EastFruit analysts have found that table grapes are becoming increasingly popular among Georgian consumers. The country imported 300 tonnes of table grapes in January 2022. They ranked 8th in terms of import value among other fruits, vegetables and nuts.

Imports of table grapes in January this year are on average 80% higher than January imports over the past 9 years. 95% of imported table grapes came from Armenia, 5% from Turkey. Imports usually peak in December, and this season, December imports were also the highest at 600 tonnes.

Noteworthy, Georgia has imported just over 2 000 tonnes of table grapes over the past 12 months. This is also the highest volume for the period, nearly twice the average for the same period since 2014. Furthermore, imports over the past 12 months have doubled exports, even though exports are also record-breaking.

While local production is taking its first serious steps, it is export-oriented. Earlier, EastFruit wrote about a major breakthrough in the exports of Georgian table grapes. Now the data tells us that table grapes can also be sold domestically in quite large volumes. Local demand is growing, which is good news for producers.

Сообщение Turns out Georgia does love table grapes появились сначала на EastFruit.

Uzbekistan harvested 1.8 million tonnes of table grapes in 2021, 11.5% more than in 2020, EastFruit analysts report, referring to the data by the Ministry of Agriculture published at the end of last year.

Read also: Agrifood forecast for 2022: record price increase, fertilizer shortage, declining yields and labor shortage

As EastFruit analysts noted earlier, low precipitation in spring, problems with irrigation in the central and southern regions of the country, as well as hot and dry summers, led to a decrease in grape yields in Uzbekistan in 2021. Despite this, the volume of production of table grapes in 2021 was still higher than in 2020, due to the expansion of vineyard areas. Over the past few years, Uzbekistan has been actively expanding the area of ​​​​vineyards, with tens of thousands of hectares of new vineyards having been planted. Over the past four years, 210 billion UZS ($19.6 million) of subsidies have been allocated to the sector. As a result, the average wholesale prices for grapes in Uzbekistan in the 2021 season were about 25% lower than in 2020.

The analysis of prices, production and export of grapes in Uzbekistan, plans to further expand the area of ​​vineyards in the country are available in the EastFruit material “Uzbekistan 2021: fruits, nuts, grapes – the analysis of prices, production and exports”. In addition, the broad-scale concessional financing announced by the government in the last months of 2021, subsidies and a new system for the development of the fruit and vegetable sector of Uzbekistan will also contribute to the increase in vineyards in the country.

Сообщение Production of table grapes in Uzbekistan increased 12% in 2021 появились сначала на EastFruit.

2021 was probably one of the most controversial and difficult years for the economy and the produce industry in Russia over the past few years. In the first half of the year, the country’s economy was still in the aftermath of the collapse in 2020. COVID-19 restrictions in Russia were quite tough sometimes, and the vaccination rate is still unsatisfactory.

On the other hand, the second half of the year was more successful for the Russian economy, and, according to the World Bank’s forecasts, the country will have one of the highest GDP growth rates in recent years by the end of 2021. Oil prices, on which consumer demand for goods (especially imported ones) in Russia is largely dependent, also increased in comparison with the crisis year of 2020 and even exceeded five- or even six-year highs at times! In addition, we note the relative stabilization of the ruble against the US dollar, which allowed food importers to avoid setbacks in consumption due to a sharp drop in the price of the national currency.

The fruit and vegetable sector in 2021 was no exception, and all its participants felt quite sharp ups and downs. For Russian consumers, the year began with record prices for bananas due to rumors about them going extinct. After that, consumers were shocked by the prices of beets and carrots in the spring and summer. In the fall they were unpleasantly surprised by the cost of cabbage, and as early as next year they may face a shortage of potatoes.

In turn, producers suffered heavy damage from frosts and bad weather in the summer and, despite the occasional shortage in the market, complained about the lack of demand from retail chains that gave preference to imports. What was especially important for producers of seasonal products, the problem of labor shortages in Russia was not resolved and only intensified.

Traders will also face tougher work conditions on the Russian market due to the closure of Belarus for the supply of fruits and vegetables from the EU and some other countries. Moreover, the issue of introducing restrictions on apple imports during their active sales already rises at a serious level in Russia itself. Both factors can significantly complicate the work of wholesale operators on the Russian market, especially those who are focused on import trade.

We cannot but mention the positive aspects. Despite problems in the country’s economy, consumer demand for certain groups of goods showed active growth rates. Russia will be able to set a record for the import of such exotic products as sweet potatoes, asparagus, artichoke, durian, Brazilian and macadamia nuts, avocado and mango this year. Berry imports will also hit a record, but the reason will still be a drop in their production and quality problems due to late spring and bad summer weather.

We also note the natural, but still stunning results of the development of the country’s greenhouse industry, which allowed it to switch to exporting greenhouse vegetables to the EU and Eastern Europe in just 5-6 years. In particular, Russia supplied greenhouse cucumbers to the Ukrainian market for the first time.

We bring to your attention the 10 most important events of the Russian produce market in 2021.

1. Beets and carrots in Internet trends.

Event No. 1 of 2021, which was noted at all levels, from consumers to the government of the Russian Federation, was a sharp increase in prices for table beets and carrots in spring and summer.

Participants in the Russian market expected a shortage of beets and carrots even during the harvest in 2020. Due to bad weather in the summer and autumn of last year, Russian farmers reduced the production of beets and carrots, and their quality was low. Naturally, this strengthened the belief that prices would go up sharply in spring, since low-quality products were put into storage. But no one could have foreseen what actually happened in the spring and early summer of 2021!

Firstly, the cold spring delayed the start of harvesting local early root crops in Russia in 2021. Similar was observed in its neighboring countries. Secondly, heavy rains prevented the harvest of early beets and carrots after the start of the season. Thirdly, neighboring countries also ran out of stocks of last year’s root crops fast. As a result, there was nothing to satisfy the market demand, and prices soared upward.

