Bread Price Journal
19 September, 2013
Bread Price Journal
Price on the imported flour plunged by 20% since August and reduced the bread price by around 5-10 tetri. However, bakeries seem reluctant to likewise lower the prices on their products in the near future because they believe prices are already low in Georgia compared to neighboring countries. Nevertheless they do not rule it out if the low prices on wheat remain stable at the international market.
Thanks to brimming crop worldwide this year, commodity prices on wheat went down
from USD 370 per ton (the price that prevailed in the period from November 2012 to March 2013), to USD 260-270 in August 2013. Actually, wheat prices reached their peak of USD 370-380 by the end of 2012 due to harvest losses. Then they started downwards from March this year, as the 2013-2014 year harvest forecast was optimistic, and reached the bottom USD 270 by past June. As a result, prices for flour dropped from GEL 44 [fixed in January of 2013] to 37 per 50 kilo sack at mills in Georgia in August. This is over 20% price drop which implies at least 10% drop on bread prices, economic analysts explain. However, Georgian bakeries did not took off a single tetri from old prices ranging from 60 to 80 tetri per 600-700 gram loaf. Generally, Georgian entrepreneurs including bakeries eagerly react to the slightest price-ups at the international market but shy with the price-drops. Past fall when prices went up on bread due to the price hike for flour, Malkhaz Dolidze, Chairman of the Association of Bread Producers as well as Director of Bakery #4, said, GEL 44 was a critical margin after which bakeries could not maintain old prices. However, now when flour price were reduced from the critical GEL 44 to 37, he does not set the bottom margin after which bakeries are supposed to cut bread prices down.
“Bread price is a matter of competition; you can find a loaf for 40-50 tetri too but it weighs less of course. Yet, it creates competition,” Dolidze said in the interview to Georgian Journal. “Besides, flour is not a decisive factor. There are other significant expenses in bread manufacturing such as prices on water and electricity which are higher for entrepreneurs than households, plus distribution and so called shelf-price that supermarkets and marketplaces add to the price fixed by bakeries. Besides, bakeries have outstanding liabilities to mills that hinder bread plants from reducing prices on their products.” High energy and water prices have not changed for many years and they make up similar expenses on a year-to-year basis. However, bakeries used to increase prices on bread simultaneously as flour became expensive, explaining that flour made around 50% of the bread manufacturing cost. The sector experts say there is a psychological factor in play here: “our entrepreneurs are eager to increase prices when the market trend allows but react reluctantly to price slumps because they do not expect stability.” More than that, the trade outlets are unlikely to reduce prices if bakers do it. The former will enjoy the bigger profit margin leaving consumers to count losses. Therefore, bakeries prefer to enjoy higher profit themselves and keep old prices. Levan Silagava, Head of the Association of Wheat Entrepreneurs, assures that prices reached their bottom this year thanks to lavish crops and will not change at least till February when the southern hemisphere will come forward with its harvest. Dolidze does not rule out lower prices if international market keep stable but declined to specify expected length of the stability period. He believes the best remedy to maintain lower bread prices is cutting the value added tax on agricultural products from 18% to 10%.
Print
Other Stories
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 Bitcoin.com Head Speaker List featuring Circle, DEX.top and Genesis Mining when Digital Mining Leaders Convene In Tbilisi on September 21-23
GAZELLE FINANCE GEORGIA AND TBC BANK HELP THE WESTERN REGIONAL CENTER OF MODERN MEDICAL TECHNOLOGIES EXPAND ACCESS TO QUALITY HEALTHCARE SERVICES IN KUTAISI, GEORGIA
TBC Bank and Gazelle Finance have teamed-up to support Medical City, a leading healthcare provider in the western region of Georgia to launch the Western Regional Center Of Modern Medical Technologies.
PHOTO OF THE DAY
GEL Exchange Rate
Convertor
21.01.2019
22.01.2019
USD
1
USD
2.6629
2.6613
EUR
1
EUR
3.0368
3.0283
GBP
1
GBP
3.4463
3.4211
RUB
100
RUB
4.0103
4.0074
Other Stories
The European Union together with the World Bank plans to allocate investment worth € 13 billion for infrastructure projects in the Eastern Partnership countries.
In 2016, Anaklia Development Consortium was authorized to launch the construction of Anaklia Port.
In the breakaway region of Akbhazia rampant cryptocurrency mining is threatening the shaky electrical network, reports an article of the news portal EuroNet.
In the Kakheti region a new viticulture campus of the Caucasus University is in the process of planning.
Fight with poverty should be among top priorities of every government in every country.
Even drizzling rain and unpleasant gusts of wind can’t prevent the farmers from coming and participating in the agricultural training.
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.
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.
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.
Behind the Kiwi Vegan Café stands a group of activists who wants to raise Georgian’s awareness for animal rights and welfare.
GEL Exchange
USD
1
USD
2.6613
EUR
1
EUR
3.0283
GBP
1
GBP
3.4211
RUB
100
RUB
4.0074
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