Schools have been hoarding garlic for pupils to eat because of its reputed properties in warding off swine flu. The China Daily has reported that a high school in Hangzhou in eastern China, bought 200 kg of garlic and made students eat it at lunch to keep healthy.Also supplies have been cut because farmers in China and elsewhere slashed plantings when prices collapsed in the financial crisis.
But another cause of the garlic bubble may be old-fashioned speculation.
The Financial Times reported that Jerry Lou, Morgan Stanley China strategist, said, “You need a warehouse, a lot of cash, and a few trucks. That’s how it works. Basically, what you do is try to arrest as much supply as possible then you bid up the price. Moving garlic from one warehouse to the other, you make millions of dollars.”