BAKU, Azerbaijan, April 4. Georgia’s wine exports are projected to decrease in 2022, due to the armed hostilities between Russia and Ukraine, along with subsequent economic sanctions imposed on Russia, Trend reports via the economic review from the TBC Capital.
TBC Capital forecasts different scenarios for Georgia’s wine exports. Thus, in case of timely normalization of circumstances, the exports are expected to decrease by 33 percent, and in case of delayed resolution - by 44 percent.
In particular, Georgia’s wine exports to Russia in 2022 might decrease by 32 percent year-on-year (timely resolution) to $89 million, or by 50 percent (delayed resolution) to 65 million, compared to $130 million in 2021. The initial forecast (before the start of the hostilities) envisaged $144 worth of wine exports to Russia in 2022.
“Georgia has already seen the consequences of Russia's lion share in wine exports, as companies found it difficult to diversify in favor of more stable markets,” the TBC Capital said.
However, there were still positive signs on the market as diversification improved significantly compared to 2020, wine exports to Russia in 2021 decreased from more than 80 percent to 56 percent, while the export volume increased significantly, the report said.
“Furthermore, Russia is contributing the most to the export, but consumes the cheapest wine. An average export price of Georgian wine to Russia was $2.65 in 2021, which is lower compared to the price offered on new target markets,” TBC Capital noted.
Therefore, the exports of Georgian wine to Ukraine are expected to drastically decrease as well - by 89 percent year-on-year to $3 million worth of exports in both timely and delayed scenarios of resolution.
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