Top 7 events that influenced Georgia’s produce business over the past 10 years (part 2, video)


Top 7 events that influenced Georgia’s produce business over the past 10 years (part 2, video)

09/14/2020

Berries, in particular blueberries, are one of the promising directions of agricultural exports from Georgia to the EU.

The EastFruit team in Georgia interviewed leading producers, processors, exporters and importers of fruit and vegetable products, as well as solution providers for the industry, officials and experts to identify the most significant events over the past 10 years that have had a decisive impact on its development. Below is a consolidated version of the ranking of the most important events for the Georgian business of vegetables, fruits, berries and nuts in chronological order as these events occur.

The first part of the material can be read here. Below is the second part of the main events in the Georgian fruit and vegetable industry over the past 10 years.

3.2015 – the spread in Georgia of the marble bug (lat.Halyomorpha halys)

The marble bug (Latin Halyomorpha halys) appeared in Western Georgia in 2015. By 2017, bedbugs destroyed a significant part of the hazelnut crop in specialized farms. For this reason, in the 2017/18 season, hazelnuts, which previously held a leading position in Georgian exports, sharply surrendered them due to a decrease in the yield and quality of nuts. According to expert estimates, losses in the production of hazelnuts in Georgia amounted to about $ 50 million a year and even more. Revenue from the export of hazelnuts in the 2018 calendar year was only $ 46 million, although in 2014 it reached $ 179 million.

In 2017, a coordination headquarters for pest control was created and a list of specific measures was developed. The complex of state measures to combat the marble bug includes four main areas: an active information campaign among the population, monitoring (establishing the distribution area of ​​the marble bug, monitoring the life cycle, population dynamics, etc.), measures to control the population (in particular, chemical treatment of territories), as well as research work on the use of bioagents that negatively affect the population of the marble bug, biological plant protection products, etc. In 2018, we managed to take the pest under control and significantly improve the quality of Georgian hazelnuts, which has already affected the growth of export earnings.

Exports of hazelnuts from Georgia in the period from August to December 2019 in monetary terms amounted to $ 49.55 million, which is 75.0% more than a year ago ($ 28.31 million). That is, the first signs of growth in the volume and value of exports have appeared, which in recent years have had a clear downward trend.

In January-July 2020, the export of hazelnuts brought Georgia $ 19.6 million in export earnings, which is 47% more than a year ago ($ 8.8 million). According to the results of the first quarter of 2020, hazelnuts took 9th place in the TOP-10 exports of Georgian products (excluding re-exports) with a share of 2.2%.

However, a full recovery of the industry will obviously still require a lot of effort.

4.2016 – Signing of the Free Trade Agreement with the EU

“Georgia has signed an agreement on a deep and comprehensive free trade area with the EU, Georgia has free trade with Turkey and the CIS countries, the country has a preferential export regime with the United States, Canada, Japan. By the end of 2016, we are waiting for a free trade agreement with China. – Georgian Prime Minister Giorgi Kvirikashvili said at the end of June 2016. – This means that in the near future Georgia will have a network of free trade agreements, which will enable it to reach more than 2 billion consumers.

Association Agreement with the EU, which includes the Deep and Comprehensive Free Trade Area Agreement [DCFTA], Georgia signed in June 2014. However, the actual exports of agri-food products to the EU remained small. According to the official data of Geostat, in 2018 the EU countries accounted for 15.4% of export proceeds from agri-food products ($ 148 million).

It should also be noted that only a few commodity items are exported – walnut crops (mainly hazelnuts), wines and alcohols and mineral water. Until 2017, more than 70% of the proceeds from Georgian agricultural exports were brought by hazelnuts, which were exported mainly to the EU countries – Italy, Germany, the Czech Republic, but due to the spread of the marble bug (see the previous paragraph), the proceeds from the export of hazelnuts decreased by more than 60 % and in 2018 amounted to $ 49.55 million. Even the doubled export of wine, juices and mineral water could not improve the situation. In 2019, revenue from exports of agri-food products of groups 01-24 to the EU decreased by more than 35% compared to 2015.

One of the promising directions of agricultural exports from Georgia to the EU is berries, in particular, blueberries. Despite the favorable climatic conditions and the presence of an “export window” in May-June, few producers export berries to the EU market. The main problem is logistics, the cost of which negatively affects the competitiveness and freshness of Georgian berries when supplied to distant markets. Also, in the context of the pandemic, air traffic was significantly limited, and for the transportation of berries by road, there is still no sufficient volume of products to optimize transportation costs. Georgian producers are already beginning to express their readiness to cooperate in order to form export consignments of berries.

In addition, as the production of different types of berries develops, deep-frozen berries can become one of the promising directions for export to the European Union. This, by the way, will also increase the income of producers of other fruits – for example, a non-standard peach, of which there is a lot in Georgia, can be frozen and sent for export. In fact, most types of berries, fruits and vegetables, and even greens can be frozen and exported.

Another promising direction in export supplies to the EU is nuts. As we have already mentioned, in Georgia, areas under walnuts, almonds and even pistachios are rapidly expanding. The EU is one of the largest markets for these nuts in the world, and the cost of logistics is no longer of fundamental importance here, since the products are expensive. Moreover, they are not classified as perishable.

Watch the video below for industry-specific coverage of these events.

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