23 June 2023
Many differentials for potato market this year in this transcontinental country.
MAY is a transitionary period for the potato market in Georgia, the former Soviet country which lies at the intersection of Europe and Asia, when the market switches from last year’s potatoes to newly harvested ones. It also usually heralds a price increase.
But this year, analysts at EastFruit, an information and analytics platform centreing on the vegetable, fruit, berry and nut markets of East Europe and Central Asia, say a price rise is unlikely.
Harvest usually takes place in September-October in the Samtskhe-Javakheti region of the country and, while awaiting the new harvest, supply can begin to dwindle, prompting price hikes. But while 2022's harvest in the region wasn't a good one, this year prices have remained stable.
The average price for the last year’s potatoes on the Georgian wholesale market has been fixed at about $0.67/kg and is showing no signs of growth.
The reasons for this are two-fold: Prices are already very high, and potato imports are very strong.
Following the poor harvest in the Samtskhe-Javakheti region in 2022, potato prices increased in October. The average price has been stable but at a record-high level since then. Raising prices even higher is very likely to be problematic.
Georgian consumers are already paying a very high. The average wholesale price in Georgia remains the largest within the EastFruit project.
The price difference has opened up opportunities for importers who have used these opportunities. Between October and April, the country has imported slightly more than 27,000 tons of potatoes. This is the second-largest import volume for the period since 2015.
The average import volume of the previous nine seasons for October-April stands at much lower 12 thousand tons. Importing large volumes of potatoes has been keeping prices in Georgia at high, but stable levels. Without importing, potatoes would have become much more expensive, especially in the transitionary period.
There are several reasons for potato prices dropping in Georgia. Potatoes from the new Georgian harvest have now started to enter the market, so with more potatoes available, prices are more competitive. But neighbouring countries are also still able to export to Georgia, reducing the possibility of price increases.
The main exporters are currently Russia and Belarus, but Turkey could also 'make a comeback' according to EastFruit. Previously the country's main importer, Turkey has more recently limited exports to fight inflation. Inflation in Turkey is still high but its early harvest volumes are believed to be large so there may be incentives to export.