Garlic: Is The Price Right?

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Published on Wednesday, 02 March 2011 00:00

By Elizabeth Greenberg, Staff Writer

In mid-January of this year, authorities seized 144 tons of Chinese garlic that had been smuggled into Poland disguised as onions.

 By Elizabeth Greenberg, Staff Writer

In mid-January of this year, authorities seized 144 tons of Chinese garlic that had been smuggled into Poland disguised as onions.

If that sounds like a joke to you, you'll probably be even more surprised to know that there have been several similar incidents throughout the EU over the last two years. Customs duties on garlic are significantly higher than those on onions: the 144 tons of Chinese garlic declared as onions would have cost the EU budget 180,000 Euro, or $247,374 USD. When you think of Chinese goods, you probably think of cheap electronics, not garlic, but China produces over 77% of the world's garlic supply. Garlic is, in fact, one of China's most lucrative export goods.

But while garlic has been a lucrative export good for a long while, its sudden value within China is relatively new. In the midst of the H1N1 panic, rumors began to circulate that garlic could protect you against H1N1. H1N1 is by no means the first disease garlic has been claimed to help with—priests of the middle ages used garlic to ward off bubonic plague and in more recent history, Manto Tshabalala-Msimang became infamous for stating that a diet of lemon, beetroot, and garlic could cure AIDS. But between the H1N1-prevention rumor and a garlic shortage in 2008, the cost of garlic began to rise dramatically.  

From March 2009 and February 2010, the price of garlic within China multiplied an astonishing 605%. Garlic outperformed gold and stocks as an asset, earned people enough money to buy cars and houses, and even minted a few new millionaires. The sudden increase in garlic prices caused ripples throughout the world, increasing the cost of everything from spice mixes to domestic US garlic and also increasing interest in garlic speculation. Analysts called the phenomenon a 'garlic bubble.'

The same speculation that caused a fortuitous rise in garlic prices within China helped spark a less positive trend. In 2011, the cost of all food in China began to rise due to a combination of a severe wheat drought and increased speculation. But while the increasing prices are alarming, the Chinese government is currently implementing measures to control the increasing prices and tamp down those prices' effect on the overall inflation rate.

The price of garlic can influence so much—crime, international food prices, domestic food prices, inflation. Maybe the amount of time we spend reading about Chinese auto parts and toys is the real joke.