Milk prices soar
23 September, 2010
Milk prices soar

Prices for milk products at Georgian market increased by 15% starting this September. The sector pundits say the drought and crop failure jacked prices on natural milk and milk powder up at international market that affected Georgian local market, plus seasonal effect of lactation period coupled with the currency fluctuations and oil price hike.

The first tide of price hike on milk and milk product started in this past August increasing prices by 6% initially

at Georgian market. Price hike at international milk market was named as the key reason caused by crop failure and inauspicious weather conditions this year. Commensurately prices on milk powder increased by 100% from USD 2 thousand per ton of milk powder to USD 4 thousand. As a result price on milk powder stood at GEL 7 per kilo of milk powder in Georgia. All dairies except of Eco-food, one of the leading Georgian dairies that has a network of its own milk collector-units in regions, increased prices. The second tide of price hike was predicted in September due to seasonal effect – the milking volume reduces starting fall usually and companies prepare for extra expenses. Eco-food producing was mainly based on natural milk in summer and did not increase price likewise its competitors. It has sufficient reserves of milk powder and planned not to increase prices in September if the price for milk powder will be maintained at GEL 7 per kilo; however the company could not resist the second tide of price hike and increased prices on its products starting September 20, 2010, Shalva Alavaidze, Marketing Manager of Eco-Food, informed Georgian Journal.


The second tide of price hike poised prices up by another 6%-10%, totally prices on milk and milk product increased by 15%, Kakha Koniashvili, Head of Sakrdze [Georgian Milk], association of Georgian dairies, informed Georgian Journal.  
Since cattle farming is not developed in Georgia and no dairy can procure 1-2 tons of natural milk at once at farms, they fully depend on dry milk that is also fully import-dependent product due to similar reasons – underdeveloped farming.   During reduced milking season Georgian dairies by 80-85% depend on dry milk starting November to April,however the percentage changes in April till November in favor of natural milk. Natural milk is much cheaper: its price is negotiable and dairies need not extra outlays for storing milk at warehouses like dry milk. However another problem is that the bigger part of natural milk is diverted to cheese producing, Georgia ranks nearly number 5th cheese consumer country worldwide. All these factors affect prices on milk product in Georgia irrespective that Georgian milk market is by nearly 100% provided by locally produced goods. The problem is that its key ingredient – milk powder is by 100% imported. 
“Georgia does not produce milk powder, it fully depends on dry milk during fall-and-winter till April when the milking season resumes, and therefore we are tied to the international market trends where the price on dry milk increased by 100% due to droughts and crop failure that directly affects cattle breeding and milking. The international giants like Danon could not resist this trend and increased prices either, ” Koniahsvili explained. He thinks that the price has already reached its peak actually, although cannot exclude any further slipping of prices upward. Neither did dairies.

“I cannot say for sure that the prices will not change any more, it depends whether or not any of components [that defines the pricing policy] changes,” Erekle  Gamkrelidze, Deputy Director General of Sante, one of the biggest market players that shares the market along with Eco-food by approximately 40-40%, told Georgian Journal. “The first tide of price hike was determined by currency fluctuation risks plus price hike on fuel. We have not increased prices on our product starting 2007 but could not maintain any more.”
Wimm Bill Dan Georgia, a part of the Russian-based Wimm-Bill-Dan Group [one of the biggest dairies of Europe],  also expected 15% price hike by September due to reduced volumes of natural milk and price hike on milk powder.
Whether or not prices will go high on milk depends on companies’ policy as well, Koniashvili believes. The point is that sales on milk and milk product increase in fall and winter usually, and price hike may cause slump in demand and affect sales. Koniahsvili thinks that it is quite possible to detain current prices at the expense of enhanced sales till spring when the milking will resume. But none of dairies complains of reduced sales and shun guaranteeing fixed prices.

