Don't panic over Bread

Georgian Agriculture Minister, Bakur Kvezereli, has predicted a “probable change” of bread prices from September. However, speaking to journalists on August 25 about increasing the prices of bread by 10 tetri in Georgia, Kvezereli noted that “there are no grounds for panic.”

“The increase of prices is caused, on the one hand, by the general deficit in the world market, and on the other by the increase in the price of wheat. This will of course be reflected on everything connected with this product including bread,” the Agriculture Minister noted. “However the main thing is that we have enough supplies. There will be no deficit and so there is no grounds for panic,” he added.

According to Kvezereli, the price of bread will remain “stable” until the end of August, however the situation “might change” from September. “Obviously local prices depend on the prices in the world market. We are an importer of this product [wheat]. About 85 percent of wheat consumed in Georgia is imported from abroad, so the government is unable to influence this [bread prices]. All we are able to say is that this is a situation created by market conditions,” the Agriculture Minister commented.

Georgian Prime Minister, Nika Gilauri said that the increase in the price of wheat on the world market is caused by the “bad harvest.” “The harvest was poor not only in the Caucasus region, but in such supplier states as Kazakhstan, Ukraine and Russia. The amount of harvested wheat in these states has decreased by 25 percent, which has caused prices to rise,” the PM said, adding that the situation has deteriorated more as “certain states” have stopped wheat exports. Gilauri stressed the need to find new sources for importing wheat into Georgia.

The rise in the price of bread has also become a concern for the Tbilisi Mayor. Visiting a bakery in Tbilisi on Wednesday, Gigi Ugulava said that the government “will do its best” to keep bread prices at their current level. “The bread price rises are especially painful for pensioners and for families with a low income. So our main task is to keep prices at their current level for the autumn,” Tbilisi Mayor stated.

According to official data, Georgia consumes 800 thousand tonnes of wheat annually. 15 percent of this amount is produced in Georgia. 95 percent of imported wheat is from Russia. The rest comes from Kazakhstan and Ukraine. As a result of the poor wheat harvest, the Russian government announced a ban on wheat exports from the country effective August 15 until the end of this year.

Some Georgian analysts suggest that “it seems” the government has no specific plans of tackling the situation. Analyst Gia Khukhashvili told The Messenger that the authorities have so far refrained from speaking about any concrete steps they are going to make to regulate bread prices on the Georgian market. “However instead of trying to regulate prices, it would be better if the authorities supported developing the government-pressure-free business in Georgia, creating more jobs and an environment where prices are in accordance with wages,” Khukhashvili noted.