During the peak periods of the summer of 2021, the average price for beets and carrots in Moscow reached $0.90/kg, and there were so few products offered that they became trends of the Russian Internet for some time. From Twitter to Pikabu.ru, the shock from the price of root vegetables has filled the Russian Internet. Let us recall a few humorous messages that became trends then: “More than three beets in one family at a time can serve as a reason for depriving the family of child benefits”, “Beets will soon become so expensive that they can be presented for a wedding or birthday” etc.

The main recognition of event No. 1 for the Russian fruit and vegetable market was the mention of beets in the material of the satirical news agency “Panorama” called “The Security Council will meet to discuss prices for beets“. As often happens, Panorama turned out to be close to the truth, and the issue of record prices was raised by the Deputy Prime Minister of the country at a meeting of the President of the Russian Federation with members of the government.

Prices for root crops in Russia remained high even after the start of the new season. It would seem that record prices in spring and summer should have attracted the attention of Russian farmers, and the areas planted with them were expected to rapidly grow in the fall of 2021. But due to the influence of weather, the average prices for root crops in Moscow in mid-December were 70-80% higher than last year and remain record!

2. Autumn record for cabbage prices.

Nevertheless, rising prices for root crops were not the only landmark event in autumn and the beginning of winter of 2021, as cabbage made the most unpleasant surprise for Russian consumers – event No. 2 on the Russian market in 2021.

The fact is that prices for root crops in Russia, although now much higher than last year, are still relatively stable. In addition, Russian traders can count on a possible increase in production in neighboring countries and hope to maintain a high-quality supply in their markets by spring.

As for cabbage, the situation is the most catastrophic now. The average price for cabbage in Moscow in September was twice as high as last year, but the difference reached 4.2 times by mid-December, and the price exceeded $0.50/kg!  Cabbage is the most expensive vegetable of the “borsch set” in Russia now, affecting both consumers and market participants, as finding free volumes for import is becoming increasingly difficult every day.

Moreover, the rapid rise in prices for cabbage in Russia has already caused a domino effect in neighboring countries, reducing the possibility of imports by next spring. Thus, Ukraine, relying on the consistently high demand from Russian buyers, sharply increased the supply of cabbage to the Belarusian market in autumn. As a result, the supply of high-quality cabbage on the Ukrainian market had decreased by December, and the prices had grown so much that Ukraine started importing cabbage from Poland. Similarly, prices for cabbage in Uzbekistan have skyrocketed, and local farmers are expecting record earnings from the exports of early cabbage to the Russian market next spring.

Thus, a rather interesting situation may develop on the Russian cabbage market by spring 2022. The offer of last year’s cabbage, most likely, will not fully satisfy the demand, since there will be nowhere to get it. On the other hand, there is a high risk of oversupply in the market for early cabbage, especially if the weather conditions for local farmers in Russia are more favorable.

As a result, a sharp increase in supplies of both local cabbages and early ones from Uzbekistan, North Macedonia, other countries of the Balkan Peninsula and Iran is quite likely. In turn, it will cause an equally rapid decline in prices.

3. Expected shortage of potatoes.

Beets and carrots were a shock for Russian consumers in spring 2021, and white cabbage replaced them in autumn – these events have already passed or have become clear. Event No. 3 on the Russian market in 2021 refers to a more distant future – an emerging shortage of potatoes.

Potato prices in Russia in the first half of the 2021/22 season were also record-breaking. In autumn, the average price for potatoes grew daily and was 2-2.4 times higher than last year. Russia actively imported potatoes during its own harvest, which was previously uncommon for the country.

Moreover, potatoes were imported to the Russian market not only from rather unusual countries, such as Iran, but even from those, where Russia had exported potatoes earlier – Georgia and Moldova. Ukraine, where prices were also growing fast, supplied its potatoes to the Russian market, too.

As of mid-December, the Russian potato market appears to be saturated with supply and prices have gone down. Nevertheless, the situation by the spring of next year will only depend on the stocks that local farmers and wholesale companies have filled with imported potatoes.

If there are enough high-quality potatoes in the storages of Russian companies by that time, the situation will be relatively stable. Nevertheless, even the slightest problems with the supply of potatoes in spring 2022 will lead to an even more acute shortage, as there will be almost nowhere to import them!

Potatoes from the EU will not enter the Russian market due to the import ban recently introduced by Belarus. Possible supplies of potatoes from the EU to the Russian market through Serbia will not fully cover the volume of past re-exports through Belarus. According to local market participants, the area planted with potatoes for harvesting in spring 2022 has significantly decreased in Egypt. It is more convenient for Pakistan to supply potatoes to the markets of the Middle East (where they are more expensive) or Uzbekistan (where logistics are cheaper), and the harvest in Iran alone is not enough to fully meet Russian demand.

As a result, of the possible close suppliers, only Ukraine remains, where prices are now more than two times lower than in Russia. Nevertheless, large volumes of high-quality potatoes have already been exported from Ukraine in autumn 2021. And as recent events have shown, the possibility of deliveries through Belarus can disappear with literally one stroke of the pen of the Belarusian leadership.

4. Russian cucumbers on the Ukrainian market.

The first ever entry of Russian greenhouse products into the Ukrainian market can be said to be event No. 4 on the Russian fruit and vegetable market in 2021. However, it is still more of a private nature, and the greenhouse sector of the Russian Federation should be considered in a broader perspective.

The rapid development of the greenhouse vegetable production in Russia with government subsidies and active investment support has finally started to bear fruit. Naturally, not all the finance allocated by the state for support reached the addressees and turned into modern greenhouse complexes. And it is also natural not to completely trust government statistics, which have shown a sharp increase in vegetable production in greenhouses since 2015.

What you can trust more is the statistics of the imports and exports of greenhouse cucumbers in Russia, and the trends are clear here: the imports of cucumbers decreased from 149 thousand tonnes to only 69 thousand tonnes from 2015 to 2020. The imports of tomatoes fell from 671 thousand tonnes to 490 thousand tonnes during the same period. Another decline in imports can be expected in 2021, since the indicators for January-October 2021 are also lower than last year’s.

At the same time, Russia began to actively exports its greenhouse vegetables (mainly cucumbers) last year. Of course, the volume of exports is not yet comparable to imports, and the country is still far from being a net exporter. Nevertheless, the very fact that Russian greenhouses are entering foreign sales markets is a huge step forward for a country that has always been an importer of greenhouse products.

