Georgia’s Potato Exports Slump as Russia Steps Back – Market Rebalances

Georgia’s potato export boom of 2025 has swung into a sharp correction in early 2026, as Russian demand collapsed on the back of a large domestic crop, slashing Georgian shipments and revenues. The market impact is cushioned by diversification into Azerbaijan but leaves Georgia exposed to a narrower buyer base and softer export margins. Georgia’s potato sector enters mid‑2026 in a markedly weaker external position: export volumes in the first half of the year have dropped more than 80% year on year, led by a near‑93% plunge in shipments to Russia. While 2025’s record sales were never likely to be repeated, the speed of the adjustment underlines how dependent Georgia had become on one buyer. Azerbaijan has emerged as the main outlet, but the loss of several smaller CIS destinations narrows options just as domestic output trends slightly lower. Processed markets such as starch show stable-to-soft prices, indicating comfortable regional supply.

Prices

Export earnings from potatoes dropped to USD 4.88 million in January–June 2026 from about USD 26.5 million a year earlier, implying a steep erosion in average realized export values as volumes fell and sales shifted toward lower‑priced destinations. Russia’s import pull has weakened after a large 2025 harvest, easing regional tightness and capping upside for Georgian growers.

In the processed segment, spot offers for potato starch in Poland currently sit around EUR 0.63/kg FCA Łódź, slightly below mid‑July levels near EUR 0.66/kg, confirming a mildly bearish tone and comfortable raw material availability in the broader European market.

Supply & Demand

Georgia exported 18,414 tonnes of potatoes in the first half of 2026, down 81.5% year on year. The contraction is heavily concentrated in trade with Russia: shipments to this market collapsed from 50,347 tonnes in January–June 2025 to just 3,422 tonnes this year, as Russia’s own large crop reduced import needs in early 2026. This triggered not only lower volumes but also a sharp drop in export revenues from Russia, from USD 20.5 million to USD 1.4 million.

Azerbaijan has become Georgia’s largest potato outlet, absorbing 11,777 tonnes worth USD 2.2 million in the first half of 2026. Russia now ranks second, followed by Belarus with 2,126 tonnes valued at USD 0.94 million. Sales to Armenia remained modest at around USD 0.20 million, while Qatar imported only 21 tonnes worth USD 9,500. Several minor markets, including Kazakhstan, Moldova, Turkmenistan and Uzbekistan, which purchased Georgian potatoes in early 2025, were completely absent in the same period of 2026, underscoring a meaningful loss of breadth in export demand.

On the supply side, domestic production is trending lower but not collapsing. Georgia harvested an estimated 207,900 tonnes of potatoes in 2025, down 6.1% year on year. The current export downturn therefore reflects primarily weaker foreign demand—especially from Russia—rather than a structural supply shock in Georgia. Russia’s strong 2025 crop and reduced reliance on imports remain the decisive drivers in the short term.

Fundamentals & Structural Risks

The record export performance of 2025 was largely an outlier, powered by an exceptional surge in shipments to Russia and creating a very high comparison base. The 2026 data represent a correction from this unusually strong season rather than definitive proof of decline in Georgia’s potato sector. However, the episode has exposed a structural vulnerability: heavy reliance on a small number of buyers, with Russia at the core.

The disappearance of multiple smaller CIS markets in early 2026 is a clear warning signal. While these destinations may have been relatively small in volume terms, their collective absence leaves Georgia more dependent on Azerbaijan and Russia, increasing exposure to policy, currency and weather‑related shocks in just a few partner countries. If Russian production remains high—helped by large planted areas despite recent planting challenges—and logistical disruptions inside Russia keep more potatoes on the domestic market, import demand for Georgian product could stay subdued.

Weather & Short‑Term Outlook

For the remainder of 2026, the key uncertainty lies in Russia’s and neighboring countries’ harvest outcomes and storage quality. A repeat of last year’s large Russian crop, even with some localized weather or logistics issues, would continue to suppress Russian import demand and weigh on Georgian export prospects. In that scenario, competition in Azerbaijan and Belarus would likely intensify as other regional suppliers also seek outlets.

Given the mild downtrend in regional starch prices and Georgia’s only modest production decline, the balance of risks for fresh export prices in EUR terms is currently tilted slightly to the downside, particularly for lower‑grade ware potatoes. Upside for Georgian growers would likely require either weather‑related losses in major producing regions or a renewed pickup in Russian buying later in the marketing year.

Trading Outlook

• Growers/exporters: Prioritize diversification beyond Russia and Azerbaijan, even at thinner initial margins, to rebuild a broader destination portfolio and reduce single‑market dependency. Avoid over‑committing volume to spot Russian demand until clearer signals of sustained import recovery emerge.
• Buyers in Azerbaijan/Belarus: Use current buyer’s‑market conditions to negotiate flexible contract structures, but consider forward coverage for quality lots in case weather or logistics tighten regional supply later in the season.
• Processors (starch/chips): With EUR‑denominated starch prices easing and raw potato availability comfortable, evaluate extending coverage at current levels while keeping some optionality in case further price softness materializes.

3‑Day Directional Price Indication (EUR)

• Fresh export potatoes, Georgia FOB (implied): Sideways to slightly softer, reflecting weak Russian demand and competitive offers into Azerbaijan.
• Potato starch, Central Europe (FCA Poland): Stable around EUR 0.62–0.63/kg, with a mild downward bias on comfortable supply.