Wheat price will not return to its previous level

Wheat price will not return to its previous level

access_time2021-06-14 11:49:23

International grain prices will not return to $ 200 per ton, Levan Silagava, head of the Association of Bread Producers, states.

According to Silagava,  outlook for the upcoming wheat  harvest are positive, but the current rise in grain prices is so significant that it makes almost impossible to return to the previous level of $ 200.

Grain harvest begins in Russia in July, in Georgia on 20th of July, and both these factors will ultimately determine the final  prices for flour in the country. In any case, the downward trend in prices will not be significant mainly  due to the increase  in export duty on grain in Russia that affected  wheat prices. The reason for this decision was an almost 3-fold increase in grain exports from Russia,” he says.

In Silagava’s opinion, Russia’s this action  caused a rush in demand for wheat as the businesses began to buy as much grain as possible before the new tariffs come into force. All this has led to a large number of outstanding contracts that boosted even further price hikes.

“Due to increased demand, the grain  supply  is not yet  stabilized to decrease the prices as much as expected,” Leva Silagava notes.


In Georgia  there are certain expectations about the flour prices in Georgia - the lari’s strengthening and government  subsidies on wheat flour will contribute to the stability of flour prices.

 

“In the near future a meeting of the government officials and business will be held at the Ministry of Agriculture that will focus on subsidizing flour, ” he says


Silagava believes that by that time the situation with international prices will be clarified, since wheat harvest will begin in Russia from July 1, and in Georgia from July 20.

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