Until 2020, the main volumes of greenhouse cucumbers were supplied mainly to the temporarily occupied territories of Ukraine in Donetsk and Luhansk regions. That is, they could not be considered a full-fledged export. But Russian greenhouse cucumbers have become available in Belarus, Moldova, the Caucasus countries and the EU since last year. The trend only intensified in 2021, and the volume of supplies to markets outside of the temporarily occupied territories of Ukraine in January-October 2021 was for the first time lower than exports in other directions!

Let’s combine these facts with the energy crisis in Europe this year. Given one of the lowest costs for heating greenhouses in Russia, it becomes a new powerful player in the market of greenhouse products in Eastern Europe – this would sound incredible several years back!

As for direct supplies to the Ukrainian market, we note that they were possible only for several days in mid-November. The volumes were small, and the difference in prices did not allow deliveries. Nevertheless, this event should still be considered in the context of the active development of the greenhouse industry in Russia over the past few years, the results of which are obviously positive.

5. Apple twists and turns of the year.

We suggest to move from the vegetable segment of the Russian market to its fruit and berry part, and we chose the apple market in Russia as the event No. 5 in 2021. The number of significant events on the apple market in 2021 was so high that we decided not to single out any of them, but to consider the situation comprehensively.

From the very beginning of the year, the participants of the Russian apple market noted the weakening demand, but hoped on the price rise by the spring-summer, typical for Russia in recent years. Nevertheless, demand did not increase by spring, and for the first time since at least 2017, the price of apples decreased in summer, in comparison, for example, with March.

That is, the country approached the start of the new apple season-2021/22 with a record harvest of apples in the countries of the Northern Hemisphere. It also experiences record stocks of last year’s apples in countries exporting them to Russia and a weakening demand for apples from buyers, who often prefer other products.

Despite the weakening demand, competition in the Russian market has only grown, both between local farmers and imports, and between importers from different countries. For example, the emergence of competitors from Iran on the Russian market back in February last year was a real shock for Moldovan apple suppliers. Then apple production in Iran reached a record level in autumn 2020, and Iranian apples continued to knock down the price on the Russian market in spring 2021.

As a result, under the pressure of high imports and the development of its own fruit production, apple prices in Russia literally collapsed at the beginning of the 2021/22 season! For example, in just two weeks at the end of August – beginning of September, “Gala” apples in Russia have fallen in price by a third. Subsequently, the prices for apples fell even more, and at the end of 2021, apples were sold in Russia on average 23% cheaper than last year. Apple prices were lower only in 2018.

Weakening demand for apples, followed by a rapid drop in prices, could not fail to cause a sharp reaction from local growers, who still felt serious competition with imports. In August of this year, when the main varieties of autumn and winter apples had not yet entered the market, rumors began to spread on the Russian market about possible quotas for apple imports.

Thus, a request was sent to the Prime Minister of the Russian Federation by branch associations of Russian farmers with the introduction of quotas on apple imports from September to April. There was no immediate government response, but access to the Russian apple market was complicated for suppliers from Serbia, Turkey, Iran, New Zealand and South Africa in November 2021.

Nevertheless, new significant restrictions on apple imports have not yet been officially introduced by the country’s authorities, and the ban on the imports of vegetables and fruits introduced by Belarus in relation to the EU and some other states can be considered the main gift to Russian growers. It is this decision that will be able to restrict the access of apples from European countries (in particular, Poland) to the Russian market, although trading companies are most likely to once again find another opportunity for re-exports.

For example, apple supplies to Russia through Serbia that already has such experience (albeit less significant than Belarus) seems quite probable. In addition, apples from Serbia can be supplied to the Russian market duty-free under the existing FTA between this country and the EAEU.

6. Record-breaking bananas.

While the price situation on the apple market could be called “collapse”, the segment of another most popular fruit was characterized by record high prices, especially in the first half of the year. Event No. 6 on the Russian market is a sharp rise in prices for bananas, that in the minds of consumers coincided with the spread of information about the possible extinction of bananas!

Prices for bananas at the end of winter and in the first half of spring in Russia were the highest since 2018, and reached at least a five-year record by the end of April – May! Bananas were expensive almost everywhere during that period, and their import to Russia in January-May 2021 also reached a five-year minimum.

The widespread record prices for bananas were associated with the situation in one of their key supplying countries in the global market – Ecuador, which has been hit by a series of disasters and setbacks. Social protests, the escape of the government from the capital, the devastation of the country by the COVID-19 pandemic, the collapse of global demand for bananas in 2020 after their record production, the eruption of the Sangay volcano in September 2020 and March 2021… This is not an exhaustive list of what the global leader in banana exports is facing!

One can only imagine what was going on in the minds of consumers when the most popular fruit became record-breaking expensive, and information about the possible extinction of bananas began to spread. It was associated with the rapid spread of the Tropical Race 4 (TR4) disease, which affects primarily the most exported Cavendish banana variety. In April 2021, this disease was already recorded in Peru, neighboring Ecuador.

In the meantime, Ecuadorian exporters had to urgently respond to a problem that arose nearby and reassure global market players of complete control of the situation, but the history of banana exports shows that Cavendish became the most exported banana variety only in the 1950s. Before that, almost no one knew about it. The Gros Michel variety was in the greatest demand on the global market, which was almost completely destroyed by the rapid spread of TR4.

7. Record import of berries.

Let’s move from the fruit sector to its berry segment, as it is there that event No. 7 took place on the Russian produce market – a record import of berries over the past year. A record figure is already evident even in the first 10 months of the year for two key berries of Russian imports at once: strawberries and blueberries!

In January-October 2021 alone, the country imported over 60 thousand tonnes of strawberries, which is almost 1.5 times more than the total volume in 2020! Basically, producers of strawberries from Turkey, Belarus and Serbia took advantage of such a sharp increase in demand from importers from Russia. At the same time, Turkey provided almost half of all imports to Russia for the specified period, and the total share of Belarus and Serbia amounted to about a third.

