Crisis in nut business

The nut business has had an unfortunate 2008. It had proved quite successful and profitable in recent times, but the general economic crisis has taken effect here too. Prices have gone down, bank credits have become more difficult to obtain and the nut harvest was damaged by the warfare.

In 2007 the nut harvest was 40 thousand tonnes and made USD 100 million at export. Prices were good, with one kilo costing GEL 6 in 2005 and GEL 4 in 2006. Some agricultural experts suggested that nuts could substitute for tea production in the national economy. Unfortunately, world nut prices have fallen dramatically; this year the price of one kilo of nuts was 1.4 GEL in Guria and 1.7 GEL in Samegrelo. These two were among the leading nut producing regions in Georgia.

The price decrease has been brought about by different factors. Firstly there was a good harvest of nuts in Turkey, which supplies 80 per cent of the world’s consumption. The second factor was that the general world economic crisis made it very difficult for farmers to obtain timely and cheap bank credits. It is also the case that foreign customers do not pay for their nuts in advance, meaning that GEL 80 million is now needed to buy the nuts from the farmers before any money is recovered.

Of the 10 big nut processing enterprises in Georgia only 3 are currently functioning, and those work at 30 per cent of their capacity. The farmers are at a loss. Some of them don’t want to sell their harvest cheaply and would rather keep it for next year, when the prices may have improved, but the harvest is their only source of income. A depression in the nut business also negatively influences the country’s export –import balance.