In 2021, Georgia exported $5 081 000 worth of blueberries to Russia. The 2022 season will start in June, but growers are in a limbo today. The consequences of the war with Ukraine are likely to affect the Russian economy in the coming months. The only way to save this season is to export to the EU and other developed markets, but is it realistic? Georgia became a producer of blueberries quite recently, but 90% of all export earnings from the sale of blueberries come from the Russian Federation.
The EastFruit team contacted several blueberry growers in Georgia to find out what their plans are for the season.
Although growers cannot make an accurate forecast, today’s view of the future looks hopeless. Growers are worried that Russian consumers will become poorer due to sanctions, and demand for blueberries will fall, since they are not an essential product.
An alternative to the Russian market is the EU and Gulf countries, but it seems that the industry, with the exception of a few large growers, is not ready to export to these markets without previous experience. Only a few growers are ready to export to the EU this season.
Why haven’t Georgian blueberry producers diversified their export markets so far?
Growers cited several reasons: logistics difficulties, unfavorable payment terms, uncertified production, as well as the ability of local laboratories to check the safety of products.
Logistics
Georgia does not have cargo planes for export to the Gulf countries, although a small volume of blueberries has been exported to Qatar only by passenger airlines in recent seasons. Another hurdle is that since it is not a cargo plane, it does not have the proper facilities, such as temperature control, to carry perishable goods.
Export to the EU countries is carried out by land transport, which is not difficult to organize. The issue is time. If a perishable cargo from Georgia reaches Russia in 3-4 days, then, for example, it needs 9-10 days to reach Germany. Transport time is critical for perishable goods, as more time spent on the road means lower quality and loss for the seller.
Terms of payment
As the growers explained, there are different payment terms in the Russian and European markets. Payment in Russia was made on the spot, while European traders only pay after the sale of goods, which delays payment by weeks, reducing cash flow and increasing risks for sellers. When exporting to EU markets, grower also take on the risks of transportation and defective products, since they will be paid only for commodity volumes.
Certification and laboratory research
Growers without certificates such as GlobalG.A.P. will not be able to export to the EU as this is the first requirement from European customers. Unfortunately, only a few large growers are certified by GlobalG.A.P. in Georgia, while most of the small producers initially set up their business to export to the Russian market, where certification is not required.
In addition to certification, blueberries must be tested for product safety in order to enter developed markets. According to producers, laboratories in Georgia cannot do all the necessary tests.
FCO is one of the few producers that received GlobalG.A.P. certification in 2020. According to FCO spokesman Rati Morchiladze, although it seems that this season will be difficult for most growers, their company plans to sell in Western Europe, as they have already done this last season.
“Last season we exported a small volume of blueberries to Germany. We only managed to export once at the end of the season due to the difficulties we faced. One of the factors that delayed the process was that we had to send samples to Turkey in order to pass all the requested tests. But now we know what needs to be done and how to do it in a short time. This season it should be easier for us to export to Germany. We even found a way to shorten the transportation time. With two drivers driving a truck in turn, it is possible to get to Germany in 5-6 days,” said Morchiladze.
Those who are not yet ready to export to the EU are still hoping that the Russian market will not be completely closed, but they are also considering the worst-case scenario, realizing the need to diversify markets in the future.
08/03/2022
