Harvest of hazelnut in Georgia starts in a week time. The last season has revealed a recovery trend highlighted by the highest production level in recent five years after brown stinkbug invasion – 33 tnd tons. This year growers are hoping for even a better production, however, to achieve success on the global market the quality of nuts should be improved too.

Also: Aflatoxins remain a major problem for Georgian hazelnuts, despite recent improvements

We spoke with Mr. Blai Llort Marti, agronomist and technician, former CEO of FRUSESA, BAIN BORGES International Group, who has already spent more than 10 years in Georgia, sourcing various nuts to the European Union and the US from the region.

On expectations for 2021/22 harvest in Georgia

“With my team of Agro-Origins we have visited Samegrelo a couple of weeks ago to monitor our sourcing partners. Indeed, future harvest looks promising. The quantity of hazelnut in Georgia may increase by 10% and finally reach 2015 year in-shell quantities. However, it is early to assess how much of that quantity is marketable and can be sold for exports.  The last season showed 4-5% of hidden rotten and 3-4% insect bite in kernel of Georgian hazelnut. While European buyers are looking for maximum 2% of hidden rotten and 0.5% of insect bite. For comparison, in hazelnuts from Azerbaijan we have 0.5% of hidden rotten, that’s why traders must pay for Azerbaijan hazelnut 30% more”, – says Mr. Llort.

it takes 20 years to build a reputation and five minutes to ruin it

“I believe in Georgia’s hazelnut industry, as I was successfully exporting Georgian hazelnut to California in 2015-2016 just before the quality crisis caused by the brown marmorated stink bug (BMSB). We have arranged cooperation with Candor AGS, based in California, US, who are suppliers of Costco Wholesales,  aiming to source kernels of Georgian hazelnut for their nut’s mixes for retail consumers. Before we also have made Due Diligence for sourcing pine nuts from Far East, Russia together with Costco and WWF social and ecologic program.  Unfortunately, this opportunity is lost for Georgia, as global business is very sensitive to the continuous quality. As Warren Buffet said, it takes 20 years to build a reputation and five minutes to ruin it”

it is impossible to develop a sustainable project in rural areas, if there are not young people

“It is very unfortunate, that people are leaving rural areas of Samegrelo, where most of Georgian hazelnut is grown. The trend was already visible before pandemics, as population decreased by 3.7% in the region and is more deteriorated due to labor migration to Turkey due to economic crisis caused by COVID19. There women are working in hazelnut and tea plantations. According to my estimations only about 50% of factories are fully operational as there is simply no working hands for hazelnut sorting, as it is still manual process here. Youth is moving to the capital in the search for better life, while we need their energy, dedication, and long-term vision here, in rural Samegrelo. Otherwise, on processing side the sector is well established – HACCP principles are introduced, and National Food Agency regularly monitors factories. I wish growers are more involved in the process, taking responsibility for the quality and control over spraying and following production protocols and not only hoping that Government will take care of everything. It is the seventh season after the BMSB crisis and in terms of quality we still have doubts. Something should be changed.”

Сообщение “The Georgian hazelnut would be in high demand in the US if it wasn’t for the quality” expert says появились сначала на EastFruit.

With the 2020/2021 hazelnut season in full swing in Georgia, farmers have already begun preparations for the new season. EastFruit talked about the current quality of hazelnuts, prices, challenges facing producers, and the potential of the industry with George Todua, the executive director of the Georgian Hazelnut Growers Association (GHGA).

– How do you assess the quality of Georgian hazelnuts this season?

The quality of Georgian hazelnuts is significantly better than last season. This was also reflected in the level of output. If last season this figure was 38-39% on average, then this year it increased to 42%. This became possible thanks to government measures, including the fight against the marble bug and other hazelnut diseases. Also, it was the best care of hazelnut orchards by the farmers themselves, in which we try to help them as much as possible, and the support of donors. The better quality has led to the growth of the authority of the Georgian hazelnuts in the world market and, accordingly, the demand. The official information as of February 9th, Georgia has already exported 15,600 tons of hazelnuts worth $81.2 million this season. These figures, respectively, are 50% and 52% higher than the data one year ago. Exports are still continuing at an active pace. In general, our forecast this season is that the exports of hazelnuts will be at the level of 50,000 – 55,000 tons (in terms of raw nuts). We are confident that the country’s hazelnut industry still has even greater potential. Our Association thinks Georgia will actually increase the volume of annual exports of hazelnuts to 100,000 tons over the next three years. Naturally, this is subject to the efforts of all interested parties, and, first and foremost, the farmers themselves. We set a goal to achieve an average core yield of 45% over the specified period. This means that if hazelnut kernels on the market cost, for example, 20 lari/kg ($6.10/kg), then for 1 kg of unpeeled, nut farmers will receive 9 lari ($2.70) on average.

