Garlic was priced at 13.5 yuan (US$1.98) per kilogram on Thursday in a supermarket in Xuanwu District in downtown Beijing, more than 1 yuan for each bulb.

Speculators have been trading garlic for profit, resulting in the sudden price hikes since the end of last year, a veteran garlic dealer using the alias Qin Bin, said.

"I've never seen such drastic price hikes in my 20 years of experience in the business," said Qin Bin in Yutai County in Shandong Province.

Latest official statistics revealed the massive price hikes.

The National Bureau of Statistics on Tuesday said the wholesale price of garlic skyrocketed more than 10 fold from a year earlier to about 12.2 yuan per kilogram at the end of April, while average vegetable prices in April surged about 25 percent from a year ago.

As the property market cools the vegetable market was heating up, said Dai Zhongjiu, director of the Beijing-based China Vegetable Circulation Association.

"Speculating on property? No, speculating on garlic promises more and quicker profits," a speculator who gave his name as Zhang Ling told Wednesday's Southern Metropolitan Daily.

Zhang has earned 2 million yuan with 500,000 yuan of seed money since the end of last year.

He said most of his friends wanted to invest in garlic with the money they had prepared for property market, as their enthusiasm for buying houses had been dampened by China's latest policies on the property market.

China has taken a series of measures in recent weeks to rein in soaring property prices. The authorities have issued regulations on advance sales of new property developments, introduced new curbs on loans for third home purchases and raised minimum down-payments for second homes.

Zhang Shuqing, a garlic peasant in Menglizhai Village in Peicundian Township, Qixian County of Henan Province, sold all his garlic before the harvest.

The garlic, still in the fields, was bought by a businessman from Shandong at 4,000 yuan per mu. Zhang pocketed 20,000 yuan for his five mu (0.33 hectares) of garlic.

Speculators expect a lack of supply as garlic acreage has been shrinking in recent years due to low prices, said Qin, adding that garlic could be easily hoarded

"It costs only 2 to 3 yuan to buy a bag of garlic (about 20 kg) in wholesale in 2008. But now it costs about 200 yuan to buy a bag," said 48-year-old Zhou Yan, a vendor who has been selling garlic for eight years in Zhengzhou in central China's Henan province.

"Big speculators would raid a target market suddenly and then retreat suddenly. The small dealers shoulder the losses," Qin said.

(Xinhua News Agency May 14, 2010)