After the abolition of privileges for importers, grain growers have already carried out first purchases. However, purchases are not finished yet and it’s unclear how the abolition of privileges will affect the final outcome. Companies with annual turnover of more than GEL 200 thousand were able to postpone the VAT payment. However, from June 1 incentives for import have been canceled. Chairman of Grain Growers Association Levan Silagava says it is still unknown whether the government is going to make an exception for grain.
He notes that the relevant authorities are aware of the case, but no concrete decision has been taken. In Silagava’s words, the price of wheat is stable in the current season and one ton of raw material costs USD 280, while the Georgian wheat price amounts to USD 500 – 550, however, if prices start to rise, they will have to purchase raw material at a high price and this change will create problems. Grain Growers Association stated before the enactment of the amendments that VAT preferential treatment had allowed to import grain at lower prices and create reserves that allowed not raising prices in crisis situations.
“Now, after the adoption of this law grain reserves will be 18-20% less, and accordingly, it will be harder to keep prices in difficult times. Georgia is 90% dependent on imported grain and if the decision is not revised, the country will face problems with grain reserves,”- Chairman of the Association said.