Now we are missing opportunities that we will regret later

According to the Customs Committee, from January to October 2023, food products worth $1 billion 787 million were imported into the country, by 2.8% less than in the same period last year. So, over 10 months of 2022, the cost of food imports amounted to 1 billion 838.3 million. As you can see, from January to October of this year, food imports decreased by $52.2 million in value terms compared to the previous year. The reason for the decline was the decline in food prices on the world market. So, over ten months of this year, the cost of importing wheat into the country decreased by 25% compared to the same period of the previous year, and the cost of importing fats and oils of vegetable and animal origin - by 28.6%. Calculations showed that the amount of funds exported from the country decreased compared to the same period of the previous year only for two groups of goods (wheat, fats and oils of vegetable and animal origin) by $146.2 million.

It should also be noted that over the 10 months of 2023, the number of food products imported into the country increased by 87.3% in value terms compared to the same period in 2013. This means that $833.3 million more funds were withdrawn from the country for the import of food products than ten years ago.

In January-October of this year, imports of meat, milk, rice increased compared to the same period of the previous year, both in physical weight and in value terms. At the same time, the growth in imports of fats and oils of vegetable and animal origin amounted to 1.1% in physical weight.

In January-September of this year, the main livestock products increased markedly compared to the same period of the previous year, both in physical weight and in value terms. Thus, over 10 months, imports of meat increased by 11.7% in value terms, by 3.1% in physical weight, milk and cream - by 23.8% in physical weight, by 36.4% in value terms, and imports of live cattle intended mainly for slaughter - by 58.9% in value terms.

The reduction of imports of butter and other oils made from milk this year by 14.7% was made possible due to the stock of oils accumulated in the previous year. So, compared to the previous year, in 2022, butter and other fats made from milk were imported into the country by 3,528 tons more, which is 1,238 tons more than the import of butter that decreased in 10 months of this year (2,290 tons). It should also be noted that in the coming months, due to the reserves remaining from the previous year, there may be a reduction in imports of butter and other oils made from milk. 

Over 10 months of this year, grain imports decreased by 19.4% in value terms compared to the same period of the previous year. As already noted, this became possible as a result of cheaper grain products on the world market. For ten months, wheat imports decreased in physical weight by 6.9 thousand tons compared to the same period of the previous year. At the same time, rice imports in physical weight increased by 1.9 thousand tons, and corn - by 7.2 thousand tons.

On the other hand, there has been a significant increase in imports of products derived from grain. Thus, in January-October of this year, imports of finished products from grain, flour, starch or milk; flour confectionery products increased by 16.8% compared to the same period of the previous year, products of the milling and cereal industry; malt; starches; inulin; wheat gluten - by 33.9%.

From the beginning of this year to the end of October, there was also a significant increase in imports of a number of groups of goods. The cost of imports of fish and crustaceans, shellfish and other aquatic invertebrates in January-October 2023 compared to the same period of the previous year was compared to the same period of 2022. 20.5%, imports of finished products from meat, fish, crustaceans, shellfish or other aquatic invertebrates - 2.2%, imports of live cattle, mainly intended for slaughter in value terms increased by 58.9%, imports of finished products from grain, flour, starch and milk - by 16.8%, imports of sugar and confectionery of sugar - by 21.6%, various food products - by 5.7%, and products of the flour and cereal industry; malt, starch; inulin; wheat gluten - by 33.9% (Table 2).

In January-October 2023, the bulk of exported fruit and vegetable products were tomatoes, potatoes, hazelnuts (hazelnuts), apples, persimmons (dates) and pomegranates. Exports of fruits and vegetables, which are one of the country's main exports, increased by 16.2% in physical weight and by 11.4% in value terms over the 10 months of this year compared to the same period of the previous year. In the export of products, with the exception of potatoes and tomatoes, there was a significant increase both in physical weight and in value terms.  Exports of hazelnuts this year increased by 21% in physical weight compared to the same period of the previous year, apples - by 25.5%, persimmons - by 7.9%, and pomegranates - by half.  During the same period, potato exports decreased in physical weight by 9.1% and by 11.4% in value terms, tomato exports decreased in physical weight by 1.3% and by 8.0% in value terms (Table 3).