Other Stories
EU to allocate € 13 billion for Eastern Partnership countries, including Georgia
The European Union together with the World Bank plans to allocate investment worth € 13 billion for infrastructure projects in the Eastern Partnership countries.
Anaklia Port and its importance for Georgia
In 2016, Anaklia Development Consortium was authorized to launch the construction of Anaklia Port.
Cryptocurrency mining threatens electrical network in Abkhazia
In the breakaway region of Akbhazia rampant cryptocurrency mining is threatening the shaky electrical network, reports an article of the news portal EuroNet.
Caucasus Wine University to be opened in Gurjaani
In the Kakheti region a new viticulture campus of the Caucasus University is in the process of planning.
Photos describing life of the poorest in Georgia
Fight with poverty should be among top priorities of every government in every country.
Training farmers to rescue the organic hazelnut production in Georgia
Even drizzling rain and unpleasant gusts of wind can’t prevent the farmers from coming and participating in the agricultural training.
Bleak times for organic farmers in Georgia – but there is hope
Organic hazelnut production is a delicate plant in Georgia that has emerged just a couple of years ago. Various pests, among them the Asian stink bug Parosana, trouble hazelnut farmers and menace their livelihood – even before their businesses could really take off.
Hybrid car imports are going through the roof in Georgia
Thanks to their fuel economy, the popularity of hybrid cars is increasing in Georgia, where fuel affordability is low and prices for fuel are unstable.
The New Year offer from MAQRO Construction - Apartments with unbelievable discounts and the parking spaces for FREE!
Location, green yard, spaces for various needs, experience of the construction company and parking space are the main important criteria for potential buyers of apartments.
Interview with the co-founder of Kiwi Vegan Café – the first vegan place in Tbilisi
Behind the Kiwi Vegan Café stands a group of activists who wants to raise Georgian’s awareness for animal rights and welfare.
Biblusi opens first shop for tourists - Georgian
The largest book shop in Georgia Biblusi opens the first shop specially designated to the needs and interests of tourists and named it Georgian.
Georgia improves by five ranks in the Prosperity Index
In the overall Prosperity Index rankings, Georgia has climbed by 5 positions from 85 to 80 when compared to last year. As such, Georgia is the best performing country in the CIS zone.
The future is bright for electric cars in Georgia
The numerous hybrid cars in the streets of Tbilisi cannot be overlooked. Entrepreneur Sulkhan Gvalia calls them “pagers”, referring to the predecessor of mobile phones.
Georgia’s fight against the big tiny enemy – Asian Parosana
It’s a tiny creature, but the harm it did to the Georgian agriculture sector was and still is immense.
New cable route: from Kobi to Gudauri in 15 minutes
On the 15th of December, cable transport is scheduled to be opened connecting Kobi and Gudauri.
Tourist boom in Gudauri – majority of hotels are booked by foreigners
Gudauri is among the most popular winter resorts in Georgia.
Medical tourism increases in Georgia
In the last 9 months, Georgia was visited by 19 500 foreigners for medical and recovery purposes.
Doing business in Georgia has become easier than in America
According to the Doing Business 2019 report published by the World Bank, Georgia ranked 6th among 190 countries in terms of simplicity of doing business. This was an improvement over two ranks compared to last year.
Problems that foreigners frequently face in Georgia
The importance of Georgia as a tourism hub is growing year after year.
Tbilisi TV Broadcasting Tower – Better than the Eiffel Tower?
It is planned to renovate the Tbilisi TV Broadcasting Tower, one of the landmarks in the capital.
Georgian Fusion Menu by The Biltmore Hotel Tbilisi
5,895,914 international visitors have visited Georgia between January and August of 2018. Compared to the previous year the number has increased by 12.2 per cent.
Advertising of gambling and lucrative games may become banned in Georgia
Advertising of gambling and lucrative games may become banned in Georgia. Those who violate the new rule would be fined GEL 10 000.
Lebanese café-lounge Beirut opens in Tbilisi
What is necessary to organize an unforgettable event? – Fun, emotions, lots of surprises, good music and delicious menu.
Georgia second among the fastest growing tourist destinations in Europe
Georgia is among the fastest growing tourist destinations in Europe. The data is published by the UN World Tourism Organization.
Bitmain launches world digital mining summit in Tbilisi, Georgia
Bitmain CEO Jihan Wu and Roger Ver, CEO of Head Speaker List featuring Circle, and Genesis Mining when Digital Mining Leaders Convene In Tbilisi on September 21-23

Exchange Rates
GEL Exchange Rate
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
January 2019
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31