The record imports of strawberries was mainly associated with the weather in Russia. Firstly, snowfalls in December 2020 destroyed a large part of greenhouses in the southern regions of the country, which led to a decrease in the supply of strawberries in spring next year. Secondly, the late and cold spring significantly delayed the start of the field berry season, and imports filled the vacant place freely. Thirdly, spring and summer were rainy, impeding both the stable harvest of berries and the provision of its stable quality, which was an additional factor supporting the growth of interest in imports.

In the meantime, record blueberry imports were not affected by local production levels due to their nascent stage. According to the research “Market of tall blueberries in Eastern Europe” by the “APK-Inform: Vegetables and Fruits” project, the area planted with blueberries in Russia does not yet exceed several hundred hectares. Thus, the volume of harvested local berries cannot yet have any large impact on the market, and it is almost entirely dependent on imports.

The volume of blueberry imports in Russia in January-October 2021 has almost reached the total volume in 2020 (8.7 thousand tonnes VS 8.8 thousand tonnes). Considering the stable growth rates of interest in blueberries, the record is guaranteed to be set by the end of the year! The demand for imported blueberries in Russia is satisfied by both distant countries of the Southern Hemisphere (Chile, Peru) and suppliers from neighboring countries, such as Belarus and Georgia.

Russia is the main and almost the only direction of exports for both Belarus and Georgia. It was the growth in demand from Russian importers that allowed Georgian exporters to increase supplies by almost 1.5 times in 2021. The players of the Belarusian berry market also place their main stake on sales in Russia. Belarus mostly re-exported blueberries from the EU and Ukraine only a few years ago, but Belarusian blueberries are now supplied to Russia. Naturally, there are serious questions about the quality, and blueberries are still offered at the minimum price, but it will be quite difficult to ignore this fact in the future.

The last interesting fact of Russian berry imports in 2021 is the growing importance of local blueberries for the market. The country showed an increase in imports every month from April to October 2021 (the most active sales of blueberries), with only one exception. Imports decreased in comparison with last year, and the share of Russian blueberries increased in July, during the peak of local berry harvesting. This means that, despite the emerging blueberry growing industry in Russia, it has already begun to bear fruit. In other words, in the long term, the window of opportunities for exporting blueberries to Russia during the peak of local production will nevertheless narrow, and the position of Russian berries will grow.

8. A sharp increase in imports of exotic products.

Despite issues in the Russian economy, relatively sharp growth was also recorded in the import of other more exotic products – event No. 8 of the produce market in the Russian Federation.

In the first 10 months of 2021, the country has already exceeded the total volume of imports in 2020 for such products as Brazil nuts, macadamia, asparagus, artichokes and durian. Meanwhile, in the segments of avocado, guava, mango and mangosteen, as well as sweet potatoes and similar tubers, the record import is almost a sure thing, as import volumes for January-October 2021 were at a five-year high there.

Some products from this list can already be taken out of the “exotic” products, for example, avocado or mango. Others still remain unfamiliar to most Russian consumers (artichokes or durians), and some have already crossed the exotic stage, but have not yet achieved mass popularity (asparagus). Nevertheless, the demand for unusual and exotic vegetables, fruits, nuts and berries in Russia is increasing from year to year, as is the consumer’s willingness to expand their fruit and vegetable menu. 2021 was no exception in this regard!

9. Labor problems are on the rise.

Event No. 9 is an increase in labor issue. It is a continuation of the issue of 2020, although the market participants hoped that it would be at least partially solved in the outgoing year. These hopes have remained hopes, and the labor shortage in the fruit and vegetable sector in Russia has only grown.

The shortage of labor is a common phenomenon for countries beginning to develop fruit and vegetable production, especially its fruit and berry segment. It is in this segment that the share of manual labor is the highest. And in order to foresee the intensification of this problem, one has only to look at the experience of other countries that started fruit and vegetable development a little earlier than Russia. For example, this can be Poland, Ukraine or even the countries of the western part of the EU, which now have to find seasonal labor even in such remote countries as Vietnam.

It turns out that for the successful development of the fruit and vegetable production sector, government subsidies, import substitution programs, a ban on the import of products from competing countries, etc. are not enough. One of the most important points, which is often overlooked, is that the plantations must be monitored, the plantings must be cultivated, the crop must be harvested, and then handled and prepared for sale.

All this requires manual labor, as the possibility of mechanizing fruit and vegetable production (especially berries and fruits) is much lower than that of grain or oilseeds, more traditional for Russia. The demand for labor, especially seasonal, is growing along with the growth in the production of berries and fruits that has increased by 1.5 times in the country over the past decade!

The previous year was a shock for many industries, as due to quarantine restrictions in Russia and in the countries from which most migrants come, their number has decreased, and the country is discussing the shortage of labor. The issue in the construction sector was especially disastrous, and the programs of state support for the search and replacement of foreign workers were launched there. Fruit and vegetable production was left alone with this problem, as it could not compete with the construction sector in its influence on the economy.

It would seem that the easing of restrictions in 2021 should have improved this situation, but it turned out it is not that simple. Firstly, farmers involved in the cultivation of vegetables and fruits, as we said above, could not get into state programs for the import of migrants. Secondly, the cost of travel to Russia has increased everywhere due to the more expensive logistics globally. Third, migrants that remained in Russia gradually switched to higher-paid or less difficult work. Fourthly, organizing internal migration and attracting local labor turned out to be an even more difficult task due to the higher demands and requirements of such workers.

10. It could have been, but it did not happen – a turmoil with Turkish mandarins.

The event No. 10 on the Russian produce market is more hypothetical, but due to voluntaristic decisions of the country to ban the imports of certain products, just the discussion of the issue has sowed panic among importers and wholesale companies. We are talking about the “ban on the import of mandarins from Turkey“, which still did not come into force.

Just one inaccurate wording on the Rospotrebnadzor website, and a possible ban on mandarins from Turkey during the peak supply caused panic. Let us remind you that Turkey accounted for more than half of the total imports of mandarins in the Russian Federation last year. In addition, more than 50% of mandarins are usually imported into the country in November-December, and it would be impossible to quickly replace such volumes with supplies from other countries! The issue was that Russian consumers could celebrate the New Year without traditional fruits, and mandarins that would still enter the Russian market would be offered at record high prices.