– What are the current prices for hazelnuts in Georgia?

Prices for unpeeled nuts, depending on the quality and the level of kernel yield, now range from 7-9 lari/kg ($2.10-$2.80/kg). The cost of hazelnut kernels is at the level of 19.5-20 lari ($5.90-$6.10).

– For a number of years, GHGA has been implementing a development program for the Georgian hazelnut industry and knows in detail about its state. What are the main challenges facing producers at the moment, and can we say that the problem of the marble bug is no longer relevant for them?

The marble bug problem has been minimized due to the measures carried out by the state and local farmers for several years, but it has not been removed from the agenda. If we weaken the efforts in the country to combat the marble bug, then soon we may find ourselves in the same deplorable situation as we were in 2016. The Association recently held a meeting at the Ministry of Environment and Agriculture, and we were told that government programs in support of farmers, including the fight against the marble bug, will continue this year. In turn, we will try our best to ensure that farmers do all the proper work in the orchards and in due time, this applies, among other things, to the fight against various pests and diseases. Today, the process of cutting and shaping hazelnuts, as well as fertilization, is underway in the orchards. From the end of March, the chemical treatment of orchards should already begin to protect against marble bugs and other pests.

Read also: Nut business: 2020 market summary for walnuts, almonds, hazelnuts, pistachios and other nuts

– What are the Association’s priorities for this year?

Our main priority this year will be to actively involve in our ranks smallholder farmers – owners of hazelnut orchards with an area of ​​about 0.5 hectares. These farmers make up a significant part of the hazelnut producers in Georgia, but many of whom have little motivation for a better result. The traditional yield indicator in such small orchards is 300-500 kg per 0.5 hectares. Meanwhile, among the members of our Association, there are also such successful farmers who already harvest 1.5 tons of hazelnuts from their 0.5 hectares.

Naturally, we will continue actively having meetings with farmers, having events, and rendering services to the members of the Association. At the moment, GHGA unites more than 25,000 farmers who own more than 30,000 hectares of orchards in almost all regions that are suppliers of Georgian hazelnuts to the market – Samegrelo, Guria, Imereti, and Adjara in Western Georgia and Kakheti in Eastern Georgia. This year we intend to replenish our ranks with 10,000 more farmers to strengthen our presence in Adjara, Guria, and Kakheti. I would like to note that our partner in Kakheti is the Georgian office of the FAO, which helped us open our representative office there.

We will also work to further develop the infrastructure for drying and storing hazelnuts in Georgia, which contributes to the creation of added value. Today, there are six such centres in the country: three in Samegrelo and three in Kakheti. We hope that donor support in this direction will continue. And, of course, we will continue to implement, at the request of producers, projects of hazelnut plantations on a turnkey basis.

***
Since 2013, the Georgian Hazelnut Growers Association strives to increase the knowledge of farmers and to contribute to the improvement of hazelnut quality and the growth of its production. All members of the Association, without exception, participate in the Hazelnut Industry Development Program implemented by GHGA in cooperation with the government and donors. Farmers, united in special groups of 10-12 people with one leader in each of the groups are regularly consulted on tasks such as caring of hazelnut orchards, distributing more than 1,500 highly efficient devices for chemical treatment of orchards at no charge, providing funds on preferential terms plant protection, etc.

The Hazelnut Drying and Storing Centers operating in Georgia were opened with the support of the Georgia Hazelnut Sector Development Project (G-HIP) implemented by the United States Agency for International Development (USAID), Ferrero, Cultivating New Frontiers in Agriculture (CNFA), and the Georgian Hazelnut Growers Association as well as the state.

The total area of ​​hazelnut orchards in Georgia, including new ones, is more than 70,000 hectares. Both local varieties of hazelnuts (mainly Anakliuri and Gavazura) and Italian ones are grown in the country.

Сообщение Georgian hazelnut season 2020/2021 a success, industry challenges remain – GHGA’s George Todua появились сначала на EastFruit.

The EastFruit team in Georgia interviewed leading producers, processors, exporters and importers of fruit and vegetable products as well as solution providers for the industry, officials and experts to identify the most significant events over the past 10 years that have had a decisive impact on its development. Below is a consolidated version of the ranking of the seven most important events for the Georgian business of vegetables, fruits, berries and nuts in chronological order as these events occur.

The first part from this 3 part series can be read here. Below is the second part of the main events in the Georgian fruit and vegetable industry over the past 10 years.