It should also be noted that over the past 3 years, tomato exports have fallen sharply. Thus, in January-October 2023, tomato exports decreased by $46.9 million, that is, by 27.1%, in value terms, and by 46.9 tons, that is, by 29.2%, in physical weight, compared to the comparable period of 2020. This means that in ten months of this year, tomato exporters earned $46.9 million less than two years ago.

In January-October of this year, there was a significant decrease in exports of a number of goods compared to the same period of the previous year. So, for 10 months, the export of fats and oils of vegetable and animal origin decreased in physical weight by 19.5%, sugar - by 29.5%, and tea - by 2.7 times.

Over the ten months of 2023, the cost of importing 1 ton of wheat imported into the country decreased by $84 (24.3%) compared to the same period of the previous year, and the cost of importing 1 ton of fats and oils of vegetable and animal origin - by $523.2 (29.5%).

Research shows that while the prices of some food products on the world market are declining, these same products are imported into the country at high prices. Thus, if the prices of meat on the world market decreased by 3.4% compared to the same period last year, for milk - by 20.1%, then for 10 months of this year the price of meat imported to Azerbaijan increased by 8.4%, and for milk - by 10.2%. The increase in prices for imported food products, in turn, led to an increase in prices on the domestic market of Azerbaijan.

According to the data provided by the State Statistics Committee (SSC) over October of this year, the consumer price index for food products for January-October 2023 amounted to 117.2% compared to January-October 2022.

In April of this year, the consumer price index for food products amounted to 100.2% compared to the previous month and 111.4% compared to the corresponding month of the previous year. The consumer price index for food products in January-October 2023 amounted to 111.7% compared to January-October 2022.

It should be noted that food prices in the world were  by 10.9% lower than in the same period last year. Thus, according to FAO, in October 2023, the FAO food price index fell by 10.9% compared to the corresponding period last year. And in Azerbaijan, in January-October 2023, consumer prices for food products increased by 11.7% compared to the same period last year. As you can see, while food prices decreased by 10.9% in the world, they increased by 11.7% in Azerbaijan.

The message published by the SSC says that in October of this year the largest price increase was observed compared to the previous year for rice, beef and lamb, fresh fish, milk, eggs, grapes, tomatoes, cucumbers, peppers, eggplants, carrots, beets, potatoes, garlic, fruit juices. As you can see, the main livestock products (beef and lamb, milk and eggs) have risen in price.

It is regrettable to note that during the year more than $2.3 billion (2022) exported from Azerbaijan for the import of food products expand the business of farmers in other countries, improve their social situation. The opportunities of our country are being missed along with these financial resources. Although today Azerbaijani peasants and farmers need these funds more.

In conditions when the purchasing power of the country's population is low, the annual increase in imports of livestock products can be associated with a decrease in the production of these products within the country. In general, considering the statistics of imports of livestock products over the past few years, it can be concluded that the country's demand for meat and dairy products is dependent on imports. In accordance with the trade interests of monopolists interested in imports, this dependence continues to grow. And the domestic product, which has not found a place in the domestic market, is being displaced from the markets.

It is for these reasons that the production of agricultural products decreases every year.  Although local farmers have the opportunity to earn a good income from the production of agricultural products, unfortunately, these opportunities are being missed. Now we are missing opportunities that we will regret later.

Azerbaijan can fully satisfy its demand for food products at the expense of domestic production. Azerbaijan has favorable soil and climatic conditions for the production of basic foodstuffs and agricultural products. In addition to ensuring its food security, Azerbaijan can export a number of food products and agricultural products to other countries in large volumes. To do this, it is necessary to eliminate existing problems in this area and train professionals, specialists in this field.

One of the main tasks facing the Government of Azerbaijan should be the maximum satisfaction of the population's needs for food and agricultural products at the expense of domestic production, the elimination of dependence on imports. It should be noted once again that all resources are sufficient to fully meet the needs of Azerbaijan for food products in the country.

APPLICATIONS

Appendix 1

Table 1. Food imports for January-October 2022 and 2023 (quantity in tons, cost in thousand USD). Source: State Customs Committee

Attachment 2

Table 2. Food imports in January-October 2022 and 2023 (cost in thousands of dollars). Source: State Customs Committee

Attachment 3

Table 3. Exports of agricultural products in January-October 2022 and 2023 (quantity in tons, cost in thousand USD). Source: State Customs Committee