Fortunately, the ban turned out to be a mistake, and consumers will enjoy the New Year’s fruit, and importers will not have to rack their brains to quickly arrange new shipments. Nonetheless, the latter did have problems in the past year, as we mentioned above. Firstly, the supply of apples from many countries to the Russian market was complicated by the decision of the Rosselkhoznadzor. Secondly, the re-exports of almost all fruit and vegetables from the EU through Belarus just recently became impossible due to the decision by the Belarusian authorities.

Сообщение TOP-10 events in the Russian produce business in 2021 – EastFruit появились сначала на EastFruit.

2021 was not an easy year for Georgian growers and exporters of fruits and vegetables, but despite the difficulties, it ends quite well. Georgian EastFruit team offers 10 main trends and news of the sector.

1. The ability to diversify exports to the most attractive markets while saving on logistics. According to the results of trade in 10 months of 2021, Georgia has already earned almost $150 million from the export of nuts and fruits. The figures for this group are most likely not to change much compared to 2020 and export earnings will be close to $160 million. As for vegetables, we note an unprecedented growth in exports +163 % – from $8.7 million in 2020 to $22.8 million in 10 months of 2021. As for the export structure, the share of Russia is a record one over the past 10 years – 80%. The geography of exports of fruits and nuts from Georgia includes Russia and the EU – 32% and 47%, respectively (based on the data for 2020), but there is a trend towards an increase in exports to Russia this year. While trade with the EU is mainly concentrated on hazelnuts, 80–90% of the rest of the group (berries, stone fruits, apples, citrus fruits) is exported to the Russian Federation.

Although the final trading results for 2021 will be available only in the second half of January, it is clear that the value of Russia as a trading partner of Georgia has grown by 5-7% compared to last year. As the experience of many countries, including Georgia itself, shows, an excessive focus on one trading partner is very risky, especially if it is as unpredictable as Russia. Therefore, the general trend is very negative.

On the other hand, it is gratifying that some Georgian exporters are trying to diversify their exports and are exploring the market of the Middle East. The export of fresh berries (blueberries, raspberries, strawberries) by air is already well mastered, but Georgia is doing bad in exporting such perishable goods by land.

There were the first attempts to export table grapes to Qatar in refrigerated containers through Azerbaijan and Iran this year. This invaluable experience has shown all the difficulties of the process – packaging, the formation of an export batch of high-quality products and the proper control over the entire supply chain. At the same time, we also managed to feel the potential profitability of this direction. Importers from the Middle East give a positive assessment of Georgian fruits and are interested in purchasing table grapes, cherries, peaches, plums and oranges from Georgia.

2. Price and trade swings, records and potato business openings. 2021 started with growers’ protests over low prices for potatoes due to lack of demand, but in the following months external demand increased so much that the export of Georgian potatoes overtook even expensive and trendy blueberries in terms of revenue by July.

Exports in the middle of the year were driven by low stocks and high prices for potatoes in Russia, which previously supplied potatoes to Georgia. Russians bought so many potatoes in the second quarter of 2021 that Georgia even had to import unusually large volumes of potatoes in July and August to meet domestic demand.

When harvest started in September, the exports of potatoes from Georgia became possible again. The reason is the same – high prices for potatoes in Russia due to poor harvests and reduction of areas planted with potatoes. Following the resumption of intensive potato exports in the fall, the Georgian market may face a new potato shortage in the coming months.

Overall, Georgia exported potatoes worth a record $16 million in the first 11 months of 2021, which is 4 times higher than the previous export record. Prices during export periods were the highest (if compared on a monthly basis) in the last 7 years.

The last season has shown that the Georgian supply chain is largely unprepared, with importers buying potatoes straight from fields. However, the situation was unique this year – Russia did not have much choice in where to get potatoes, so the buyers agreed to these conditions. If Georgia wants to be a stable exporter of potatoes in the future, the industry will have to invest a lot of money in storing, washing, sorting and packaging, as well as improving the quality of potatoes.

This is why another major event in the Georgian potato business in 2021 should be noted – some Georgian potato growers became convinced that investments in quality pay off. Potato growers who focused on quality felt more confident and earned more, regardless of the overall supply and demand.

3. Georgia has set a course for the development of the greenhouse sector. According to Georgia’s agriculture development strategy 2030, new greenhouses in the country will be createdon 500 hectares.

Aromatic herbs production in greenhouses is a traditional business for Western Georgia growers who export 50-60% of the country’s fresh aromatic herbs. But the approaches to production, packaging and logistics that we showed in this video remain ineffective and outdated. Therefore, Georgia is gradually losing even traditional markets for fresh herbs, yielding them to Iran and Uzbekistan.

To modernize the sector, increase the technological level of production, handling, cooling and logistics, and thus ensure the export of greenhouse products to a more profitable price segment, as the Italian company Orto Ricci did, the authorities are inviting investors to the country. And if the well-known state project “Plant the Future” and preferential agricultural loans are focused on supporting Georgian companies, then foreign investors are invited to develop the production of vegetables or herbs for supplies to the Russian market or the markets of the former USSR and the Middle East.

The Agrozone Imereti greenhouse cluster provides foreign investors with a unique opportunity to purchase or lease a fully prepared serviced agricultural plot in Georgia through a predetermined foreign investment approval mechanism.

If you have not submitted your application yet, hurry up – applications for participation will be accepted in the Call for Proposals until the end of 2021!

4. Nut production in Georgia is expanding rapidly. In the next 7 years, the production of almonds in Georgia will grow16 times, and the coefficient of self-sufficiency in walnuts has already approached 100%. Therefore, growers who sell the first harvest from modern almond and walnut orchards to the local market are already planning to export. Having experience in managing the quality of hazelnuts, Georgian walnut growers invest in further processing: drying, shelling and sorting. This year two new plants joined the existing walnut processing plant, the work of which is available to watch here. Of particular interest was our video about the work of the Anigosi walnut drying and processing plant.

