Using alternative route for wheat delivery will lead to growth of grain prices to 25 drams per 1 kg

ArmInfo. According to the most pessimistic forecasts, in case of non- receipt from the Georgian counterparts of a discount on the supply of grain to Armenia by rail, the cost of 1 kg will rise by 25 drams, Minister of Agriculture of Armenia Artur Khachatryan told journalists on August 31. According to him, Georgia justified its restriction by the fact that large trucks lead to traffic jams at the Upper Lars checkpoint. Considering this, the Georgian side offered to transport cargo by ferry to the harbor of Poti and then by rail to deliver goods to Armenia.

’he Minister said that as of today negotiations are underway between the relevant bodies of Armenia and Georgia to receive certain discounts on rail transportation in order to mitigate the negative impact on the final price of grain and flour in Armenia.

It will be possible to tell how much the bread will rise in price, only after the amount of discount will  be clarified . "If the discount is substantial, then perhaps there will be no increase, otherwise, according to some estimates, it can rise in price to 25 drams per 1 kg," Khachatryan said. Touching upon the statements that Armenia should possibly think about becoming a country that is self-sufficient in terms of grain, Artur Khachatryan stated that the country does not face any such task, "Why should Armenia be a self-sufficient country in terms of grain?" If a private trader faces a dilemma -whether to grow grain or a higher-valued crop on the given territory, then, of course, he will choose a plant that promises him a higher profitability, "he explained. Khachatryan believes that non-cultivated land plots with irrigation problems could become an optimal area for sowing grain.

It was reported earlier that the Minister of Finance of Georgia by his order, which comes into force on September 15, completely banned the land transportation of wheat. However, it is not completely clear whether this order extends to transit carriers. According to the new order, it is possible to import or export wheat and corn in the customs territory of Georgia only by sea or by rail. Private importers, according to the Georgian "Business Georgia", who for years import wheat into the country, require explanations.  Supposedly, the new regulation will cause rise of the prices of wheat and bakery products, and thousands of people employed in companies will remain unemployed. Importers evaluate the decision as a pressure on the business, and demand a meeting with the Minister of Finance.  The situation was commented on by the leader of Georgia's Labor Party, Giorgi Gugava, who said that Bidzina Ivanishvili's closest associates want to establish monopoly on the wheat business with the help of ''Agricom'' company, and the order of the Finance Minister is backed by Ucha Mamatsashvili and Otar Partskhaladze. The "Agricom" company according to the publication, is one of the monopolists in this business. The company has a marine grain terminal in Poti. In Armenia, however, it was estimated that the innovation would lead to an increase in grain prices by $ 50 per ton. Today, it was reported that, following negotiations between the South Caucasus Railways and Georgian Railways, starting from September 1, 2018, tariffs for rail freight to Armenia will be reduced by 52%. According to the "SCR", the matter concerns the supply of grain by rail from the harbor of Poti to Armenia.