Analysis of the reasons and price outlook

Vegetable prices in Georgia declined by 6%

EastFruit analysts review the latest retail price dynamics in Georgia. According to official statistics, retail prices for vegetables in Georgia went down by 6% in April 2023 compared to March 2023. A further reduction is expected in May.

Data source: GeoStat

Vegetable prices follow a more general trend. The average price for all goods and services, not just food or vegetables, reduced by 1% month-over-month. Retail price for the food group was reduced by 2%. Such dynamics are of a seasonal nature – price levels tend to reduce every year at this time of the year.

Specifically for vegetables, the mentioned price reduction is associated with the increased supply on the market. Part of this increase comes from the local producers, mostly tomato and cucumber producers, who produce in high tunnels. Imports from the neighboring countries also play a significant role in boosting supply in the Georgian market. These products also come from high tunnels and greenhouses. Their costs of production around April are, of course, lower than the costs in winter. Hence, there is a downward pressure on the prices.

Generally, March, April, and May are the most active months for Georgia’s fruit and vegetable imports. Local supply is weak, and there is a large window of opportunity.

Some major factors also affected the Georgian market. According to the monthly review of the National Bank of Georgia, prices for goods and international transportation costs have been reduced globally. As Georgia depends on imports a lot, these two factors surely played a role in the reduction of prices in general and the reduction of vegetable prices specifically.

The strengthening of Georgia’s currency is also important. Holding all else equal, when local currency gains value, it can afford more imported products with the same amount – imports become cheaper. The value of the US Dollar against the Georgian Lari reduced by 3% in April 2023 compared to March 2023.

Seasonal price reduction is not a one-month event. Supply from both local and foreign producers usually increases further in May. Also, open-field produce slowly starts to enter the market.

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