According to the Association of Almond and Walnut Producers, next year five more factories will be added to the existing capacity, which now reaches 14 tonnes of walnuts per hour. At the same time, there is a shortage of capacities for processing almonds. According to EastFruit, the first almond processing plant is scheduled to open in early 2022. You can see how almonds are harvested in the largest orchard in Georgia here.

In addition to the most popular nuts in the world – almonds, walnuts, hazelnuts and pistachio – American pecans also grow in Georgia. They were initially planted for durable wood production, but hazelnut importers appear to be interested in pecans as well. Although there are no commercial plantations in the country yet, this nut is already being handled for export to traditional markets – the EU and China. According to the growers’ forecasts, the current potential of Georgia is 150 tonnes of pecans per year.

5. Growth in exports and a harvest of hazelnuts with severe quality problems. The situation on the hazelnut market remains complicated. Despite the fact that global trade in hazelnuts is fallingon average by 8% per year, additional pressure on prices is exerted by the collapse of the Turkish lira, the rate of which has more than halved since the beginning of the year. Therefore, Georgian trade slowed down in November and the factories are working on fulfilling contracts.

The hazelnut season turned out to be rather short, as due to the cold spring and heavy rains in August, the hazelnut harvest in Georgia began a week or two later than expected. The rains also affected the quality of hazelnuts from Western Georgia. Therefore, along with the record export volume, we also noted a record number of returns of hazelnuts from the EU due to non-compliance with quality and safety requirements. There were 13 returns in the 2020 season, and there are already 25 returns in the 2021 season, although it’s not over yet. At the same time, the growers claim that when repeated analyzes were carried out in 2021, no traces of aflatoxins were detected.

Could the struggle for quality influence the decision of the global leader Ferrero to sell 1.8 thousand hectares of hazelnut orchard in Georgia to a local company? The question remains open.

Despite the problems, Georgian hazelnut exporters still managed to get the highest export earnings in the last five years. This was due to a poor harvest in Italy and, accordingly, a sharp increase in demand for Georgian inshell hazelnuts, which Italians use for processing. As a result, the export of inshell hazelnuts increased to a record 5.9 thousand tonnes and $16 million in August-November 2021. The total income from all hazelnut exports, which is slightly overestimated due to sorting and re-export back to the EU, amounted to $68 million for the specified period.

The general trend of the last few years – the production of hazelnuts in Georgia is moving to the east – to Kakheti, where favorable conditions are created for the cultivation of hazelnuts due to climate change. Commercial hazelnut plantations in eastern Georgia have already been established by a Swiss chocolate maker, which was one of the main news of the year for the sector. On the contrary, Ferrero sold its plantations in Georgia.

6. The first commercial avocado plantation was established in Georgia. We have repeatedly noted that avocado is the fastest growing positionin the global fruit and vegetable trade. In this regard, the establishment of the first commercial avocado plantation in Georgia by Nutsge on 6 hectares in Lanchkhuti, Guria municipality, was a great news for the region. The owners talked little about the details of the project from the start, although they hoped that by planting the right varieties and creating the right conditions, their project would be a success. The first winter requires special attention, when the seedlings will pass the frost resistance test in practice.

The farm has not yet passed the cold test, as the harsh weather in Georgia is expected in the coming months. Nevertheless, the company has already covered the trees with agrofibre to protect them from frost. It is expected that the temperature in winter will not drop below minus 10 degrees Celsius in the area where the farm is located.

Some problems with the seedlings have already showed up due to excess moisture, which in some plants caused root rot. Heavy rains in late summer and early fall this year have created problems not only for avocados, but also for traditional horticultural crops in Western Georgia, such as hazelnuts and mandarins. Although some of the seedlings have dried up, the company has no plans to replace them with imported seedlings. They plan to work only with plants that survive, hoping to start producing their own seedlings in the future.

7. Blueberry exports growth by 50% to a new record level. Of course, this is a new record. The 2021 season started a week later due to unfavorable weather, and the first early batches become availableon the market at the end of May. Export expectations were high from the outset, and they were confirmed – Georgia received record revenues from blueberry exports in the 2021 season. Export revenue increased by 48% compared to the previous season and amounted to $5.5 million as of August 2021.

By the end of the season, blueberry exports reached almost 1,000 tonnes and increased in volume by 44% compared to 2020. The volume of blueberry exports from Georgia has grown 5 times in 2 years!

There were also some obstacles – panic among blueberry growers and exporters was caused by new rules for access to the Russian market. Exporters refrained from purchasing blueberries for some time after receiving this information, which led to a sharp drop in domestic prices and a temporary suspension of exports. It is possible that if not for these problems, the exports of blueberries from Georgia would have been even higher at the end of the 2021 season.

The EastFruit team visited the orchards during berry harvesting, studied the details of their production and exports, and shared an unique video about the export opportunities of Georgian blueberries. If you are planning to import blueberries from Georgia, EastFruit has prepared a list of the largest blueberry growers with contacts, volumes and photos of plantations.

Blueberries are attracting more and more investments, both in production and technology improvements. A representative office of a leading producer of blueberry seedlings has been operating in the country for the second season.

8. Georgia is increasing the exports of persimmons. Despite the fact that the persimmon harvest was damaged by severe hailin the east of the country in the Kakheti region in 2021, and in some cases it was completely destroyed, the production and exports of persimmon in Georgia increased again.

In 2021, Georgia set a new record for persimmon exports. As of November 2021, Georgia exported 10.2 thousand tonnes of persimmons, and export earnings reached $5.1 million, which is already 9% more than in the same period last year. However, the export data for the 2021 season will change again in December as the exports are still ongoing.

You can find out which persimmon varieties prevail in Georgia at this link.

9. Breakthrough in the production of table grapes. Largely thanks to the promotion of information on the prospects and opportunities for growing table grapes in Georgiaand investments in modern technologies of growing, storage and processing by the FAO and EBRD project, within the framework of which the EastFruit platform was created, Georgia made a real breakthrough in this sector in 2021.

As of the end of November 2021, Georgia had already exported 775 tonnes of table grapes from the 2021 harvest, which is 3.2 times more than exports in the same period of 2020. Let’s remind that earlier Georgia was a large importer of table grapes, despite the excellent conditions for their cultivation.

