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Potato prices in Georgia are higher than last year, Turkish imports may be a problem

In July-August 2021 alone, Georgia imported 26% more potatoes than the average for the second half of the previous three years. EastFruit already wrote that July import volumes were unusually high, and this trend continued in August.

Import of potatoes to Georgia (excluding seed potatoes) in the previous month amounted to 2,400 tons. This is 8 times more than the average for August over the past three years, and 17 times more than the average for August 2014-2020. The reason for the high import volumes is the same as in July: Russian importers purchased large volumes of Georgian potatoes in previous months, leading to very low local supplies ahead of the new harvest in September. Turkey dominated in the import of potatoes to Georgia with a share of 97% in physical terms.

As the potato harvest begins this month in Georgia’s main production region, Samtsk-Javakheti, average  prices have dropped from $0.35 per kg 4-5 weeks ago to $0.29 last week. There may be room for further declines as Turkish potatoes were imported in August at $0,23. So far, we have not reached the low prices of 2020 that disappointed Georgian growers then. The average price last week was 20-30% higher than the same week in the previous three years.

In 2020, the September harvest in Georgia was quite high, given the weakened local demand due to the COVID-19 pandemic. The oversupply led to a decline in prices to $0.17 pernjm kg. Given last year’s experience, the current harvest will not be a high one. Meanwhile, local demand may not have increased much over the year. COVID statistics have worsened, prices have risen very quickly, and the workforce has not fully recovered. Thus, without significant improvements on the demand side, the volumes supplied to the Georgian market will be the main factor in pricing.

Read also: In the Georgian market, Turkish carrots replaced local ones

Based on prices, the market is not as oversaturated as it was last year, and given the current information, prices are unlikely to fall that low. Much will depend on the Turkish side, which seems to be very active lately.

Notably, an increase in the production of top-quality potatoes in Georgia is unlikely. Imports of seed potatoes, which usually produce high yields and very high quality in September, have been cut in half this year. This is partly due to crop rotation problems among seed buyers and the difficult past season. The use of imported seeds has not become more popular despite the comparative success of growers who focus on quality and sell more easily at much better prices. This is not surprising as it is difficult for small farmers to invest in expensive seeds, especially after last season.

EastFruit

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