Georgia's wheat problems

Wheat prices have risen dramatically in 2010, the main reason being a poor yield. The increase was also influenced by the statement of Russian Prime Minister Putin on August 4, in which he announced a ban on wheat exports from Russia because of domestic production problems. This year Russia will produce around 75 million tonnes of wheat; in 2009 it produced 97 million tonnes and in 2008 more than 108 million tonnes. Major consumers of Russian wheat are Egypt, Turkey, Syria, Libya and Israel. Analysts believe the USA and France will substitute Russia in the wheat market. Obviously there will also be changes in Georgia. According to the statistics department Georgia consumes approximately 800 000 tonnes wheat annually, only 15% of which is produced locally, the rest being imported from Russia, Kazakhstan and Ukraine. However 85% of imported wheat comes from Russia. The Russian ban on wheat exports has already forced Georgian wheat importers to look for other sources as well to stimulate local production. The latter is very difficult this year as the wheat crop will be poor as a result of poor weather conditions. Analysts estimate that this year Georgia will only produce 40-45 000 tonnes; last year it produced 80 000 tonnes, and in 2008 – 115 000 tonnes.