Food Imports Are Increasing: The Situation Is Critical, Urgent Measures Are Needed

In the first half of 2024, food products worth 1 billion 131 million 483 thousand USD were imported into the country, which is 73 million 54 thousand USD, by 6.9% more than in the same period of 2023, State Customs Committee (SCC). In January-June 2023, food products were imported into the country for 1 billion 58 million 429 thousand USD. Over  the past 5 years, imports of food products in January-June increased by 55.3%, and over the past 10 years - by more than 2.2 times.

In January-June of this year, compared with the same period in 2023, there was a significant increase in imports of meat, milk, butter, fruits and vegetables, tea, rice, vegetable and animal fats.

According to the State Statistics Committee (SSC), in January-June 2024, gross agricultural output increased by 0.3% compared to the same period last year, including livestock production by 2.1%. Over the first 6 months of 2024, Azerbaijan produced agricultural products worth 6 billion 19 million manats, of which 3138.7 million manats accounted for livestock products, and 2881 million manats for crop production, the message published by the SSC.

In January-June, we observed a serious increase in imports of basic livestock products, although in the 6 months of this year, the SSC indicated an increase in livestock production by 2.1% compared to the same period of the previous year. Thus, in 6 months of this year, meat imports increased by 23.7% in physical weight and by 44.9% in value terms compared to the same period of the previous year. Milk imports increased in physical weight by 8.5%, and imports of butter and other fats from milk increased in physical weight by 58.9% and by 51.1% in value terms.

In January-June of this year, meat production in the country increased by 4 thousand 900 tons in live weight compared to the same period of the previous year, and imports in net weight by more than 5 thousand tons, the data by SSC. The question arises: why, with such an increase in production, with such an increase in supply, meat and meat products in the country have steadily risen in price over the past year (Table 3)? How can this happen in a country with a low purchasing power of the population?

The same situation is with  milk and dairy products. The SSC notes that in 6 months of this year, 1 million 134.1 thousand tons of milk were produced in the country, and although milk production increased by 1%, milk imports increased by 8.5% in physical weight during the same time, and butter and other fats from milk by 58.9%. In general, when converting butter into milk, it turns out that in January-June of this year, milk was imported by 120.8 thousand tons more than in 6 months of last year.

The data published by the  SSC (on price changes in the consumer market) indicate that over the past year, the main products of animal husbandry, namely meat and dairy products, have steadily risen in price (Table 3).

In January-June of this year, imports of fats of vegetable and animal origin increased in physical weight by 23.3%, in value terms by 7.7%. It is worth noting that in January-June, compared with the same period of the previous year, the import value of fats and oils of vegetable and animal origin decreased markedly. So, if in 6 months of 2023 the import value of 1 ton of vegetable oils imported into the country amounted to 1360.6 USD, then in the same period of 2024 the import value of oils decreased by 12.7% and amounted to 1187.3 USD.

95% of the vegetable oil consumed in Azerbaijan is imported. At the same time, against the background of a significant decrease in the cost of imported oils, there is no adequate reduction in prices for vegetable oils on the domestic market. In January-June 2004, imports of sugar and sugar confectionery increased by 6% in value terms compared to the same period last year.

In January-June 2024, exports of one of the main export goods - fruits and vegetables decreased compared to the same period of the previous year in physical weight by 7.7% and by 4.5% in value terms. Exports of potatoes and hazelnuts have also been seriously reduced. Thus, in January-June 2024, potato exports decreased by 32.1% in physical weight and by 33.9% in value terms compared to the same period of the previous year.

The SSC also recorded a decrease in potato production in 6 months of this year. According to the committee, 358.1 thousand tons of potatoes were produced in January-June 2024, by 17% less than in the same period last year.

In January-June 2024, apple exports decreased by 1.8%. In addition, from January to June 2024, persimmon exports increased in physical weight by 74.5% and by 88.3% in value terms.

Pomegranate exports decreased by 41.1% in physical weight and 2.4 times in value terms over the 6 months of this year. It should also be noted that over the 6 months of this year, the total revenues of pomegranate exporters decreased by 2.4 times. So, in January-May last year the export value of 1 ton of pomegranate was var 1301.7 USD,   and  in the same period this year it decreased by 31.3% to 893.7 USD.

Also, from January to June 2024, there was a serious reduction in exports of hazelnuts. Thus, in 6 months of this year, exports of hazelnuts decreased by 31.1% in physical weight and by 14.3% in value terms compared to the same period of the previous year.

Exports of hazelnuts have decreased in physical weight by 32.8% over the past 5 years, and the incomes of hazelnut exporters have decreased by 24.2%. Thus, in January-June 2024, exports of hazelnuts decreased from 12.5 thousand tons to 8.4 thousand tons compared to the same period in 2024, and the income of exporters from 68.5 million USD to 51.9 million USD.

