Georgian hazelnut market: assessment, perspectives

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Ivane Javakhishvili Tbilisi State University Press
n the article, the hazelnut world and local market are complexly evaluated. Specifically, the possibilities of hazelnut production in Georgia and the potential of its export and import are discussed, and the Georgian hazelnut place in the international market, its development trends and future prospects are highlighted. About 35 countries provide hazelnut in the world market, including Georgia, which has high potential for development of the industry and its own niche on the market. Georgian hazelnuts are distinguished with qualitative, quantitative characteristics, diversity of local varieties. The extension area of hazelnut is mainly in western Georgia (more than 70% of production). Based on the data of 2017, Georgia occupies the ninth position in the world (12.806 ha) according to the hazelnut harvested area and the fourth position – according to the volume of production (21.4 thousand tons). For the last two years, it is noticeable the decreasing trend in the area harvested as well as in the level of productivity, which is mainly due to the spread of pests and diseases in the hazelnut field. In relation to the data of 2016 year, the production has been reduced by about 27% and in relation to the data of 2013 it has been reduced by 46%. According to the data of 2016, the share of hazelnut was 8.5% between the ten biggest export products in Georgia, what is more, it exceeded the wine export in that year. In 2017 the above-mentioned indicator was 3%. Georgia is among the five largest producers of hazelnut and together with Turkey, is a large supplier of hazelnut. Georgia’s share according to the average indicator of the last 5 years in global export is 12%. The export of hazelnut is mainly carried out in EU countries, mainly based on Germany’s (21.5%) and Italian (20.2%) consumption tendencies. Also important markets are CIS and Asia. The freight transportation from Turkey, Georgia and Azerbaijan were more than 50% for Germany and Italy. Spain and Italy are also the largest net importers in the world market. Turkey is the main importer partner with the share of 82% and Germany is the main exporter partner with the share of 50%. The analysis revealed that Georgia should increase partnerships with these countries in order to increase the export of hazelnut. Hazelnut is a competitive and highly exportable product. 90% of the hazelnut produced by Georgia is exported, and the local consumption of the country is 10%. Hence, the hazelnut production in Georgia is entirely focused on foreign markets and their current tendencies. Market research has shown certain trends, in particular, three market stakeholders are revealed: Distribution companies, hazelnut processing factories and farmers. As a result of the survey, it was revealed that the share of large scale farmers in 2008 increased by 3% in 2017 and exceeds the 10%, however, the share of small farmers is still high. In the hazelnut value chain scheme, about <70% of European, <30% Asian and <1% comes on other hazelnut consumers. Due to the scattering of the householders and small farms, there have been appeared lots of small distribution companies (resellers) in the hazelnut market. As the survey shows, most of the hazelnut processing companies do not own their own plantations. They are mainly concentrated in Samegrelo region, using 80% of their capacity and provide a significant number of jobs. Despite some positive trends, the hazelnut quality (due to the widespread illness) has deteriorated; the steep fluctuation of the hazelnut price has been revealed. In the current situation, in order to prevent the expected losses and improve the quality of the product the state support for the sector and the implementation of the effective programs are very important.
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Hazelnut Market; Export; Import; Value Chain; Production Potential.
Economics and Business, №1, 2019, pp. 84-97