Wheat production decreased in Georgia

The sown area of wheat in Georgia in 2023 amounted to 56.7 thousand hectares, and the average yield was 2.6 tons per hectare

Wheat production in Georgia decreased by 6.5% in 2023, the National Statistics Service “Sakstat” reports. According to the agency, Georgia produced 146.6 thousand tons of wheat last year.

Wheat production in Georgia in 2019-2023

The planted area of wheat in Georgia in 2023 was 56.7 thousand hectares, and the average yield was 2.6 tons per hectare. Georgia consumes 700-800 thousand tons of wheat during the year. In recent years, the country has been buying wheat from Kazakhstan, Ukraine, the United States and Russia, with the latter accounting for 70%, as the price was the most favorable.

Difficult times

With the increase in the export duty on wheat from Russia and the resulting increase in imports of flour, on which no export duty was levied, all mills in Georgia suspended production in the first quarter of 2023, as they did in 2021. As a result, barns were overflowing with wheat and farmers simply had nowhere to put their harvest. Difficult times for Georgian flour millers came in the summer of 2021 after Russia introduced a floating duty on grain exports. Therefore, Georgia increased flour imports from Russia several times, respectively, reducing wheat imports by more than 30% in 2022. As a result, almost all the country’s mills stopped working.

Mills started importing wheat again and increased production only by the end of 2022, when the floating export duty rate on wheat decreased.

The mills faced a second production crisis in March 2023 due to the increase in flour imports and the increase in the export duty on wheat from Russia.

Therefore, as a result of consultations of the Government of Georgia with millers, Georgian wheat producers and bread producers, a temporary tax on flour imports was introduced from June 12, 2023. The purpose of the tax was to restore equal tax regimes for flour and wheat on the Georgian market, thus ensuring the operation of the flour milling industry.

At first, the duty was introduced until November 1, 2023. Then imports of more than 200 kilograms of wheat flour were taxed at the rate of GEL 0.2 per kilogram. In October, the term was extended until March 1, 2024, and the duty was increased by 25%, i.e. to GEL 0.25 per kilogram.

The introduction of the temporary duty helped to restore conditions of equal competition between flour imports and wheat imports. As a result, the mills resumed operations.

Tags: wheat, Georgia