Things to Know When Exporting Wool to the European Union
Trade in sheep and wool has dropped in Georgia, and Georgian shepherds are looking to EU countries in search of new markets for Georgian sheep products. So, exactly what requirements must farmers meet in order to export Georgian sheep and wool to the European market?
Emzar Bezhitashvili is a shepherd with 20 years of experience behind him, whose profession has been handed down to him by his ancestors. Bezhitashvili owns up to 1,000 sheep and goats. Despite his vast experience, however, he has recently encountered problems selling his goods. “Sheepherding has dwindled” he says, “and I have not had a buyer in four years. I can’t sell mutton or lamb. Four years ago, I had plenty of clients from Iran, Saudi Arabia, Lebanon, and so on. Last year, no clients from these countries contacted us.”
In 2009, the geographic scope of Georgian sheep export included Iran, Azerbaijan, Oman, Jordan, Lebanon, Egypt, Qatar, the United Arab Emirates, and other countries. By some assessments, was one of the cases when the market found the product on its own and Georgian sheep successfully replaced Australian, Ukrainian, and Brazilian exports in Arab countries. Along with its fine taste, the advantages of Georgian mutton include its low price and cheap transport costs from Georgian to the Middle East. Due to the growing demand five years ago, the price of mutton in the local market grew from 60 to 120 GEL, and as a result, Georgian mutton gradually lost its position in the market to other countries.
Chair of the Shepherds Association of Georgia Beka Gonashvili says that the falling demand for Georgian mutton was due to a number of reasons: “The Food Safety Agency failed to fulfill its duties, resulting in the sale of contaminated Georgian mutton in several countries. Consequently, we lost the markets of Iran and Saudi Arabia, and the United Arab Emirates tightened requirements for us. Last year, Iran restored our right to export mutton, but it is very difficult to reclaim our position in the market. Nonetheless, the price is the main reason why we lost the sheep market. Georgian sheep are expensive, a 40 kilogram Armenian sheep costs 80 USD. For this price, it is impossible to buy even a 30 kilogram sheep in Georgia.” Accordingly, if the price of Armenian sheep is two dollars per kilogram dressed weight, then Georgian sheep costs between 3.5 and 4 USD and is therefore uncompetitive.
According to Emzar Bezhitashvili, high pasture taxes and expensive fodder make the price of Georgian mutton even higher: “I do not own a farm or pastures. I rent both. While paying 3 GEL for a hectare of pastures in 2010, now I pay 16 GEL, and I have to have at least 400 hectares to pasture a flock of 1,000! Add to that the farm rent and other expenses, which will make the cost of one sheep at least 140 GEL.”
Today Azerbaijan is the only stable export market for Georgian sheep: “We are in dire straits because, out of twelve export markets, we only have one left. To export our sheep to Azerbaijan, we have to pay official customs duties on the border. As a rule, Azerbaijani clients buy sheep and pay us post-sale, that is, after they sell our products. Many shepherds still have not received money for sheep sold last year, and we are talking about a lot of money here. The clients know that we have no other export market, and we are forced to consent to their enslaving terms. The government must help us locate export markets. We have a free trade agreement with Turkey, but we cannot export sheep or mutton. Shepherds cannot solve this problems, it must be done at the governmental level,” the Chair of the Shepherds Association says.
Georgian shepherds are also demanding improvements in infrastructure. At this point, the main problem is the construction of roadz leading to the pastures. A technical specifications bid was announced as early as 2010, yet this issue remains unsolved. Seasonal sheep migration between winter and summer pastures has a centuries-old history in Georgia, the only country in the world where cattle cover between 200 and 400 kilometers twice a year. The road between the pastures is expected to cover four regions and twenty municipalities. The map, which contains errors, shows that the road will pass through privately owned lands, which triggers frequent conflicts between local residents and shepherds. In addition, prevention of diseases requires the provision of rest areas, with washing equipment and disinfection barriers.
The Georgian Government is studying and developing the export potential of sheepherding: “The sheepherding sector is a very interesting direction that has great export potential, but is in need of development” Minister of Agriculture Otar Danelia pointed out in an interview with www.eugeorgia.info. “Pastures must be arranged, and roads leading to them must be built, and we have already launched a project with this in mind.”
Dropping numbers of tourists hurt wool yarn production
According to shepherds, demand for wool has decreased as well. Emzar Bezhitashvili claims that he has collected up to three tons of wool at home. He sells it for 0.60-0.65 GEL per kilo, but buyers are hard to come by.
Dimitri Arindauli, the head of the Tusheti wool processing plant, says that selling wool and wool yarn has become extremely difficult in the last few years: “Only a few years ago, one kilogram of wool cost 1.30 GEL, but now it is 0.40-0.50 GEL. Tushetian wool is the best material for rugs, tapestry, and felt production. Our plant produces wool yarn which is used to weave different felt goods and socks. This year, our wool yarn sales dropped tremendously. Shop owners say that, in comparison with last year, they had fewer tourists this year, and even those few visitors were not too eager to buy felt and wool products. A few years ago, our wool and wool yarn would be exported to Iran, Turkey, and Azerbaijan, but not anymore because of complicated customs procedures.”
