Nevertheless, there are dynamic developments in the production and supply of horticultural products, and the country takes the leading positions in the world in a number of positions. Thus, according to data published on October 14 by the online trade portal Azexport.az, Azerbaijan ranks second in the world’s persimmon export, and at the same time, ranks third in the global supply of hazelnuts, seeking to become the main exporter of seedlings of hazelnut and fruit trees in CIS.
Supplies of fresh fruit and vegetable products to the markets of post-Soviet countries have for many years played the role of a driving force that ensures sustainable growth of production in the dynamically developing agricultural sector of Azerbaijan. This is particularly true of Russia, given that the northern neighbour accounts for about five-sixths of all foreign shipments of Azerbaijani fruit and vegetables. At the same time, tomato exports, which in recent years have accounted for about two-thirds of all foreign shipments of agricultural products, lead the key role in this segment.
With the start of the Russia-Ukraine war, the expert community became concerned about the deterioration of Azerbaijan’s foreign trade prospects, in particular the reduction of fruit and vegetable exports to its main market – the Russian Federation. However, according to the Centre for Analysis of Economic Reforms and Communications, in the segment of seasonal fruit and vegetables in general a significant decline in supplies was avoided, in particular, in January-August 2022, the export of tomatoes amounted to $134.2 million with an increase of 4.7% against the same period last year. In the first half of the year, there was a 35.6% reduction in shipments of apples (in tonnes), but in monetary terms, due to higher prices, there was still an 8% increase. Moreover, the main apple crop is harvested by September and sold in autumn, so at the end of this year, this imbalance in the Russian direction will probably be overcome. There is also no doubt that the anti-Russian sanctions regime has significantly complicated trade relations with the EU countries, including Poland, which until recently was the main supplier of apples to Russia.
It is also worth noting that exports of fruit and vegetable products (originally cheap) from South America, Southeast Asia, India, Africa, etc., have become considerably more expensive amid sharply increased transportation, storage and logistics costs back in 2021. Economic sanctions, which are tightened almost every month, a practical ban on servicing Russian vessels in many international ports, and the withdrawal of the world’s leading forwarders from the Russian market have completely depleted the Russian market of fruit and vegetable products in a number of segments. Against this background, the position of suppliers of green products from China, Türkiye, Iran, and the CIS countries, primarily Azerbaijan and Uzbekistan, is improving, because, given the closer delivery distance, fruit and vegetables are often much cheaper.
With regard to our country, we should also note the settlement of the main phytosanitary contradictions between the Food Safety Agency of Azerbaijan (FSA) and “Rosselkhoznadzor”, as well as the noticeable acceleration of the passage of perishable goods through the customs and border crossing points. At the end of last year, the first test train within the Agroexpress project was launched from Azerbaijan to Russia for the transshipment of agricultural products with subsequent loading of wagons with Russian products in the reverse direction. And over time, the development of this trend will also contribute to an increase in the supply of agrarian products. “The volume of Azerbaijani fruit and vegetable supplies to the Russian market is steadily increasing, and our republic is among the top 10 exporters of agricultural products to Russia,” Deputy Prime Minister of Azerbaijan Shahin Mustafayev notes.
The availability of stable export demand for fruit is indirectly confirmed by agricultural production figures: in 2021, fruit and berry production rose by 9.3%. This positive trend was boosted in January-August 2022: the country produced 479,300 tons of fruit and berries – an 11% increase, as well as 73,600 tons of grapes – a 2.4% increase.
Nevertheless, the Azerbaijani government is aware that excessive dependence on a limited number of markets (primarily the Russian Federation) for the supply of agricultural products is fraught with significant risks. For this reason, the country has been implementing large-scale reforms in recent years to geographically diversify its agricultural and food exports to Europe, China, the Middle East, and Africa. Azerbaijan’s trade and wine houses opened several years ago in Poland and Latvia have already gained the status of hubs for re-export to European markets of certain types of fresh fruit, as well as processed products from them – grape wine and brandy, juices, jams, fruit preserves, nuts, pomegranate sauce, etc. For the last two years, tangible steps have been taken by trade missions, the Ministry of Economy, and the Azerbaijan Export and Investment Promotion Foundation (AZPROMO) to increase the supply of fruits and processed products under the brand “Made in Azerbaijan” to markets in southern Europe – in particular Hungary, Serbia, Croatia. China is seen as a promising market for Azerbaijani food, wine, and brandy, as it has the largest number of trade missions. AZPROMO has also promoted its products in Egypt, Jordan, Iraq, the UAE, Oman, Bahrain, Qatar, and other Gulf states.
It is noteworthy that for some items the export of Azerbaijani “green” products even demonstrates notable achievements in the global market.
In particular, according to the electronic trading portal Azexport.az, by the end of 2021 Azerbaijan became the world’s second-largest persimmon exporter. “Last year Azerbaijan exported persimmon worth $125.9 million and surpassed China in terms of deliveries, becoming the second exporter in the world after Spain,” Azexport.az head Aikhan Gadashov said the day before. According to him, if in 2020 Azerbaijan’s share in the world market of persimmons was 13%, last year it increased to 20%. According to the State Customs Committee of Azerbaijan, 174.158 thousand tons of persimmons were exported from the country last year, which is 38.5% more than a year earlier.
Recently, the Association of Producers and Exporters of persimmon reported that along with the main markets – Russia and Ukraine, the supply of this fruit is gradually expanding to non-CIS countries. Thus, according to the Chairman of the Association Gadir Yusifov, regular negotiations are held with Arab and Asian countries, and persimmon deliveries will soon be established to Saudi Arabia, Turkmenistan, Kazakhstan, and the Russian Urals. The Turkish market is also seen very promising as well, with which Azerbaijan has an agreement on preferential trade: persimmon is also on the list of 15 agrarian products, the export of which is exempted from paying VAT.
An increase in hazelnuts, almonds, and other types of nuts is seen as very promising for the expansion of agrarian export. “In recent years, Azerbaijan has been intensively developing hazelnut growing, and the area of hazelnut orchards has more than doubled. And today Azerbaijan is the world’s third largest exporter of hazelnuts”, President Ilham Aliyev said recently. As the head of state noted, the priority task for the foreseeable future is to increase the production of almonds and olives, in areas with significant export potential, for which it is planned to plant new orchards in the Absheron peninsula and other regions of the country. This work is already underway, and in the first phase in 2017-2019 different varieties of almond trees were planted in the villages of Gala and Bilgah in the Absheron district on a total area of 427 hectares, and an almond processing plant was built.
Given the high export demand for Azerbaijani hazelnuts, this trend will develop in other regions of the country. Export of almonds to Italy, Germany, Austria, Switzerland, France, Poland, Türkiye, and a number of other countries of the world is possible in the future. In this regard, several Azerbaijani companies have already applied to the relevant bodies on the establishment of hazelnut, as well as walnut and chestnut plantations in territories of Azerbaijan liberated from the occupation – as is well known, the most favorable conditions for the above-mentioned cultures are in the foothill areas of Eastern Zangazur – Zangilan and Kalbajar.
It is notable, that during the last few years Azerbaijan acts not only as an exporter of fruit and nuts. A number of local companies (including a pilot agro-park in Yevlakh) started to deliver seedlings of highly productive fruit trees – sweet cherry, nectarine, persimmon, pomegranate, hazelnut, and almond abroad. Seedlings were exported to Kyrgyzstan, Russia, and Georgia. A separate agreement has been signed with Uzbekistan, under which, in addition to supplying seedlings of high-yielding varieties of hazelnut, Azerbaijan will provide training to Uzbek specialists in advanced methods of hazelnut cultivation.