Almost all exports of Georgian table grapes were made to Russia, creating risks for the industry. Therefore, diversification of exports should be a priority for Georgian growers and exporters of table grapes in the next season.

It is gratifying that Georgia is focusing on the popular and well-known table grape varieties: Red Globe, Thompson Seedless, Crimson Seedless and Regal Seedless. A Table Grape Association has been already established in the country.

In 2021, the first table grapes were harvested by Georgia’s largest grower that owns 30 hectares of modern vineyards. In the first year, the company harvested up to 100 tonnes of table grapes and sold them on the local market.

10. The success of the Georgian kiwi in the global market. Georgia managed to get into the global trade trend and become the leading regional producer of kiwi. Kiwi was second only to blueberries, avocados, cherries, raspberries, durian and mango in terms of growth in global trade in fruits and berries. It is also interesting that Japan, which is demanding on the quality, is the main sales market for Georgian kiwi – since 2016, about 70% of kiwi exports from Georgia have accounted for Japan. Japan also pays a fairly high price for quality fruit. A lot of interesting information about Georgian kiwi is available here.

If you think that we have missed something of the important events of the Georgian produce business in 2021, please write about it in the comments to this article.

Сообщение Georgia: TOP-10 events of the produce business in 2021 появились сначала на EastFruit.

From mid-December to the present moment in Moldova, the average wholesale price for inshell almonds dropped by 5 MDL/kg to 170 MDL/kg ($9.71/kg). However, the price is still slightly higher than the December level last year (160 MDL/kg, $9.2/kg).

At first glance, the situation seems strange considering that prices for all other nuts, especially walnuts, have been growing for more than a month and almost reached record levels. However, according to the UAPCN, the Union of Association of Walnut Crops of Moldova, several important factors should be taken into account when assessing the situation in the local almond market.

The first is the downward dynamics of almond production in the country. Due to the spring frosts of the last few years, removing old almond orchards has accelerated. This year, according to expert estimates, the area of ​​fruiting almond orchards in the country has dropped below 1,000 hectares. The harvest of export-quality almonds is unlikely to exceed 500-600 tonnes (weight of fruits in shell).

The second factor is the increasing differentiation in the almond segment of the nut industry: no more than a dozen relatively large farms work are exporting and up to hundreds of small producers supply the domestic market. The bulk of the almonds are exported under a few contracts to Italy, Spain and Turkey (while walnuts from Moldova are supplied mainly to Germany, Netherlands Austria and France). Competition between the exporters for almonds in the domestic market of Moldova is low.

The third factor is the relatively low demand for almond kernels from Moldovan consumers. Accordingly, in December, small wholesale lots of almond kernels could be purchased at a price significantly lower than the average level – 140-145 MDL/kg ($ 8-8.3/kg).

Сообщение Almonds got cheaper in Moldova, but the price level is still high появились сначала на EastFruit.

According to a preliminary assessment of the organizations of fruit growers in Moldova, the plum harvest in the country amounted to around 105-125 thousand tonnes this year (in 2020 – about 65 thousand tonnes, in 2019 – 109 thousand tonnes, in 2018 – 133 thousand tonnes). Despite an almost twofold increase in the production compared to last year’s level, plum exports are unlikely to reach the level of 2020 this year.

As of early December 2021, around 52 thousand tonnes of plums of the new harvest were exported from the country. According to expert estimates, less than 1,000 tonnes of plums remain in the cold storage facilities of growers and traders, which will be sold on the domestic market. The export of plums of the 2020 harvest amounted to about 56 thousand tonnes.

According to participants the country’s fruit market, “the surplus of the increased plum harvest in 2021 was mainly used for processing.” According to the members of the Speranța Con Association of Canned Fruit and Vegetable Producers, about 10-12 thousand tonnes of plums were processed into paste – significantly more than last year. According to preliminary estimates of market players, enterprises for the production of dried fruits purchased 20-30 thousand tonnes of industrial plums (their warehouses were empty since last year’s poor harvest, and the demand for dried fruits was great).

It is extremely difficult to determine the volume of plum sales on the domestic fresh market, but it is in no way less than several tens of thousands of tonnes. In the current fruitful year, it is likely to have increased – plums have been and remain the most affordable type of stone fruit.

Сообщение 2021 in Moldova was marked by a higher plum harvest and reduced exports появились сначала на EastFruit.

According to information communicated by the Ministry of Agriculture of Tajikistan, the production of vegetables and potatoes increased in the country in 2021. However, prices remain high. EastFruit figured out the reasons.

According to the Ministry of Agriculture, Tajikistan harvested 144 thousand tonnes more potatoes and more than 100 thousand tonnes more vegetables in 2021. Unfortunately, there is no breakdown by how much the production of each type of vegetables has grown, and this includes tubers, cabbage, and even tomatoes and cucumbers.

Now let’s see what the market thinks about production growth.

Potato

Potato prices in Tajikistan are currently at a record level for this period in recent years and continue to rise. Wholesale potatoes are now sold at 4.2 TJS per kg ($0.37 per kg), which is 1.5 times higher than at the same time in 2020 and 2.2 times higher than in 2019.

What is the reason for such a rapid rise in prices for potatoes in Tajikistan, if their production has increased? Recently, there were reports of increased demand for Tajik potatoes from Uzbekistan, where prices were at record highs. Therefore, the price rise may be partly due to the growth of exports, as potato prices in Uzbekistan have decreased this week, while in Tajikistan they have risen again. However, prices have been high for quite some time, and the official data on growth in potato production may be somewhat overestimated.

Onion

As of November 11, 2021, onion prices in Tajikistan in the wholesale trade are 1.6 TJS and are at the same level as on the same date in 2020. However, this price level is 1.5 times higher than in 2018-2019.

So far, no information has been received on the growth of onion exports from Tajikistan. Prices for Tajik onions are currently at about the same level as in Uzbekistan and have a slight upward trend. Uzbekistan already supplies onions to Ukraine, but Tajikistan cannot do this yet, as logistics are more expensive from Tajikistan. Thus, it is most likely that onion production, at least, did not decrease compared to 2020.

