A popular belief that garlic can help ward off swine flu has seen the price of garlic increase by 40-fold this year in China, which is the world's largest producer of the plant.
Garlic has outperformed stocks, property and even gold after low demand due to the financial crisis late last year led Chinese farmers -- responsible for about three-quarters of world supply -- to plant less, slashing supply.
AdvertisementThe soaring prices have created a new breed of millionaire, as businessmen and savvy speculators cash in big on the newfound demand for the pungent bulbs.
"Last year's dismal prices caused garlic production to plunge," explained Chen Shuwei, an analyst at Beijing Orient Agribusiness Consultants.
"Now speculators have rushed in to buy up garlic by the truckload because the garlic market is relatively small and easy to manipulate."
Last month, the wholesale price of garlic in eastern Shandong province -- the country's garlic-producing heartland -- rose to nine yuan per kilo (60 US cents a pound), from 0.2 yuan a year earlier, state Xinhua news agency reported this week.
"Prices started to surge around September," said Zhao Fangling, the general manager of a garlic processing company in Shandong's Jinxiang county.
"Garlic was so cheap in the previous two years that some of it was just dumped as trash. Farmers lost money and stopped planting it so supplies dropped by 30-40 percent," he said.
The bulbs have been given a boost partly due to renewed fears over swine flu, as traditional Chinese doctors have recommended garlic as protection from A(H1N1) influenza.
In the eastern city of Hangzhou, one high school bought more than 180 kilos (400 pounds) of garlic for students to eat at lunch to boost their immune systems, the state-run China Daily reported.
An expert at the Beijing Centre for Disease Control and Prevention, Wu Jiang, this week cautioned that there was "no scientific proof" that garlic could combat the flu.
The virus has so far killed more than 300 people in China, with almost all of those fatalities reported in November and December.
Regardless of garlic's potential health benefits, its money-making properties are stirring the most interest.
Xinhua reported this week that businessmen in Wenzhou -- known for speculating on everything from coal to Dubai real estate -- have added garlic to their portfolios, buying 50 million yuan (7.3 million dollars) in bulbs.
Keen investors have been spurred by stories such as that of Shao Mingqing, a 22-year-old jobless man who was photographed by the national press leaning on the black Toyota he bought after selling his garlic stash.
Shao borrowed money to buy 100 tonnes of garlic in September and then sold it a month later at a 125 percent profit of 400,000 yuan, according to the China Daily.
Another garlic trader told the newspaper that he bought a 300-square-metre (3,300-square-foot) house with his profits.
Chen, the agribusiness analyst, said he had heard that a group of warehouse workers in Jinxiang county had become yuan millionaires by quickly turning over a 700-tonne garlic hoard.
"Basically you need to store as much as you can and bid up prices," he said, adding speculators may be benefiting from the surge in bank lending that has accompanied China's economic stimulus package.
Garlic stocks in Jinxiang have fallen to 800,000 tonnes, just over half of what they were last year, said Zhou Xuefeng, a 39-year-old garlic farmer and the Communist Party branch secretary in the village of Jinyi.
"After two years of dismal sales, many garlic farmers lost heart and they didn't believe garlic prices could go up anymore, so they spent less on planting garlic, and production dropped sharply," he said by telephone.
Zhou estimates supply will fall 400,000 tonnes short of demand this year, but he expressed fears that the price boom could lead to an oversupply in coming years that will drive prices down.
Restaurants meanwhile are already scaling back on their garlic use. In Shanghai, unlimited chopped garlic is quickly becoming a thing of the past.
"It's too expensive. The boss said we cannot afford to give too much now," a waitress at the Tumen BBQ restaurant said when asked to fill up an almost empty jar of garlic.
"We might charge for that in future."
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