Germany & Azerbaijan: New food partners for a bright future
Published on 23/02/2017
The relationship between Azerbaijan and Germany has been growing steadily over the past decade and trade levels continue to rise. Azerbaijan’s Foreign Minister, Elmar Mammadyarov, has stated nation is Germany’s main trading partner in the South Caucasus, with 75% of all German trade in the region stemming from Azerbaijan.
Trade between the two states amounts to billions each year. 2015, for example, saw trade turnover reach $1.67 billion, meaning Germany account for 9.69% of all Azerbaijani foreign trade. The vast majority of this takes the form of mineral imports, as Azerbaijan’s economy is dominated by energy production and export.
But what about food trade? Azerbaijan is stepping up production levels in a number of key food commodities, so Germany could see larger volumes of Azerbaijani produce hitting consumers in the near future.
German & Azerbaijani food trade
Azerbaijan’s food and beverage imports from Germany take a diversified approach. $58.2 million worth of foodstuffs were imported in 2014, including $8.04 million worth of liquor, $2.95 million of chocolate, $1.49 million worth of baked goods, and $1.11 million worth of sausages.
From the above, we can see there is scope for expansion in a number of food and beverage areas for German producers in Azerbaijan. Products in high demand amongst Azerbaijani consumers include plenty of commodities Germany already produces in bulk.
German firms can find expansion opportunities in the following product categories, which dominate Azerbaijan’s food imports sector (based on Massachusetts Institute of Technology import data on Azerbaijan & historical trends):
• Chocolate – Imports worth $104 million annually
• Butter - Imports worth $92.3 million annually
• Baked goods – Imports worth $85.6 million annually
• Flavoured waters – Imports worth $61 million annually
• Liquor – Imports worth $45.6 million annually
• Tea – Imports worth $45.1 million annually
• Poultry meat – Imports worth $35.9 million annually
• Cheese – Imports worth $35.2 million annually
• Potatoes – Imports worth $21.7 million annually
• Frozen bovine meat – Imports worth 20.4 million annually
Reports from Azerbaijan’s State Customs Committee have shown food imports art on the increase. Across January-July 2016, imports rose 16.43%. Given the monetary value of these, some $7.01 billion, it goes to show Azerbaijan’s 9.41 million consumers are hungry for overseas foodstuffs.
Azerbaijan’s desire for international food and beverage related products does not end at purely edible items. Knowledge and expertise, alongside machinery and equipment, is very much in demand.
Azerbaijan’s food industry applies German experience in agriculture
Outside of pure merchandise exports lies further opportunities for German businesses throughout Azerbaijan. At a May 2016 meeting of Azerbaijan’s Parliamentary Committee on Agricultural Policy, a proposal to adopt German techniques and methodology across the agricultural sector was discussed.
Azerbaijan’s Agricultural Ministry is proposing the formation and development of country wide agricultural cooperatives. Essentially, these cooperatives would be conglomerates of volunteer manufacturers coming together to form large-scale agricultural enterprises with hopes of kick-starting a production revolution.
Being based on German experiences, using tried and tested methods, this proposal could drastically change the shape of Azerbaijan’s agriculture sector. Crucially, however, it will require large volumes of farming machinery, equipment and facilities to truly succeed – affording German manufacturers the space to supply world class products to Azerbaijan in order to boost the Central Asian state’s agricultural output.
Food processing in Azerbaijan needs foreign investment
It is not just agriculture that requires international cooperation and investment to improve and expand in Azerbaijan –
it is the entire food processing industry. From viniculture to meat production, to fisheries and canned food and beyond, Azerbaijan is looking to upgrade and outfit production facilities nationwide.
This means foreign investment. In a similar fashion to agriculture development, German companies can aid this by providing Azerbaijani producers with the equipment they need to true excel in terms of food production.
German firms: Make the right connections at WorldFood Azerbaijan
Interested in supplying new food products, packaging solutions or machinery related to Azerbaijan’s food and beverage industry? You need to attend WorldFood Azerbaijan. For over 20 years, WorldFood Azerbaijan has been connecting Azerbaijan’s biggest food and drink players with foreign businesses to highly mutual benefit.
Registration for exhibitors is now open so
click here to learn more about WorldFood Azerbaijan today and register today.
Image: © Sabrina Stelger via Flickr