This year Georgian grain producers will be forced to reduce prices because of the large harvest in the world – Levan Silagava, the head of the Grain Growers Association, says.
According to him, a record harvest is expected in Russia, respectively, the international wheat prices will reduce.
“At this stage, a kilo of wheat in Georgia is 41 tetri, last year the price was 10-12 tetri higher,” – he says.
In his words, 106 million tons of grain will be harvested in Russia , including 67 million tons of wheat.
“This grain mass will put pressure on the world market. This year Georgia will have a good harvest as well – we collected 150 000 tons of wheat last year, and this year 250 000 tons are expected. If the price of wheat high, price of flour rises as well that is bad for the producers of bread as they are forced to raise prices for the end product, or reduce profit margins. On the other hand, when wheat is cheap, the manufacturers are satisfied while bread manufacturers are unhappy. This year one ton of wheat costs GEL 34, last year its price reached GEL 44,” – Levan Silagava notes.
The head of the Association also talks about the dumping prices set by importers, as the anti-dumping law promised by the government and parliaments has not been adopted yet.
Solagava believes that the government must make a choice – to support local producers or not. Currently, Georgia is almost entirely dependent on grain supplies from abroad. Own production covers only about 10% of demand. Despite the numerous agriculture support programs , the growth of local production remains an elusive task. Russia is the main suppliers of grain to Georgia, in addition, the country is importing wheat from Kazakhstan and Ukraine.