Georgia-based flour milling plants are facing the threat of closure if the government does not restrict imports of flour.
The problem lies in the fact that the cheap flour is imported in Georgia from Russia and flour milling plants are operating at a loss.
From February 1, Russia imposed wheat export duty, its size is 15% of the customs value of the consignment plus €7.5. On the other hand, Russia strengthened processing enterprises to promote domestic product and create new jobs.
According to Chairman of the Grain Growers Association Levan Silagava, in this situation every self-respecting country protects its own market. He gives the example of Turkey, which flour filled the Philippine market. But the latter imposed high customs duty on this product.
Silagava believes that the same measures are taken by European countries imposing a tax of 172 Euro on one ton of imported flour. In Levan Silagava’s words, the government is already informed about the problem the sector faces and flour mills are waiting for their decision. He considers the local market protection bill as one of the protective mechanisms.
“We are waiting for a long time for the adoption of the draft law on the protection of trade in the local market which says if any of the local manufacturing sector faces the threat of halting, the government has the right to timely, for a certain period , limit the import of the products,” – says Silagava.
A representative of the Azerbaijani “Carat Holding” talks about the same problems noting that the import of cheap Russian wheat flour makes local production unprofitable. In her opinion, in such a situation, the government should restrict imports of Russian wheat. Otherwise, they will have to import flour mill, but jobs will be lost.
Georgia has a total of 15 flour milling plants, each of which employed up to 70 people.