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Onion prices spike once again in Georgia – will they stop rising?

The average wholesale price for onions in Georgia has jumped from one record high to another. Local sources tell EastFruit that we may see further growth as the local stocks are not big and the imports, which could in theory suppress the rising prices, are quite expensive.

As EastFruit’s price monitoring tool shows, wholesale prices for onions in Georgia have jumped from 1.20 GEL/kg ($0.44/kg) to 1.40 GEL/kg ($0.52/kg) in the first week of December 2022. While demand has grown due to the influx of Russian citizens, the major driving factor behind the spike is on the supply side. Onion stocks, both local and imported are quite low at the moment.

Local stakeholders provide an insight that importing is quite expensive right now. There are several reasons for this:

  • Major producer, Turkey, has banned exports to support its market
  • Importing onions from other neighboring countries has become more expensive recently
    • Local prices may not be enough to enable further imports
  • There is a lack of transporting vehicles making transportation more expensive

Many Georgian suppliers think that prices have to grow, and are holding onto their stocks of onions. This puts further pressure on the prices to increase. Onion prices are believed to rise to the point to enable imports. With a rough estimation, right now it costs about 1.20-1.30 GEL/kg to import onions including tax and transportation expenditures.

Onions are one of the key imported agricultural products to Georgia. The country has imported 27 000 tonnes of onions in the first 11 months of 2022, which is on average 2 500 tonnes of exports each month. Official trade data for November 2022 shows that the prices for imported onions have increased by 15% in year-on-year terms. Key suppliers were Kazakhstan, Armenia, and Azerbaijan.

It is widely thought that given the low local stocks, Georgia’s dependence on imported produce will grow in the coming months. The next harvest in the country starts in June 2023.

EastFruit

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