Indexes
June 15, 2017 FPI | Is Georgian Wheat Getting Stronger?!
19
June
2017
In the middle of June, food prices increased by 5.0% on an annual basis (that is, compared to June 2016), but decreased by 0.3% on a monthly basis (that is, compared to May 2017). During the last two weeks, greens, potatoes, and cabbage showed the biggest increase in prices by 29.4%, 23.8%, and 23.3%, respectively. In the meantime, tomato, cucumber, and cheese prices dropped by 26.8%, 15.7%, and 7.1%, respectively.
WHEAT PRODUCTION IN GEORGIA
During the last couple of years, wheat flour prices in the major supermarkets of Tbilisi ranged from 1.8 GEL/kg to 2.1 GEL/kg. According to the diagram, wheat prices were relatively low during the first half of 2015 but increased in the second half of the year.
The same price dynamics were observed for 2016 as well. Currently, prices are relatively high, though domestic production of wheat, as shown by Geostat’s latest report, is steadily increasing.
According to the table, the increase in production is paired with a decrease in imports and a higher self-sufficiency ratio (from 7% in 2014 to 19% in 2016), which might be an early sign of a relatively successful import substitution strategy. However, it should be noted that the total supply of wheat was lower in 2016 compared to previous years, which implies that one should carefully monitor the total supply figures in order to avoid shortages, which usually result in price spikes.
| Indicator (ths.tons) | 2014 | 2015 | 2016 |
| Opening Stocks | 95 | 48 | 73 |
| Domestic Production | 48 | 126 | 127 |
| Import | 651 | 647 | 552 |
| Total Supply | 794 | 821 | 752 |
Recent Publications
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In June 2023, responding to appeals from the Georgian Flour Producers Association, the Georgian government imposed a temporary import duty on wheat flour imported from Russia. This advocacy by the Association began after Russia implemented a “floating tariff” on wheat in 2021, making wheat imports more expensive compared to wheat flour.
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September 2023 | Agri Review
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June 2023 | Agri Review
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In June 2023, the National Statistics Office of Georgia issued its annual publication on the agricultural sector – Agriculture of Georgia 2022. The publication estimates that agriculture, forestry, and fishing comprised 7.5% of the GDP (constant prices) in 2022, which is lower than the 8% share in 2021, but in line with general trends over the last few years (agricultural GDP being 7-8% of GDP on average).
