Georgian economist talks country's potential for wheat production increase

Georgia Materials 22 April 2022 13:11
Georgian economist talks country's potential for wheat production increase

Georgia already has many state programs and other initiatives to help farmers increase wheat production, Head of the Center for Analysis and Forecasting of Tbilisi State University, economist Vakhtang Charaia, told Trend.

Meanwhile, Minister of Environmental Protection and Agriculture of Georgia Otar Shamugia, speaking at the parliament, said that Georgia intends to reduce its dependence on wheat imports from 50 to 18 percent and increase local production.

However, Charaia noted that it is difficult to talk about full import substitution in the upcoming years. He said Georgia produces wheat, but in small quantities - 10-15 percent of all consumption. At the same time, 94 percent of wheat imports account for the Russian market, since the cost of the transportation from this country is much cheaper than from other markets.

“For example, when the cost of wheat itself is about $200 per ton, transportation from Kazakhstan costs about $80, and from Ukraine - about $90, while the cost of transportation from Russia is about $30-35 per ton,” Charaia said.

He noted that today the cost of wheat has increased to about $400, but the cost of transportation from Russia and Kazakhstan has remained about the same. Therefore, today, in the light of the conflict between Russia and Ukraine, Georgia may well replace Russian wheat with Kazakh wheat, since it is less problematic, and the cost is about the same.

Regarding the increase in wheat production in the country, the economist noted that wheat is a strategic product, and it is extremely important to strive to the production increase.

“If Georgia is able to provide itself with wheat and flour by at least 50 percent, it will significantly increase the country's independence not only from imports of this product, but also from international fluctuations in general, from the impact of other countries on Georgia,” Charaia added.


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