Over the past ten years, the volume of currency exported for food imports has increased by 2.4 times. But there is a way out

According to the State Customs Committee (SCC), in January 2024, food products worth 181 million 414 thousand USD were imported into the country, by 6.8% more than in the same period last year. In January last year, the cost of importing food products amounted to 169 million 761 thousand USD. As you can see, in January of this year, imports of food products in value terms increased by 11.6 million USD compared to the previous year.

Studies have shown that in January 2024, imports of livestock products in Azerbaijan increased significantly compared to the same period last year. Thus, in the first month of this year, meat imports increased in physical weight by 63.8% and amounted to 4,410 tons. At the same time, live cattle, mainly intended for slaughter, were imported into the country in the amount of 3 million 634 thousand USD, which is 43.9% more than in the previous year. In January, imports of milk and cream increased by 16.1% in physical weight to 1,074 tons, and imports of butter increased by 11.0% to 1,022 tons.

In the first month of 2024, wheat imports decreased in physical weight by 2 times and by 2.6 times in value terms. It should also be noted that the decrease in wheat imports in January, both in physical weight and in value, has already happened before. Thus, in January 2021, by three times less wheat was imported than it is now, both in value and in physical weight. Although there was a significant decrease in imports of grain products, imports of finished products from grain, flour, starch and milk increased by 34.7% (Table 2).

In January of this year, a serious decrease in imports of rice and corn was recorded. Thus, in the first month of 2024, corn imports decreased by 4.9 times in physical weight, and rice imports decreased by 34.6% in physical weight and by 26.3% in value terms compared to the same period of the previous year. The cost of rice imported in January this year increased by 12.6% compared to the same period last year.

The decrease in rice imports to Azerbaijan in January may be due to an increase in imports of the same product in the previous year. According to the State Statistics Committee (SCC), in January 2024, agricultural production increased by 1.2% compared to the corresponding month of the previous year, including livestock products - by 1.2%, vegetable production - by 0.8%.

The Committee informs that the cost of all agricultural products in January 2024 in actual prices amounted to 491.2 million manats, of which livestock accounted for 468.5 million manats, and crop production - 22.7 million manats.

In January 2024, 46.3 thousand tons of meat in live weight were produced, including poultry meat, 160.7 thousand tons of milk, 188.3 million eggs, compared with the corresponding month of 2023, meat production increased by 1.5%, eggs - by 3.4%, and milk production remained at the same level.

Despite the fact that in January of this year, the SCC showed that milk production remained at the same level, and meat production increased by 1.5% compared to the same period last year, in fact, in January of this year there was a greater increase in imports of livestock products. Thus, compared to the same period last year, meat imports in the first month of this year increased in physical weight by 63.8% and by 74.9% in value terms. It should also be noted that in January 2023 The cost of importing live cattle, intended mainly for slaughter, amounted to USD 2.5 million, whereas in the same period of 2024, imports of live cattle increased by 43.9% to USD 3.6 million. Isn't this a paradox?! Although the SCC shows an increase in meat production by 1.5%, its imports increased by 63.8%, and imports of livestock intended for slaughter - by 43.9%.

In January of this year, imports of milk and cream decreased by 25.8% in value terms, but increased by 16.1% in physical weight. Imports of butter and other fats made from milk increased in physical weight by 11%. It should also be noted that the cost of importing butter and other oils made from milk imported into the country in January this year decreased by 15.4%, and the cost of importing milk and cream - by 36.1%.

In January 2024, the cost of importing a number of goods into the country decreased significantly compared to the same period last year. While the cost of importing milk and cream imported into the country decreased by 36.1%, according to the SCC, the price of milk and dairy products in the country increased by 0.2% in January. The cost of importing butter and other oils from milk decreased by 15.4%. However, there was no significant decrease in butter prices in the domestic market. This situation once again indicates the existence of a monopoly on imports in the domestic market.

In January of this year, imports of vegetable and animal oils increased by 2.4 times in physical weight and by 90.6% in value terms. In the first month of this year, the cost of importing vegetable and animal fats and oils decreased by 22.2% compared to the same period last year. Unfortunately, despite a significant decrease in the import prices of oils, this change was not observed in the domestic market. While the cost of importing vegetable and animal fats and oils decreased by 22.2%, the prices of butter and vegetable oils in the country decreased by only 0.4%.

The situation is actually paradoxical, although Azerbaijan has the opportunity to provide itself with 100% fruits and vegetables of its own production, imports of fruits and vegetables increased in physical weight by 54.3% in January.

