Producers Declare on Price Increase - Impact of Russian restrictions on Georgia

Representatives of the poultry industry are announcing price rise due to Russia’s planned restrictions on grain exports.

The head of the company "Invet" told BM.GE that last year price of shrubs (sunflower, soybeans) was 50% -60% up. He considers that new restrictions imposed by the occupying neighbor will lead to another price increase.

"Oil price was already increased and the growth amounted to 25-30%. Russia announces, that they want to introduce quotas on grain imports. Russia’s restrictions will result price increase in Georgian livestock and poultry sector, including milk, eggs and meat. We expect a price increase of 150 GEL per ton of grain, "- said David Shalamberidze.

According to him, the solution is the development of local production.

“Georgia has agricultural lands, which are uncultivated. We also have water resources. We must increase grain production and as a result, we will save millions of GEL. Local products will be cheaper and more competitive. Poultry sector consumers over 20 t of grain per month in Georgia. Grain consumption in the case of bakeries is up to 10 thousand t.
However, local production only generates 2-3 months of supply, but we have great potential and resources. It needs technology, investment and state stimulation,” Shalamberidze said.

Zurab Uchumbegashvili, head of the Poultry Development Association also has negative expectations and notes that Restrictions on grain imports from Russia will have a very bad effect on the industry. Uchubegashvili notes that price growth might be accompanied by supply delays from Russia. According to him, price growth will amount at least 10% -12%.
Russia has announced that quotas will be imposed on grain from February 15. Tax increase is also announced. The expected restrictions will logically affect Georgia, as our country is mainly dependent on Russian grain.

According to the statistics, in the first 10 months of 2020, Georgia imported 97.5 million USD worth of wheat and meslin (448.4 thousand tons).

Import of wheat and meslin from Russia:

2018 - $ 95.8 million (483.5 thousand tons)
2019 - $ 90.6 million (430.2 thousand tons)
January-November 2020 - $ 97.5 million (448.4 thousand tons).

Corn imports from Russia are also growing. In the first 10 months of last year alone, Georgia imported corn worth 22.8 million USD, including 19.3 million USD accounted for Russian corn.

Import of corn from Russia:

2018 - $ 13.8 million (76.4 thousand tons)
2019 - $ 15.8 million (86.6 thousand tons)
2020 January-November - $ 19.3 million (107.7 thousand tons).