Georgia imposes duty on flour imports through November to support farmers

TBILISI. June 13 (Interfax) - Georgia has introduced a temporary duty on imported wheat flour as of June 12, with imports of over 200 kg now subject to a tax of 0.2 lari, or nearly $0.08 at the current exchange rate, per kg, according to a government decree published on the website of the Matsne Legislative Gazette.

There is an exception for products which have received a EUR-1 certificate, which favors imports from the European Union.

The measure was taken to support Georgian farmers who have been unable to sell their crop. There are over 30,000 tonnes in unsold stock, the Agriculture Ministry said.

These farmers did not rush to sell their crops, hoping that wheat prices would eventually rise, the Ministry said. However, they fell instead, and the farmers found themselves in a difficult situation. The temporary duty will be in effect until November 1 of this year, the Ministry said.

The introduction of the new measures is aimed at increasing the competitiveness of domestic wheat, Agriculture Minister Otar Shamugia told reporters.

According to Gruzstat, in Q1 2023, 41,000 tonnes of wheat were purchased, an increase of 22.3% YoY, for almost $13 million, and nearly 43,000 tonnes of flour, an increase of 35%, were purchased for $13.4 million. Over 95% the total volume was shipped from Russia.

Georgia's wheat harvest is sufficient for use in only 15% of the total amount of consumed products containing it. The balance comes from imports. Russia is the main supplier of wheat. Georgia imported more than 184,000 tonnes of wheat from Russia in 2022.

The official exchange rate as of June 13 is 2.6 lari/$1.