In January of this year, exports of fruits and vegetables increased by 21.0% in physical weight and by 21.2% in value terms compared to the same period last year. In January 2024, potato exports increased by 30.7% in physical weight compared to the corresponding period of the previous year, but decreased by 19.2% in value terms. Calculations show that this year, due to the low export value of potatoes, exporters' incomes decreased compared to the previous year. So, in January last year the export value of 1 kg of potatoes was 0.5 USD, and in January 2024 it decreased by 40% to 0.3 USD.

In January of this year, exports of persimmons increased by 49.2%, tomatoes - by 30.7%, apples - by 17.4%. At the same time, exporters of tomatoes, dates and apples were able to increase their incomes compared to last year by selling export products at a higher price.

Unfortunately, with the reduction of pomegranate exports by 36.2%, and the income of exporters decreased by 2.2 times. So, if last year the cost of exporting 1 ton of pomegranate was 1250.92 USD, this year it decreased by 30.4% to 870.68 USD.

In the first month of this year, exports of fats and oils of vegetable and animal origin increased by 68.5% in physical weight and by 31.9% in value terms. Calculations showed that the cost of exporting 1 ton of vegetable and animal fats and oils this year decreased by $496.63 compared to the previous year. So, if last year the cost of exporting 1 ton of vegetable and animal fats and oils was 2282.47 USD, then this year it decreased by 21.7% to 1785.84 USD.

Compared with January of the previous year, sugar exports in January of this year decreased by 5.6 times in physical weight and 4.6 times in value terms. So, in January last year 6,398 tons of sugar were exported for 4 million 773 thousand USD, and for the same period of this year the export of the same products in value terms amounted to 1 million 35 thousand USD, and in physical weight - 1,401 tons.

In January 2023 70 tons of tea were exported for 613 thousand USD, in 2024 tea exports decreased by 43.7% in value terms and 2.2 times in physical weight compared to the same period of the previous year.

Unfortunately, in the first month of this year, the incomes of not only food exporters, but also cotton exporters decreased. Thus, in January 2024, the income of cotton exporters decreased by USD 5 million 379 thousand compared to the corresponding month of the previous year. In the first month of 2023, Azerbaijan exported cotton worth 17.7 million USD, and the value of cotton exported in January 2024 amounted to 12.3 million USD, which is 30.3% less than in the previous year. Our calculations showed that in 2023 The cost of 1 ton of exported cotton fiber decreased by 19.9% compared to the previous year, and the cost of cotton yarn decreased by 12.2%. (Table 4). Compared to January of the previous year, exports of cotton fiber decreased in physical weight by 14.9% and by 31.9% in value terms, exports of cotton yarn decreased in physical weight by 37.0% and by 44.8% in value terms. Two years ago, in January 2022,  by 2.2 times more cotton was exported, that is, by 26 million 893 thousand USD.

In January of this year, cotton imports into the country increased by 3.2 times in value terms compared to the corresponding month last year. So, although the SCC showed an increase in gross agricultural output by 1.2% in the first month of 2024 compared to the same period of the previous year, including an increase in livestock production by 1.2%, crop production by 0.8%, in January of this year, imports of food products increased by 6.8%. Thus, in January 2024, food products worth 181 million 414 thousand USD were imported into the country, which is 11.6 million USD more than in the same period last year.

Although it was shown that in January of this year there was an increase in livestock production, there was an increase in imports of more livestock products.

Calculations show that the volume of foreign currency exported from the country for many years for the import of food products continues to increase. So, in January 2024, the volume of currency exported from the country for food imports was 2.4 times more than in January 2014.. So, 10 years ago in January, the cost of food imports was 74.9 million USD, and in January of this year, food products worth 181.4 million USD were imported into the country. This means that import entrepreneurs have to withdraw more foreign currency from the country every year to import food products. On the other hand, entrepreneurs from other countries receive hundreds of millions of USD, which should have gone to farmers and rural residents of our country.

APPLICATIONS

Appendix 1

Table 1. Food imports in January 2023 and 2024 (volume of tons, cost in thousands of USD). Source: SCC

Application 2

Table 2. Imports of some food products by commodity groups in January 2023-2024 (value in thousand USD). Source: SCC

Appendix 3

Table 3. Agricultural exports in January 2023 and 2024 (quantity in tons, value in thousand USD). Source: SCC

Table 4. Cotton exports in January 2023 and 2024 (ton, value thousand dollars). Source: State Customs Committee