Is There a Shortage of Sugar, Oil, and Bread in Georgia? What is Happening in the Georgian Market Against the Backdrop of the Russo-Ukrainian War

“There will be no shortage of goods in Georgia, but price increases are inevitable,” said Iva Chkonia, president of the Business Distributors Association, to Business Press News. She specifically noted that it can be said with certainty that the market is primarily suffering from panic buying.

Chkonia emphasized that if any restrictions are imposed by Russia or Ukraine, or if the war drags on, it may be possible to shift to other markets.

The Sugar Market

Sugar has simply disappeared from Georgia's trade centers and has sharply increased in price after people began making panic purchases of essential goods against the backdrop of the Russo-Ukrainian war. However, it is noteworthy that Georgia imports sugar raw materials from Brazil. Brazil was also the leader in the import of finished sugar products in 2021. In other words, the country does not import from Ukraine or Russia, so the war cannot cause a shortage of this commodity.

The problem lies in the fact that the sugar factory in Georgia, which produces 400-500 tons daily, has been undergoing planned renovations since March. The factory is expected to resume operations in April. The issues in the market have arisen due to panic buying among the population.

“There are minor issues in the supply chain, also due to logistical problems. Panic buying is taking place in the country, but there is no reason to panic; we have stockpiles of goods and are importing from Azerbaijan to increase additional supplies until the factory is operational. Raw materials have been ordered for sugar production, a ship is on its way, so I once again urge the population not to incite panic,” the company told Business Press News.

The Sunflower Oil Market

The sunflower oil market is in the worst situation. Georgia mainly imports sunflower oil from Ukraine and Russia. “This may not be reflected in the market today, and we hope the war will end soon, but can you imagine in the long term when Ukraine will be able to produce sunflower oil or sow sunflowers or when factories will be restored overall? Thus, price increases are expected,” said Iva Chkonia, president of the Business Distributors Association.

She emphasized that just as the population did not feel any product shortages during the pandemic, they will not feel any shortages now either. Even during the panic buying that arose during the first wave of Covid, no food product, or any product at all, went into shortage, and it will not happen now either. The market will change, supply will be sourced from other countries. However, it will not be possible to avoid price increases.

The Grain Market

Georgia is currently secure in terms of bread and grain. The country has a two-month supply, but if the war does not end soon, alternative countries for imports include Kazakhstan, where wheat is more expensive than Russia, and in other cases, Argentina, Australia, South America, or North America. There is the potential to import wheat from every country, but the issue lies in the acquisition cost. However, in the upcoming two months, Georgia has sufficient stocks of wheat and wheat flour. This was reported by the first deputy minister of the Environment and Agriculture of Georgia.

The Fuel Market

“Fuel prices (all categories) in Georgia have increased by 20 tetri. The trend of price increases will continue extrapolating to about 4.5 lari,” wrote Georgian economist Oto Abesadze on his Facebook page. Notably, it was discussed that prices would increase by at least 15 tetri at some gas stations starting today.