - https://www.freshplaza.com