AGRIndex: Must-Read for Potato Eaters

AGRIndex: Must-Read for Potato Eaters

AGRIndex: Must-Read for Potato Eaters

The FINANCIAL -- Georgia recently introduced a three-month period temporary ban on potato imports from Turkey, with the goal of avoiding the dangers of spreading potato cancer in the country during the seeding period. So, how might this affect potato prices on the Georgian market?

Although Georgia produces close to a self-sufficient amount of potatoes, the country still trades actively, and the main importer of potato in Georgia in recent years has been Turkey, which accounted for more than 80% of total potato imports in 2017 (in value).

Last November, according to the AGRIndex, potato prices were up by as much as 39% in y/y terms, while the corresponding figure declined to 23% in February 2018. It is also interesting that, according to the AGRIndex, after a six-month period of positive m/m changes in prices, domestically-produced potatoes became cheaper (-2%) in February 2018. This decline in prices might stimulate Georgian consumers to buy Georgian potatoes, especially at the beginning of spring season when the price competition with an imported substitute is tight.

Considering everything discussed above, potato prices may increase before the new harvest hits the local market. The level of price increase will turn on how fast importers find an alternative country to import potatoes from, and this usually takes time. Thus, we might see an increase in potato prices on the local market in coming months. On the one hand, this will benefit Georgian potato producers/sellers, while on the other hand, it will cost Georgian consumers.