In the middle of December, food prices maintained an upward trend, as ISET’s Retail Food Price Index increased by 2.2%, compared to the mid-November 2017. It turns out that the holidays will cost more in 2017, compared to December 2016, as we recorded a significant 10.9% y/y increase in food prices. According to data from the first two weeks of December, prices increased the most for eggplant (105%), cucumbers (43%), and onions (20%). However, not all food items became more expensive. The largest price drops were observed for carrots (14%), eggs (5%), and potatoes (3%).
MORE ON BEEF PRICE HIKE
From an annual perspective, beef prices were particularly notable. Beginning in September 2017, beef has been trading above last year’s prices. In December, the average price of 1 kg of beef is 13.10 GEL; that is 17% higher compared to the previous year (11.17 GEL/KG).
High beef prices might be caused by the increased export of live bovine animals. During January-October 2017, Georgia’s exports in this category increased by 8%, compared to the same period in the previous year. Therefore, the value of Georgia’s exports in this category has also increased. During January-October 2017, the export value of live bovine animals accounted for 32,404.5 thousand USD; that is 6% higher than the same indicator for the previous year (unfortunately, export figures for November – December 2017 are not yet available). The increased export of live animals reduced the supply of meat to the local market, causing prices for beef to rise. While increased exports is good news for beef producers, Georgian consumers might not be very happy, since once beef is scarcer, it might become even more expensive in the near future. However, in the long run, if the new producers emerge in the market, supply will increase and meat prices are likely to return to their previous levels.
Food Price Index Recent Publications
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JUNE 2021 | AGRI REVIEW
On 15 June 2021, the National Statistics Office of Georgia published its annual publication for the agricultural sector - Agriculture of Georgia 2020. According to the publication, agriculture, forestry, and fishing comprised 8.4% of GDP in 2020, higher than the 7.2% share in 2019, but in line with the general trend over the last five years (agricultural GDP comprising on average 7-8% of GDP). Agricultural GDP in nominal terms increased by 13% on an annual basis.… Read More
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MARCH 2021 | AGRI REVIEW
On 29 December 2020, the parliament of Georgia approved the state budget for 2021, which includes allocations of around 18.3 billion GEL. From which the Ministry of Environmental Protection and Agriculture (MEPA) will receive 451.6 million (2.5% of the total budget allocation). MEPA will direct 10 mln. GEL towards the Environmental Protection and Agriculture Development Program (2.2% of MEPA’s total budget), with around 389.6 mln. (86.3% of MEPA’s total budget) to be allocated to agricultural… Read More
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DECEMBER 2020 | AGRI REVIEW
The COVID-19 pandemic raised concerns about the food security of many countries, in particular import-dependent developing countries like Georgia. Trade restrictions imposed by Georgia’s trade partners tightened the supply of some cereals and vegetables, signalling the risk of an increase in food prices. While there is no formal evidence of food insecurity due to the pandemic, given that Georgia is a net importer of wheat the state subsidized wheat imports, and, according to Georgia’s Wheat… Read More
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OCTOBER 2020 | AGRI REVIEW
The National Statistics Office of Georgia (GeoStat) recently published its economic review for Quarter II 2020. The publication highlights that agricultural production increased by 4.7% in the second quarter of the year compared to the same period in 2019. Furthermore, agriculture contributed to 10.2% of the country’s total GDP during the same period. In the second quarter of 2020, Foreign Direct Investments (FDI) in agriculture also increased and were almost six times higher than the… Read More
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JUNE 2020 | AGRI REVIEW
On 15 June 2020, the National Statistics Office of Georgia published its annual publication for the agricultural sector - Agriculture of Georgia 2019. The publication shows that agriculture, forestry, and fishing comprised 7.2% of the nominal GDP in 2019, slightly lower than the 7.8% share in 2018, but in line with the general trend over the last five years (on average 7-8% of GDP). In nominal terms, the output of agriculture increased by 4% in 2019… Read More
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DECEMBER 2019 | AGRI REVIEW
On December 10, the parliament of Georgia approved the state budget for 2020. The budget includes allocations of around 14.4 billion GEL. Out of which, the Ministry of Environmental Protection and Agriculture (MEPA) will receive 353 mln. GEL (2.4% of the total budget allocation). MEPA will direct approximately 293 mln. GEL (2.0% of the total budget allocation) towards agricultural development and 60 mln. GEL (0.4%) will be spent on environmental protection. Compared to 2019, the… Read More
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OCTOBER 2019 | AGRI REVIEW
On 30 August 2019, a public hearing to discuss Georgia’s Rural and Agricultural Development Strategy for 2021-2027 was conducted at the Ministry of Environmental Protection and Agriculture (MEPA). The new strategy document represents a roadmap for Georgia’s rural and agricultural development for the next decade. The strategy outlines three major goals to be achieved by 2027: 1. Increasing the competitiveness of agricultural and non-agricultural sectors; 2. Sustainable management of natural resources, preservation of ecosystems, and… Read More
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