On January 11, 2022, the upper house of the Uzbek parliament approved a draft law whereby tax incentives for the imports and sale of a number of food products, including potatoes, will be extended until April 30, 2022, EastFruit experts report.

On October 21, 2021, with the view to restraining the rise in potato prices in the domestic market, the Senate of the Oliy Majlis (upper house of parliament) approved a law on amendments to the Tax Code, providing for a zero value added tax (VAT) on the import and sale of a number of food products, including potatoes. According to the document, imports and sales of these goods were exempted from VAT from October 10 to December 31, 2021.

Upon the expiration of these tax benefits, the country’s upper house of parliament approved a law on amending the Tax Code on January 11, 2022. It provides for the exemption of the imports and sale of a number of food products, including potatoes, from VAT until April 30, 2022.

From the beginning of January to the end of September 2021, the dynamics of average wholesale prices for potatoes was similar to the previous year, and prices were about the same as in 2020. But due to the rush in the potato market in Russia, potatoes in Uzbekistan began to rise in price as a domino effect at the end of September 2021. Three weeks later, the average wholesale prices for potatoes increased from 3 500 to 5 000 UZS/kg ($0.33-0.47), i.e. by 43%, in just one week – from October 14 to October 21, 2021.

The decision to exempt the imports and sale of potatoes from VAT adopted on October 21, 2021 served as a factor restraining further growth in potato prices in the domestic market. Average wholesale prices for potatoes in Uzbekistan ranged from 4 500 to 5 000 UZS/kg ($0.42-0.51) from November 4, 2021 to January 7, 2022.

As of January 7, 2022, the average wholesale prices for potatoes were 5 000 UZS/kg ($0.46), which is almost 1.5 times higher than on the same date in 2020 and 2.3 times higher than on the same date in 2019.

In 2021, imports of potatoes to Uzbekistan exceeded half a million tonnes for the first time, setting a new record. According to EastFruit analysts, the country imported 559,100 tonnes of potatoes in 2021, which is 33% more than in 2020.

Potatoes have become the main import commodity in Uzbekistan’s fruit and vegetable sector over the past few years. Until 2016, the annual imports volume of potatoes did not exceed 50 thousand tonnes per year, and in 2017 the imports amounted to 194 thousand tonnes. Accordingly, the volume of imports increased almost by 3 times from 2017 to 2021.

Сообщение Uzbekistan extended tax incentives for imports and sale of potatoes появились сначала на EastFruit.

Georgia intends to start negotiations with the United Arab Emirates (UAE) to conclude a free trade agreement. EastFruit analysts figured out how to maximize the benefits of Georgian producers of berries, nuts, fruits and vegetables from the new opportunities that will open up thanks to the cancellation of tariffs.

The UAE is a center of trade in the Middle East and a very attractive market that is growing, striving for diversification and has a very high purchasing power, thanks to a GDP per capita of $43 000 (2019). Imports of fruits, nuts and vegetables  have been growing over the past two decades, and in total reached about $3 billion per year, excluding 2020 with a slight decline due to the pandemic.

In the UAE, imports of agricultural products are taxed on average 6% for WTO members, among which is Georgia. Despite this low tariff and high demand for imported products, Georgia did not export much to the UAE. Georgian exports of fruits, nuts and vegetables to the UAE totaled only $3.2 million over the past 8 years. Annual exports peaked in 2021 at $1.1 million, with 72% coming from the export of hazelnut kernels and fresh blueberries. The two main factors holding back imports are expensive logistics and insufficient product quality for the demanding UAE market.

Read also: Georgia: TOP-10 events of the produce business in 2021

As key Georgian exporters to the Middle East explain, so far the only way to deliver fruits, nuts and vegetables from Georgia to the UAE is by plane. Of course, this is very expensive, but the problem is much more serious: there are no cargo planes. Georgian exporters have to put their goods to the luggage compartment of passenger flights that are not intended for the carriage of perishable goods such as fruits and vegetables and do not have a temperature and humidity control. This limits the volume of exports, and increases the risk of deterioration in product quality during transportation.

However, there were the first attempts to export table grapes by land to Qatar in refrigerated container through Azerbaijan and Iran last year. Also promising is the opening of a new transport corridor to connect the Persian Gulf with the Black Sea.

In addition to logistics problems, it is usually difficult for Georgian exporters to obtain export-quality products in large volumes. They say that there is demand from the Middle East and importers are ready to sign contracts, but local suppliers will not be able to provide them with products of the required volumes and quality.

At the same time, many Georgian products are in demand in the UAE. Moreover, these trade positions have one of the highest growth rates among imports of fruits, nuts and vegetables to the UAE. Georgia could also export these products to the UAE in higher volumes.

Сообщение Will free trade with the UAE help boost Georgian exports? появились сначала на EastFruit.