Meat Products Business Sector Explains Reasons of Market Deficit and Surge in Prices.
After the New Year period, beef price has risen by 2-3 GEL, mutton price has increased by 1.5-2 GEL. It turned out that prices have increased because of meat deficit on domestic market. And this deficit was caused by several factors, including, livestock is exported to neighborhood countries and regions from Georgia. Secondly, beef of domestic production is supplied to Georgian armed forces.
According to report by National Food Service, livestock is exported from Georgia to Azerbaijan, Egypt, Iraq, Saudi Arabia and Syria.
It should be noted that livestock had not been exported from Georgia for many years. According to Geostat, national statistics service of Georgia, the exports started in 2008 and since then the exports is growing. In 2008 Georgia exported 584.4 thousand USD livestock, while the figure rose to 36 841.6 thousand USD in 2016. The figure marked 20 103.4 thousand USD in 2015.
One more problem consists in production slowdown. According to Geostat, in 2016, as compared to 2015, meat production fell by 9.6 thousand tons. In 2015 meat production marked 62.1 thousand tons, while the figure rose to 52.5 thousand tons in 2016.
Representatives of slaughterhouses and meat product stores assert that, because of deficit, beef prices rose by 2-3 GEL over the past several months. The deficit arose because of mass exports of livestock from Georgia.
Increased exports has inspired beef deficit, representatives of slaughterhouses assert.
“Over the past period the beef price rose by about 3 GEL because of deficit and the deficit was preconditioned by exports of livestock to Arab countries and Azerbaijan”, Ibermeat Representatives noted.
LLC Matador Slaughterhouse
“There is sharpest deficit of beef, number of cattle has also decreased because of mass outflow of livestock. They pay much money and buy cattle at high prices. Therefore, our citizens prefer to sell cattle to them. Livestock is mainly exported to Arab countries”, LLC Matador director Ioseb Kokhtashvili said.
LLC Gudelis also talks about high demand for beef and a small supply of livestock. The company director Levan Khalughelashvili noted that there is livestock deficit in the country. Citizens complain that they meet difficulties to buy beef and increased exports is the main reason, he said.
It should be noted that various research reports also prove that beef prices have increased. In January 2017 retail prices of products rose. According to Tbilisi Economics International School ISET, starting mid December prices rose by 10.1%. According to the report authors, pork prices saw the highest surge. The hike constituted 35%.
Meat Product Manufacturers
Vake Meat Products
Meat product manufacturers talk about heavy market realities because of deficit of meat products. Vake Meat Products director general Levan Chkhaidze said that there is sharp beef deficit in the country and this product may rise in price again. It is untimely to say whether small companies will close or not, but the situation should be regulated. Chkhaidze explained that at this stage Vake Meat Products does not plan to increase prices, but if the current tendencies are not improved, surge in prices are not ruled out. I hope this problem is of temporary character and it will be settled in the near future. As to prices, growth in prices does not depend on only this factor and all companies are trying to maintain current tariffs», Chkhaidze said.
Director of one of the meat products manufacturing companies says that there is quite difficult situation in meat products business. A huge number of livestock was exported abroad. The problem deepened after domestic meat products were directed to Georgian armed forces.
This business will have to move to consumption of frozen meat, the company head noted.