Georgia without any hesitation can be considered an emerging aggressive producer in the fast expanding world hazelnuts and walnuts markets. Georgian nuts producers significantly benefit from the climate compare to the competitors, which few times prevented crops from failure while their competitors experienced big losses. With the growing support of the EU and thanks to the local hard working small farmers the country is poised to compete within few years in the hazelnuts world market even with Turkey, the recognized world leader in the industry.
Hazelnuts and walnuts are really “Golden Nuts” and not only because of the growing world demand for confectionery products, Nutella is just one of the examples, but also due to the multiple application of these nuts in other industries. To be precise one should call these nuts’ shells a golden mine as their unexpectedly multiple industrial usage is very widely spread. Hazelnuts’ shells are used for production of heating materials, building insulation, paper production, biofuel – to name just a few of them. Walnuts’ shells application even more extended. So, they are major ingredients in blast cleaning from paints from buildings, cars, industrial equipment without damaging surfaces.
Without walnuts’ shells … no proper oil circulation as namely these tiny shells are used in oil wells for regaining oil circulation. And of course soap industry, cosmetics and filtration should follow while not to conclude the list of the walnuts’ shells application.
Based on these facts EC develops a very important project – ECO°PAPER. Its objective is to improve the production chain for confectionary goods by making using nuts shells within the packaging of the produced goods.
Below are extracts from Trade Insight, Delegation of the European Union to Georgia Newsletter, reprinted with the kind permission of the Delegation of the European Union to Georgia.
The first quarter of 2015 has changed Georgia’s statistical picture; walnuts and hazelnuts took the first place on the list of the Georgian goods exported to the European Union, valued at €39.6 million. In a bigger picture, this commodity ranked third following copper ore, concentrates and motor vehicles, valued at €54 million, €51 million and €45 million respectively. Hazelnuts and walnuts are not winter season products, but creating modern enterprises made it possible for them to become multi-seasonal export commodities. Walnuts and hazelnuts sold in January-March 2015 belonged to summer 2014 harvest but producers had kept them until the most convenient conditions were created for them in the market. Last year, the Georgian nut business was very lucky. This happened at the expense of the producers from neighbouring Turkey, but only nature was guilty in this respect – due to unusual freezing and winds, last year’s harvest was reduced by two thirds in Turkey. Traditionally, Turkey covers 70 percent of the world production so the crisis in this country affected every continent.
FreeWorld Trading calculations revealed last autumn the price of nuts in Great Britain increased from the equivalent of €3-5 to €8-10, reaching a10-year high. Georgia has so far not been a key player of the world nut industry, but with most of the crops having been destroyed elsewhere, the share of Georgian-produced nuts in the global market significantly increased.
In comparison: Hazelnut Promotion Group calculations revealed that in spite of the crisis, Turkey gained €2billion from exporting nuts in autumn 2014 – about 50 times more than Georgia, where the year’s harvest was good. “In recent years, Georgian exports have dramatically increased and now we need to get ready and not to lose the position we managed to take last year even if there is a good harvest in Turkey in 2015. The quality is most important in the world market,” this is how Aleko Motserilia, chairperson of the Hazelnut Growers Association described the main threat to the Georgian nut industry. Over the past six years, for example, Georgia has done well in the market and production has increased by 19 percent. Nowadays Georgia competes with Italy and neighbouring Azerbaijan for the second or third positions in hazelnut production. Georgian hazelnut kernel export marked 10.8 percent (2013 data) of the world industry, which was the country’s historic maximum. Georgia’s Agriculture Minister Otar Danelia believed this field has an even brighter future in Georgia. “Hazelnut exports have exceeded wine exports. This field has the potential to grow, at least, by three times, which will benefit not only western Georgia. We are carrying out important activities in order to boost the field, including agro machinery, implementing innovations, which will double or triple our harvest. If nowadays we get about one tonne per hectare, we will very easily reach two tonnes in the near future. This [hazelnut] must become one of the country’s most popular products,” Danelia said. Two tonnes per hectare is the normal amount for Turkey and the rest of the world.
Mikheil Dundua, director of the association of young analysts and scientists Doctrine published his assessments: “By the year 2019, the income received from hazelnut production will not be less than €255 million. This will improve the country’s, social situation.” Among the families involved in hazelnut business in Georgia there are about 50 000 families for whom this is the primary source of income. International donors expected that these farmers’ income could be higher, even with the existing prices. The problem was that Georgian farmers were not well-prepared and they did not know the market well enough. “The share of primary raw material producer farmers is no more than 30- 35 percent. Sadly, farmers cannot independently reach the export market so they are depended on mediators. The goal is for the field to be better organised, the quality of product to be inPhoto by ENPARD creased, new technologies to be learnt and for all of these to allow primary raw material-producing farmers to sell their products with the best price and improve their families’ wellbeing,” Levan Dadiani, program manager of the British organization Oxfam said.
Doctrine Director Mikheil Dundua named another problem in the field. For example, in 2012, 22 000 kilos of hazelnuts were returned back to their Georgian producers as the product was of low quality. Small businesses have neither the knowledge nor the ability to establish the full cycle of export. Many of them gather hazelnuts too early, before they are dry enough and they do not dry them properly afterwards. Such hazelnuts weigh more but they would very easily and there is a high possibility that such hazelnuts will not withstand a long journey. Many Georgian producers do not have store houses and dryers that meet standards. They sell their crops very early, in autumn, about 3-4 month after hazelnuts are gathered. During this period the price of hazelnuts is lowest in the global market. “There are acute problems such as chemicals, land expertise, subsidies, which the Agriculture Ministry could solve,” Levan Shonia, SamegreloZemo Svaneti Governor said. Specialists believed one of the solutions to these problems is helping farmers gain economies of scale. About 80 percent of farmers grow hazelnuts on less than 0.5 hectares of land in Georgia. This means a share of larger farms is no more than 20 percent. The European Union is actively engaged in supporting the modernization and further development of the hazelnut sector in Georgia. In order to help small hazelnut growers to gain economies of scale and to increase their production, the EU-funded ENPARD programme is supporting, through various international and local NGOs, the establishment hazelnut farmers’ cooperatives. More than 20 cooperatives of this kind have been already assisted in the West of Georgia with technical trainings and small capital investment, including machinery and modern equipment. ENPARD is also financing modern demonstration plots for improving hazelnut orchards and helping the Ministry of Agriculture in developing better policies for the sector. Additionally, the EU is also providing financial assistance to improve the safety and quality controls of the nuts by investing in the modernisation of the laboratory of the Ministry of Agriculture.