Speaking at the republican meeting of non-oil exporters, Head of State Ilham Aliyev said: "I also want to say about the products that brought us the largest amount of currency in 2016.  Hazelnuts are in the first place — they brought our country currency in the amount of 105 million. The development of hazelnut farming is very fast. It was mentioned here that we have planted 15,000 hectares of new hazelnut orchards, and this work is proceeding at a high pace. Including sericulture. If in 2015 we harvested 200 kilograms of silkworm, then last year this figure amounted to 70 tons. This year there will be 100 tons. More hazelnuts are grown in 19 of our districts, but 46 districts have potential. I believe that we can double both the production and export of hazelnuts. We can safely bring these 105 million to 200 million." Despite the fact that the area of hazelnut crops has increased by 45.4% since 2016, during this time, not only has it not been possible to increase hazelnut exports by 2 times, as the head of the country said, but even in 2023, hazelnuts were exported for a total of 123 million USD, which is not much different from 8 years ago (2016).

In the first half of this year, tomato exports increased by 5.6% in physical weight and by 13.4% in value terms compared to the same period of the previous year. Studies have shown that over the past 4 years, the incomes of tomato exporters have also decreased.

In 2019, at the opening of the Scientific research Institute of vegetable growing of the Ministry of Agriculture, President Ilham Aliyev, said that "the export of tomatoes brings us the largest income from agricultural products. Farmers are willing to do this, and other vegetables are being grown at a very high rate. We are increasing production every year." Despite the fact that after the president's speech, tomato exports in 2019 (in the first half of the year) increased to 138 million USD, and in 2020-to 162.3 million USD, in subsequent years it fell sharply. From January to June 2024, the income of tomato exporters decreased by USD 25.4 million compared to the same period in 2020.

Thus, from the indicators of food imports in the first half of 2024, it follows that imports of food products increased by 6.9% compared to the same period of the previous year, by 55.3% over the past 5 years, and by more than 2.2 times over the last 10 years. The sharp increase in imports of livestock products in January-June of this year indicates the deplorable state of animal husbandry in the country. In six months, 140 million USD (238 million manats) were exported from the country for the import of meat, milk and butter, which is 91.7% more than 5 years ago (73 million USD) and 4.9 times more than 10 years ago (28.1 million USD).

In the first half of the year, there was a significant increase in imports of fruits and vegetables from crop production.  In January-June 2024, the SSC recorded an increase in vegetable production by 3.4% compared to the same period of the previous year, and fruit production by 8.4% compared to the same period last year. A paradoxical situation arises. Although the SSC notes an increase in vegetable production by 3.4% and fruits and berries by 8.4%, imports of fruits and vegetables increased by 18.4% in physical weight and 29.3% in value over the same period. On the other hand, exports of fruits and vegetables at the same time decreased in physical weight by 7.7%. That is, the export of fruits and vegetables, which are the main export product of Azerbaijan, has decreased, while imports have increased.

Calculations show that the quantity of currency exported from the country for many years for food imports continues to grow seriously. Thus, in January-June 2024, the volume of currency exported from the country for food imports increased by more than 2.2 times compared to the same period in 2014. This also means that more currency is exported from the country year after year to import food products. The paradox is that over the years, the cost of importing food has increased significantly, while revenues from exported products continue to decline.

In general, after reviewing the statistical indicators related to imports, it can be concluded that the country's demand for food products depends on imports. In accordance with the interests of monopolists involved in the import of food products, this dependence continues to increase. Local products cannot find a place in the domestic market because they cannot withstand competition, they are being forced out of the markets. For the same reason, agricultural production decreases from year to year. Domestic farmers and peasants have the opportunity to earn good incomes from the production of products, but unfortunately, these opportunities are being missed.

Azerbaijan can fully satisfy its demand for food products and agricultural products through domestic production. Azerbaijan has favorable soil and climatic conditions for the production of basic food products and agricultural products. Azerbaijan can not only ensure its own food security, but also export large volumes of fruits, vegetables and other agricultural products to other countries. To do this, it is necessary to attract experienced, professional specialists and personnel to this area, who will determine the agrarian policy of Azerbaijan.

One of the main tasks of the Azerbaijani government should be to maximize the satisfaction of the population's needs for food and agricultural products through domestic production, and eliminate dependence on imports. I repeat, all the resources in the country are sufficient to fully satisfy Azerbaijan's needs for food products.

P.S. In theory, Azerbaijan should have reduced food imports and increased their exports over the past few years. Because over the past 4 years, 591.776 thousand hectares of arable land liberated from occupation (231.056 thousand hectares of acreage, 351.822 thousand hectares of pastures and hayfields, 8.898 hectares of homesteads) have been transferred to Azerbaijani farmers for use.

APPLİCATİONS

Table 1. Food imports for January-June 2023 and 2024 (quantity in tons, value in USD). Source: State Customs Committtee

Table 2. Exports of agricultural products (Quantity in tons, valued in USD) in January-June 2023 and 2024. Source: State Customs Committee

Table 3. Consumer price index for food products for July-December 2023 and January-June 2024 by product groups, compared with previous months, in %x. Source of the SSC