Azerbaijan’s tomato exports grew to 86,067 tons in the first five months of 2024, generating $108.587 million.

What factors contributed to the increase in Azerbaijan’s tomato exports in 2024

Several factors contributed to the increase in Azerbaijan’s tomato exports in 2024:

1. Increased Production Capacity: Azerbaijan has significantly expanded its tomato cultivation area to 18,000 hectares, yielding over 800,000 tons annually. This increase in production capacity has enabled the country to boost its export volumes[1].
2. Government Subsidies: The Azerbaijani government has provided subsidies to support greenhouse cultivation, which has enhanced production efficiency and output. These subsidies have played a crucial role in increasing the volume of tomatoes available for export[1].
3. Competitive Pricing: The export price per kilogram of tomatoes was reported at 2.38 manats in the first quarter of 2024, which is competitive relative to domestic market prices. This competitive pricing has likely made Azerbaijani tomatoes more attractive to international buyers[1].
4. Seasonal Dynamics: Seasonal factors have also contributed to the surge in exports. The beginning of the year often sees the dismantling of old greenhouses and the construction of new ones, leading to a temporary decrease in production and a subsequent price hike. This seasonal dynamic has driven up export revenues[4].
5. Market Demand from Russia: A significant portion of Azerbaijan’s tomato exports is directed to Russia, driven by strong market demand. In 2023, 97.8% of Azerbaijan’s tomato exports went to Russia, which has continued into 2024[4].
6. Phytosanitary Certification: The issuance of phytosanitary certificates by Azerbaijan’s Food Safety Agency, which are required for exports to Russia, has facilitated the export process. These certificates ensure the tomatoes meet the necessary safety and quality standards, maintaining a steady export flow to Russia[4].

These factors combined have led to a substantial increase in Azerbaijan’s tomato exports, reaching 86,067 tons in the first five months of 2024, generating $108.587 million[2][3][5].

Citations:
[1] https://tradecouncil.org/azerbaijans-tomato-exports/
[2] https://www.freshplaza.com/asia/article/9643592/azerbaijan-tomato-exports-grew-to-86-067-tons-in-the-first-five-months-of-2024/
[3] https://www.azernews.az/business/227483.html
[4] https://www.freshplaza.com/asia/article/9614765/azerbaijan-s-tomato-exports-surge-driven-by-seasonal-dynamics-and-russian-demand/
[5] https://www.linkedin.com/posts/r-w-freight-services-ltd_new-zealand8217s-exports-fall-activity-7222205786318344192-qCtL

How did increased imports from Turkmenistan and Turkey impact local tomato prices?

The increased imports of tomatoes from Turkmenistan and Turkey notably impacted local tomato prices in Azerbaijan. Here are the key factors and their effects:

1. Surge in Imports: Azerbaijan imported 548 tons of tomatoes from Turkmenistan in the first four months of 2024, valued at $304.9 thousand, marking a fivefold increase from the previous year. Additionally, imports from Turkey rose dramatically, increasing 419 times from January to October 2023[5].
2. Domestic Price Increase: Despite the import surge, local tomato prices in Azerbaijan increased. In May and June 2024, prices ranged from 3 to 5 manats per kilogram, higher than the previous year. This suggests that the increased imports did not sufficiently offset the domestic demand to lower prices[5].
3. Export vs. Domestic Prices: The export price per kilogram of tomatoes was 2.38 manats in the first quarter of 2024, which is lower than the domestic market prices. This indicates that while Azerbaijan was exporting tomatoes at competitive prices, the domestic market faced higher prices, possibly due to supply-demand imbalances and market monopolies[5].
4. Market Dynamics and Subsidies: The Ministry of Agriculture highlighted that market forces regulate prices, and despite government subsidies for greenhouse cultivation, inefficiencies in bringing greenhouse produce to market contributed to higher domestic prices. Agricultural experts pointed out that logistical challenges and market monopolies played a role in the elevated local prices[5].

In summary, while Azerbaijan’s increased tomato imports from Turkmenistan and Turkey aimed to meet domestic demand, they were insufficient to curb the rising local prices, influenced by market dynamics and logistical challenges.

Citations:
[1] https://www.hortidaily.com/article/9615890/turkmenistan-tomatoes-are-gaining-ground-in-foreign-markets/
[2] https://www.selinawamucii.com/insights/prices/turkmenistan/tomatoes/
[3] https://east-fruit.com/en/news/turkmenistans-rapid-expansion-on-the-market-of-greenhouse-tomatoes-market-of-tajikistan-is-next/
[4] https://east-fruit.com/en/news/turkmenistan-completely-ousts-uzbekistan-from-tajikistans-greenhouse-tomato-market/
[5] https://tradecouncil.org/azerbaijans-tomato-exports/

What impact has the rise in Turkmen tomato exports had on the Russian market

The rise in Turkmen tomato exports has had several significant impacts on the Russian market:

1. Increased Market Share: Turkmenistan has rapidly expanded its presence in the Russian tomato market. In the first eight months of 2021, Turkmenistan exported 32,000 tons of greenhouse tomatoes to Russia, nearly doubling its exports from the previous year. This surge positioned Turkmenistan as Russia’s fourth-largest supplier of greenhouse tomatoes, with its market share reaching an impressive 10% for the first time[4].
2. Competition with Established Exporters: Turkmenistan’s growth has intensified competition in the Russian market, particularly with other significant exporters like Uzbekistan. Turkmenistan nearly caught up with Uzbekistan in export volume, threatening Uzbekistan’s market position[4].
3. Diversification of Supply: Increasing Turkmen exports has diversified Russia’s tomato import sources. Turkmenistan has surpassed countries like China, Armenia, Kazakhstan, Iran, and Egypt regarding export volumes to Russia[4].
4. Impact on Overall Import Volume: Despite Turkmenistan’s growth, Russia’s overall import volume of greenhouse tomatoes decreased by 12% to 337,000 tons in the first eight months of 2021. This suggests that Turkmenistan’s increased exports may have partially offset declines from other sources[4].
5. Competitive Advantage: Turkmenistan’s tomato exports benefit from lower energy costs due to the country’s abundant natural gas resources. This gives Turkmen producers a competitive edge in production costs, which is especially important during high energy prices[4].
6. Potential for Further Growth: Given Turkmenistan’s competitive advantages and growth trajectory, experts anticipate it could overtake Uzbekistan in greenhouse tomato exports to Russia. This potential shift could further reshape the Russian tomato import market[4].
7. Recent Developments: The trend has continued into 2024, with Turkmenistan exporting about 2,000 tons of fresh tomatoes to the Moscow market since the beginning of the year, indicating sustained growth in this trade relationship[5].

These impacts demonstrate that Turkmenistan has become a significant player in the Russian tomato market, altering competitive dynamics and potentially influencing prices and availability for Russian consumers.

Citations:
[1] https://www.fruitnet.com/eurofruit/turkmen-tomatoes-vie-for-russia/186601.article
[2] https://www.hortidaily.com/article/9615890/turkmenistan-tomatoes-are-gaining-ground-in-foreign-markets/
[3] https://orient.tm/en/post/47865/turkmen-entrepreneur-exports-100-tons-tomatoes-russia
[4] https://east-fruit.com/en/news/turkmenistan-doubled-greenhouse-tomato-exports-to-russia-and-is-catching-up-with-uzbekistan/
[5] https://en.trend.az/casia/turkmenistan/3847980.html