And again – unusually high export of potatoes from Georgia

EastFruit analysts point to a record high potato exports from Georgia at the end of September 2021, as neighboring countries try to fill the potato supply gap.

A total of 6.2 thousand tons of potatoes were exported from Georgia in September 2021. 83% of these potatoes went to Russia and Azerbaijan. Ukraine, Moldova, Armenia and Slovenia account for the remaining 17% of Georgia’s potato exports. The share of Russia in the total export volume was 45%.

Interestingly, there are significant price differences. Exporters to Russia were paid $ 430 per ton, which is 1.5 times more than the second highest price paid by Armenia ($ 280). In all other cases, the export price remained below $ 135 per tonne.

Data source: Ministry of Finance of Georgia

Russian demand for potatoes from the latest crop in Georgia is driven by the recent unfavorable situation on the Russian market. Heavy rains in Russia make it difficult for growers to harvest potatoes, and local supplies are very limited. Moreover, the average harvest this year has dropped significantly. All this leads to an increase in potato prices, as well as to the need for import to the Russian market. It looks like Russians expect prices to hold for now. If this expectation comes true, then it should attract more exports from Georgia, since the average price in Georgia is currently about 38% lower than in Russia.

This situation can lead to high prices for potatoes for Georgian consumers. Supplies that were previously targeted at the local market will be exported to Russia. The Georgian potato industry has already faced such circumstances, when the Russians bought huge quantities of Georgian potatoes in the second quarter of this year. As a result, average prices for Georgian potatoes in dollar terms in July and August increased by 90% compared to the same period in 2020 and by 30% compared to 2019.

Some price movement can already be seen. According to EastFruit price monitoring data, from September 24 to October 1, the average price for Georgian potatoes increased from $ 0.29 to 0.32 per kilogram.