New Logistics Options for Georgian Wine and Nuts

This month, a train from Lianyunyang port in East China’s Jiangsu province arrived in Tbilisi. Performed as a test shipment, the exercise was designed to test how a shipment of non-perishable goods (in this case electronics) could travel through China’s domestic rail network to its border with Kazakhstan at Korgas, through the Kazakhstan rail network to Aktau, cross the Caspian on a ferry to Azerbaijan’s capital Baku, and then travel to Tbilisi.

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The duration of travel for this journey was 15 days, which compares with the current 10-15 days that container freight on trucks taking the same route. It is 25 days shorter than the same route by sea.

From Civil.ge

According to the state-owned Georgian Railway one more container train is scheduled to deliver cargo via Georgia through this Trans-Caspian International Transport Route. The Georgian Railway also said, without specifying figures, that it expects “several thousand” of containers to be shipped via this route in 2016. Georgia hopes that completion of the Baku-Tbilisi-Kars railway in 2016, that will link Azerbaijan with Turkey via Georgia, will increase efficiency of the route.

It is worth noting that this route runs in parallel with China’s planned high-speed rail network routed between Turkey and China via Iran.

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As can be seen, the planned high-speed link bypasses Georgia and the Caspian altogether, with no need for moving carriages onto ferries for a slow trip over the Caspian Sea. It also avoids passing through either Azerbaijani or Armenian territory, which may or may not be linked to regional security issues. Using standard high-speed rail technology, cruising at 200-250 km/hour, a trip from Julfa in northern Iran to China’s Eastern or Southern coastal cities( a journey of 8000 km), could be accomplished in 2-3 days. Likewise, freight from Julfa to New Delhi (around 4000 km) could be accomplished in 1-2 days.

A high-speed spur line from Julfa, through Azerbaijan to Tbilisi and onwards to Poti and Anaklia would make sense, but it is not yet known if that is planned.

The high cost of freight and ponderous speed of transit has been an impediment to Georgian exports of agricultural produce to East Asia and South Asia. Wine and hazelnuts are products that Georgia has certain competitive advantages in producing, and hopefully faster, cheaper freight with better temperature control will improve competitiveness of Georgian exports in those markets

 

 

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World Trade Organization strikes ‘historic’ farming subsidy deal.

For many decades, a critical impediment to developing countries’ agricultural development has been unfair competition from the EU and US, dumping products in local and regional markets supported by taxpayer-funded subsidies. Thankfully, this may change soon;

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“Countries in the World Trade Organization (WTO) have agreed to abolish subsidies on farming exports.

Developed countries agreed to stop the subsidies immediately and developing nations must follow by the end of 2018.

The WTO, which represents 162 countries, called it “the most significant outcome on agriculture” since the body’s foundation in 1995.

But longstanding talks on other trade barriers were left unresolved at the end of the summit in Kenya.

Removing agriculture export subsidies is intended to help farmers in poorer countries to compete more fairly.

“The decision you have taken today on export competition is truly extraordinary,” WTO chief Roberto Azevedo said at the closing session in Kenyan capital, Nairobi.

The summit of ministers, which finished on Saturday after five days of talks, was the first to be held in Africa. “.

Of relevance to Georgia are imports of milk powder used to make liquid milk, yoghurt and cheese in Georgia.