Analysts at EastFruit claim that Georgia is now experiencing a severe shortage of both local onions and potatoes, which has led to a high need for imports to meet local requirements. The Kvemo-Kartli region, which generates 20–30% of the nation’s yearly potato output, is projected to hold the next significant potato harvest in June. Yet due to higher pricing and better yields last year, several farmers in the area apparently decided to plant onions instead of potatoes this year.
Georgia has already imported 11,000 tonnes of potatoes since January 2023, and it was estimated that the country would need to import at least 12,000 tonnes of potatoes from February until the start of the new season. The deficit of potatoes has resulted in huge volumes of imports, with more than 24,000 tonnes of potatoes imported since September 2022, the highest volume in at least ten years. The shortage of onions is more of a global issue than a local one, with Georgia importing 14,000 tonnes since September 2022, quite close to the ten-year average of 13,000 tonnes.
As a result of the deficits, wholesale prices for potatoes and onions have been significantly higher this time than in previous seasons. Although onion prices have dropped since mid-February, this is a result of reduced quality and caliber of the imported onions. Retail prices have skyrocketed, with Georgian consumers paying 111% more for a kilogram of onions in March 2023 compared to March 2022, and the retail price for potatoes has gone up by 50%.
While quantitative estimates of the plantings are unavailable, farmers’ shift to onions is expected to result in a significant increase in potato imports in the new season. There will also be significant negative pressure on onion prices as the onion supply increases. Interestingly, Georgian importers find it challenging to replace Turkey, which is a major onion supplier restricting exports to stabilize prices in its own market.
Finally, the lack of locally produced potatoes and onions in Georgia has led to an increase in imports and higher consumer prices. Onion prices and potato imports for the upcoming season are both anticipated to be significantly impacted by farmers’ switch from potatoes to onions. How the market will adjust to these modifications and how consumers and other stakeholders will react to changing costs and supply chains are still to be seen.
Source: https://east-fruit.com, Photo by Skyler Ewing: https://www.pexels.com/photo/onions-in-steel-buckets-10904921/
11 April 2023
