EastFruit analysts note that the new potato season in Georgia began with very high prices for the potatoes of the new harvest. However, according to a survey held on May 19, the average wholesale price is at the lowest point for the week in EastFruit’s history. Interestingly, prices for the potatoes from the new harvest are now lower than the prices for potatoes from the previous year’s harvest and it has a simple explanation.
New potatoes appeared on the Georgian market back in March 2023. With very low quantities, prices were record-breaking – GEL10/kg (about $3.90 at that time). Prices plummeted quickly beginning at the start of April. There were two major reasons:
1) Large volume of alternatives, in the form of imports of potatoes from the previous year’s harvest.
2) More potatoes of new harvest are entering the market.
For Georgia, usually, in transitionary periods such as the current one, when potatoes from the previous harvest go out of the market and new potatoes are coming, the new ones are more expensive. Sellers with old potatoes want to sell leftovers quickly, while the newer potatoes start to dominate the market and attract more attention from the demand side, who wishes to buy in bulk.
As there are significant amounts of, mainly imported, previous year’s potatoes, the situation is quite different right now.
According to last week’s survey (May 19), the average wholesale price of new potatoes stands at GEL1.30/kg ($0.51), while potatoes from the previous year’s harvest are sold for GEL1.70 ($0.66). Why are newer potatoes cheaper? – the reason for such discrepancy is the moisture content.
As EastFruit has found out, currently, potatoes from the new Georgian harvest have high moisture content per kilogram than the potatoes of the previous harvest. So, buying 1kg of new potatoes yields a lower amount of dry matter than buying 1kg of potatoes from the earlier harvest. Hence, when there is a significant supply of the previous year’s potatoes, the market is paying less for the new potatoes.
Where will the prices go from here? Most of the time, average wholesale prices for potatoes in Georgia stay practically stable from June to the end of the summer. Then the prices depend on the stocks and expectations about the harvest from the Samtskhe-Javakheti region which starts in September. Under normal circumstances, if there are no major shifts in the supply, prices stay at relatively the same levels even after September.
This time around, there may be negative pressures on prices in the short term. Especially for the previous year’s potatoes. Reasons can be increase in the supply and competition with imports. New potatoes keep coming in, and there are imports too, which are enabled by the high prices for previous year’s potato in Georgia.
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