Carrot

Prices for carrots in Tajikistan are 30% higher than last year, but in 2018 they were higher than now. However, if production rose, prices should have been lower, provided there was no surge in domestic demand or exports.

However, prices in Tajikistan are much lower than in Uzbekistan – the difference is more than twofold. Moreover, both in Uzbekistan and in Tajikistan there is a tendency to reduce the price of carrots now. But in Russia and Belarus, prices are high and there are prospects for their growth. Therefore, it is possible that these countries will become importers of carrots from Central Asia.

Сообщение Tajikistan reports increase in potato and vegetable production, but prices are higher than a year ago появились сначала на EastFruit.

The Association of Almond and Walnut Growers of Georgia held a conference on November 4, 2021 where the results of 2018-2021 were summed up. The event was attended by farmers, as well as representatives of government and donor organizations.

Leri Tabatadze, a member of the board of the association, spoke about the current season and the vision of the association for the development of the sector.

According to the association, farmers harvested a total of 800 tonnes of dry inshell walnuts in the 2021 season, most of which will be sold on the local market. According to Tabatadze, the quality of walnuts from the new orchards is not yet sufficient for exports in the  European market. The crop has already been harvested. Inshell walnuts from new orchards are sold at 7-8 GEL/kg ($2.21-2.53), while the price of kernels ranges from 25-30 GEL/kg ($7.9-9.5). The market is not yet saturated and Tabatadze believes that prices will not fall in the near future, because Georgian walnuts will replace imported ones this year.

Tabatadze also spoke about the current state of the walnut and almond processing sector. There are only 3 walnut processing enterprises operating in Georgia now, but 5 more are planned to open next year, which will satisfy the market, he says. As for almonds, according to Tabatadze, it is more complicated, since there are no almond processing plants in the country yet. Processing is an important part of the almond value chain, as export markets mainly demand almonds without shell. However, 2-3 almond processing plants will be opened with government support next year, which will help create export products, he said.

In addition, Tabatadze raised the question of exemption of shelled walnuts and almonds production from VAT. The association believes this will help the sector get out of the shadow market, as well as compete with imported nuts. According to Tabatadze, the state had previously made such a decision on hazelnuts, which brought positive results. The Association plans to lobby for this issue in government agencies.

Read also: Hazelnuts exports from Georgia: Official trade data looks good but is not reflecting the whole picture

The association will act as an intermediary between growers and government agencies, and will also facilitate the exchange of information between farmers and processors, for example, on where they can take their crops for processing. The goal of the association is to create services to attract local growers.

The Almond and Walnut Growers Association was established by farmers in 2018 and currently has over 30 members. Since December 2020, the Association has received support from the USAID Agricultural Program in Georgia.

Сообщение The Association of Almond and Walnut Growers summed up the 2021 harvest in Georgia появились сначала на EastFruit.

According to EastFruit analysts, Armenia has recently joined the group of large regional exporters of fresh apples.

Following Georgia, which has turned from a large net importer of apples into an exporter, Armenia exported more than 2.7 thousand tons in 2020, sharply increasing supplies. It is likely to renew its apple exports record again in 2021, since it has already exported almost as many apples in the first 7 months of the year as in the whole 2020. Moreover, if we compare apple exports from Armenia in January-July 2021 with the same period in 2020, the volume of supplies increased by 4.7 times.

However, it is not as obvious as it seems. It is possible that not all of the apples exported were grown in Armenia. If we pay attention to the volume of apple imports, the sharp increase in apple imports to the country from Iran is striking, and the growth rate of imports is comparable to the growth rate of exports.

Read also: Greenco from Armenia offers apples, cherries and apricots of an unique mountain taste

Nevertheless, as local participants in the fruit and vegetable market report, apple production has indeed been growing in Armenia in recent years. Moreover, quite large modern apple orchards were established in several regions at once, which gradually come into full fruiting. Accordingly, the supply of apples on the domestic market is growing, and the volumes required for exports are emerging. Local growers still lack modern facilities for storing, sorting and packing apples, although these investments are already being discussed.

This once again confirms the deep crisis of the global fresh apple market we covered in the article #freshapplecrisis. It is extremely important for growers to combine marketing efforts and improve the quality now, as Ukrainian farmers did with the support of the Ukrainian Horticultural Association.

Сообщение Armenia is increasing the production and exports of fresh apples появились сначала на EastFruit.

Open field red tomato prices have doubled this week in Georgia. The average wholesale price on August 5 was 1.6 GEL ($0.52) compared to 0.8 GEL ($0.26) one week earlier. What has affected the market?

Tomato grower from Shida Kartli have talked about expected high prices with EastFruit yet at the beginning of July.

Source: EastFruit

According to EastFrut monitoring results, open field red tomato prices at the beginning of August, during the last three years, were higher than at the end of the month. This happens because the tomato supply at this period generally is low. In August, tomato harvest ends in Kvemo Kartli and Kakheti regions and the Shida Kartli region becomes the main growers of open field red tomatoes. The season in Shida Kartli has just started, but supply is yet low.

Growers expect that after the tomato season reaches its peak, at the end of August, prices will fall again, but still will be higher than the previous year because fewer tomatoes were planted this year.

Ioseb Parekhelashvili is one of the tomato grower from Shida Kartli. This year he has only a pink variety of tomatoes on 2.2 ha. In 2020 he had 10 ha of red tomatoes, but farmgate prices were very low and the year ended with losses. After failing last year, he decided not to plant red tomatoes at all this year.

Another grower from the Shida Kartli region, Levan Guraspashvili, also planted fewer tomatoes this year. In an earlier conversation with EastFruit, he talked about possible high prices for the same reason. He started selling tomatoes several days ago and is paid 1.3 GEL per kg ($0.42)  in the field. He also expects that prices will go down at the end of August, but not as much as it was last year.

Another reason that was mentioned by the farmers and that might adversely affect tomato harvest this year is the low temperatureat th e beginning of May.

Сообщение Open field red tomato prices have doubled this week in Georgia появились сначала на EastFruit.