Ginger: Peru's exports have dropped drastically

Challenges for Peru's exporters

In their latest ginger report, the experts from FreshPlaza report that Peruvian ginger exports have fallen by a whopping 43% compared to last year. The North American market remains Peru's most important export destination, accounting for 58% of total shipments, but exports to this market fell by 33%. Europe accounts for 40% of Peruvian ginger exports, but also recorded sharp declines of 54%. 83% of shipments from Peru are organic ginger. The sharp decline in exports from Peru is due to various factors, including unfavourable weather conditions, higher certification costs and the increased incidence of the Ralstonia bacterium. Growers are concerned that the bad weather could exacerbate the bacterial problem and reduce production volumes, which could lead to a shortage, as demand for ginger is generally high, especially when winter arrives in the northern hemisphere.

One producer also told FreshPlaza that the informality with which many Peruvian exporters go about their work is damaging the country's reputation as a supplier of quality ginger. Safety and quality problems repeatedly damage the image of Peruvian ginger. Although organic ginger is still in high demand, many European importers see Peru as a risky source and are looking for other suppliers.

Things are looking up in Brazil

Brazil continues to supply ginger to the USA, although the season is almost over; there is still sufficient good quality product available. The crop was good this year, which is helping suppliers to make up for the last two years, in which things looked worse, to some extent and win back market share. The quality was also impressive this season and market players expect the total export volume to the USA and Europe to increase. The good demand is also driving up prices, and the colder weather and shortage of supply should lead to further increases. In addition to Brazil, Peru will continue to export ginger to the USA until January, and Costa Rica will soon begin its shipments. US imports from China are also continuing.

High costs in China

The export season in China is drawing to a close and the new harvest will begin in January. China is currently increasing its shipments to Europe in order to meet the rising demand in winter. However, the market is facing various hurdles here, as transport costs have skyrocketed due to the Red Sea crisis, delivery times have increased and the costs and risks for Chinese ginger have risen. Many importers are therefore favouring the much cheaper Brazilian ginger.

Optimistic outlook in South Africa

According to market players, the crop in South Africa is developing well and growers are optimistic about the new season. This usually starts in March, and ginger is generally in short supply in South Africa between January and March, meaning that a lot of produce is imported from China and Vietnam. Prices on the local markets in South Africa are currently between the equivalent of EUR 2/kg and EUR 3.10/kg, with domestically grown goods at the upper end of the price range.

China is the most important supplier for the EU

Looking at Europe, it is clear that ginger imports in the period from 1 January to 3 November 2024 fell by 6.5% compared to the same period last year. The most important supplier is not Nigeria, which has now slipped to second place, but China with 2,771 mt; the country was thus able to increase its shipments to the EU by more than 50%, while Nigeria suffered losses of 45.6%. EU imports from Vietnam also fell significantly, while India exported almost 54% more ginger to EU countries. The most important buyers within the EU were the Netherlands, Germany and Belgium.

Price rally in the Netherlands

The ginger market in the Netherlands is currently buzzing with activity and prices have skyrocketed. A local importer told FreshPlaza the following: "We have come from a difficult period in the summer with lower demand and consumption, but in just two to three weeks, this has shifted to a hot market with prices rising more sharply than we have perhaps ever seen in such a short time. Currently, prices are around € 3.75 per kilo. Brazil has very little available, and I don't expect that anticipated volume to arrive in Europe. China still has some old harvest on the way, but FOB prices in Peru remain high. It's uncertain how the market will develop, but I wouldn't dismiss the possibility that these high prices could persist well into January."

Germany imported an estimated 32,052 mt of ginger in 2023. This means that the import volume has fallen compared to the previous year, but has increased in the long term. China exported more than 16,200 mt to Germany last year, making it the most important supplier, followed by Peru and Brazil.

In Italy, the outlook is currently rather poor and traders are pessimistic. High purchase prices and quality deficiencies in imports from China pose challenges for buyers, and when the new season starts in China, this is usually prioritised by international buyers.

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