Prices have jumped from 8.00 Georgian Lari/GEL (US$3.23) per kg liveweight in September 2016 to GEL15.00 (US$6.07) per kg liveweight in March 2017, according to data from the country’s statistical agencies.
Mikhail Chichagua, director of lamb manufacturer The Farm of the Future, said the reason for this trend was the boom in exports, especially to Middle East countries, including Iran and Iraq. He said that, in September 2016, when prices started rising, Iran had opened up its market to imports of lamb and sheep from Georgia and, since then, the country had exported at least 200,000 head of sheep in the form of meat and live animals.
Chichagua said that selling prices on export markets were more attractive than the prices achieved for lamb in Georgia, so the domestic market had started to experience shortages. He said the price per single sheep in the country now was GEL180-GEL200 (US$73-US$81) and this was nearly two times the level seen in March 2016. Meanwhile, lamb producers have said it is important that the current price rates are maintained.
Iran ‘turned industry upside down’
According to Vano Karashidze, a spokesperson for the country’s Ministry of Agriculture, Georgia has been working for quite some time to open up the Iranian market for its lamb. He said that unrestricted imports were allowed last year, with the result that the total volume of Georgian lamb exports in the past six months exceeded the volume of exports over the previous five years.
Karashidze believes opening the Iranian market has “turned the industry upside down”; previously lamb suppliers were fighting for every penny and had rather low margins. But the industry could boost its production performance at least twofold within the coming couple of years and profitability was booming along with exports, he added.
According to Chichagua, previously Georgia only reared 550,000 head of sheep annually, but in 2017 this figure should reach 800,000 head. In his opinion, this would be enough to maintain the rate of export supplies seen in recent months and could also eliminate shortages in the domestic market. He claimed that, at the moment, most countries in Central Asia had a shortage of lamb and this opened up good prospects for further growth in export volumes.
According to information from Georgia’s National Service for Food Safety, the main reason for the strong growth in exports was the stable veterinary situation in the country. The regulatory body explained that, over the past few years, Georgia has vaccinated most sheep and, as a result, has significantly improved the country’s status as a reliable supplier, with virtually no disease epidemics.