3. In 2015, the brown marmorated stink bug (Halyomorpha halys) spread in Georgia.

The brown marmorated stink bug (in Latin Halyomorpha halys) appeared in Western Georgia in 2015. By 2017, these bugs destroyed a significant part of the hazelnut crop in specialized farms. For this reason, hazelnuts, which had previously occupied a leading position in Georgian exports, fell sharply due to a decrease in the yield and quality of nuts during the 2017/18 season. According to expert estimates, losses in the production of hazelnuts in Georgia amounted to about $50 million a year and even more. Revenue from the export of hazelnuts in the 2018 calendar year was only $46 million, although in 2014 it reached $179 million.

In 2017, a coordination headquarters for pest control was created and a list of specific measures was developed. Complex state measures to combat this pest include four main areas: an active information campaign among the population, monitoring (e.g., establish the distribution area of the stink bug, monitor the life cycle, population dynamics, etc.), measures to control the pest’s population (in particular, chemical treatment of territories), as well as research (e.g., use of bioagents that negatively affect the population of the stink bug, biological plant protection products, etc.). In 2018, Georgia managed to get this pest under control and significantly improve the quality of Georgian hazelnuts, which has already affected the growth of export earnings.

Exports of hazelnuts from Georgia in the period from August to December 2019 in monetary terms amounted to $49.55 million, which is 75.0% more than a year ago ($28.31 million). That is, the first signs of growth in the volume and value of exports have appeared, which in recent years have had a clear downward trend.

In January-July 2020, the export of hazelnuts brought Georgia $19.6 million in export earnings, which is 47% more than a year ago ($8.8 million). According to the results of the first quarter of 2020, hazelnuts ranked 9th in the TOP-10 exports of Georgian products (excluding re-exports) with a share of 2.2%. However, a full recovery of the industry will still require a lot of effort.

4. In 2016, Free Trade Agreement with the EU was signed.

“Georgia has signed an agreement on a deep and comprehensive free trade zone with the EU. Georgia has free trade with Turkey and the CIS countries. The country has a preferential export regime with the US, Canada, and Japan. By the end of 2016, we are waiting for the formalization of a free trade agreement with China,” said the Prime Minister of Georgia Giorgi Kvirikashvili at the end of June 2016. “This means that Georgia will have a network of free trade agreements in the near future that will enable it to reach over 2 billion consumers.”

Georgia signed the association agreement with the EU, which includes the Deep and Comprehensive Free Trade Area (DCFTA), in June 2014. However, the actual exports of agri-food products to the EU remained small. According to the official data of Geostat, in 2018, the EU countries accounted for 15.4% of export earnings from agri-food products ($148 million).

It should also be noted that only a few commodity items are exported – nut crops (mainly hazelnuts), wines and alcohols, and mineral water. Until 2017, more than 70% of the proceeds from Georgian agricultural exports were brought by hazelnuts, which were exported mainly to EU countries like Italy, Germany, and the Czech Republic. However, due to the spread of the stink bug (see point 3 above), the proceeds from the export of hazelnuts decreased by more than 60% and in 2018 amounted to $49.55 million. Even the doubled export of wine, juices, and mineral water could not improve the situation. In 2019, revenue from exports of agri-food products of groups 01-24 to the EU decreased by more than 35% compared to 2015.

One of the promising directions of agricultural exports from Georgia to the EU is berries, particularly blueberries. Despite the favorable climatic conditions and the presence of an “export window” in May-June, few producers export berries to the EU market. The main problem is logistics, the cost of which negatively affects the competitiveness and freshness of Georgian berries when supplied to distant markets. Also, in the context of the pandemic, air traffic was significantly limited, and for the transportation of berries by road, there are still not enough production volumes to optimize transportation costs. Georgian producers are already beginning to express their readiness to cooperate in order to form export consignments of berries.

In addition, as the production of different types of berries develops, deep-frozen berries can become one of the promising directions for export to the European Union. This, by the way, will also increase the income of producers of other fruits such as a non-standard peach, of which there is a lot in Georgia, which can be frozen and sent for export. In fact, most types of berries, fruits and vegetables, and even greens can be frozen and exported.

Another promising direction in export supplies to the EU is nuts. As we have already mentioned, walnut, almond and even pistachio orchards are rapidly expanding in Georgia. The EU is one of the largest markets for these nuts in the world, and the cost of logistics is no longer of fundamental importance here, since the products are expensive. Moreover, they are not classified as perishable.

Watch the video below for industry-specific coverage of these events.

Read also: Top 7 events that influenced Georgia’s produce business over the past 10 years: Part 1 | Part 3

Сообщение Top 7 events that influenced Georgia’s produce business over the past 10 years (Part 2) появились сначала на EastFruit.