European prospects of Georgian sheep
Chair of the Shepherds Association Beka Gonashvili believes that the EU Association Agreement and DCFTA will allow Georgian sheep products to thrive on EU markets: “Organic farming products are very popular in Europe” he says. “Georgian sheep products are in effect organic products. Our livestock graze on environmentally friendly pastures which are not treated with fertilizers or pesticides. Representatives of the Ukrainian Office of FIBL, a Swiss organic certification company, visited Georgia, to examine the situation on the ground, and pointed out that with will and commitment, it should not be difficult to obtain organic certification for Georgian sheep products.”
According to Beka Gonashvili, wool may also find buyers in Europe, though the issues of shearing, washing, and sorting must be tackled first. Last year, the Shepherds Association commissioned a wool classer from Australia, who attended shearings in Tusheti and Javakheti and issued a recommendation for the Shepherds Association. The Australian expert pointed out that Georgian wool is of good quality, though it is somewhat shorter than the international standard. The expert recommended that shepherds shear their sheep only once a year, not twice as they usually do. Once sheared, the wool must be sorted. One sheep may produce four types of wool, and each has its price and market. “We could start exporting wool today” Gonashvili said, “but we would never sell it because it has not been washed. One kilo of unwashed wool costs 0.60 GEL, which is not even enough to cover transportation costs. Wool washed in the river costs between 4 and 5 GEL. After being washed mechanically, however, the price is even higher.”
“Samples of Tushetian wool were taken to Great Britain, where prospective buyers praised its quality and offered to buy it for 1.5 USD per kilogram. However, it’s not known whether the British Food Standards Agency will allow them to import wool from Georgia, where there are no standards imposed on the quality of wool or sheep products, “Gonashvili says.
So, what must farmers do in order to sell wool in Europe?
Rules and regulations for importing wool as an animal product are set forth in the EU Directives ## 142/2011 and 97/78.
“Obtaining organic certification for Georgian sheep products will be a long and complicated process. On the other hand, importing wool in EU member states has been simplified in recent years, which is reflected in the relevant EU requirements,” says Maka Shubladze (the head of the Legal Department at the National Food Agency). “To import raw wool from a third country, such as Georgia, into the European Union, requires a relevant standard in place. The wool producer or exporting enterprise must be registered with the National Food Agency, which is designed to guarantee that the animals (sheep, in this particular case) do not show signs of contagious diseases. There is another requirement that requires wool producers and exporters 1) to ensure safe and dry packaging for wool, and 2) to send wool directly to the plant that uses it in production, to prevent the spreading of pathogenic agents.
If either of these two requirements is not met, the wool will be classed as a regular animal product, which must be screened for potential agents which could cause harm to animal populations in the country of export. In addition, customs authorities in the host country may take samples and test the wool for dryness. If this requirement is met, then the product will no longer need to obtain veterinary health certification or go through lengthy procedures in order to be listed as an importing country.”Some EU member states, such as Great Britain, may have different requirements, in terms of required documentation.
Information and statistics
According to the National Statistics Office of Georgia, the number of sheep and goats in Georgia reached 85,000 in 2013.
Between 80 and 85 percent of all sheep in Georgia are Tushetian, the most ancient Georgian breed that emerged in the 13-14 centuries as a result of traditional selective breeding. The Tushetian sheep produces coarse-fibered wool and fine meat. The wool is excellent for making rugs and felt products, such as traditional cloaks and hats. The average ram weighs 70-75 kilograms and the ewe 40-45 kilograms. The sheared wool from each sheep amounts to 3.5-4 and 2.5-3 kilograms, respectively.
The Imeretian sheep is reared in Western Georgia, making up 10-15 percent of all sheep in the country. Experts speculate that it originated as a result of the crossbreeding of the Colchis sheep with soft wool and another unspecified breed with coarse-fibered wool. Ewes can give birth from 11 months of age. The Imeretian sheep multiplies fast, usually 2-3 lambs, and sometimes even 4 or 5, per litter. The ewe can deliver two litters per year. The Imeretian sheep is small in size, the largest weighing 50 kilograms. The meat of the Imeretian sheep does not contain much fat.
According to the National Statistics Office of Georgia, a total of 51,600 sheep were killed in epizootic outbreaks.
According to the Shepherds Association of Georgia, 266,000 sheep were exported in 2009, 178,000 in 2010, 155,000 in 2011, and 170,000 in 2012. According to shepherds, the number of exported sheep in 2014 will reach 220,000, from which 70,000 will be Armenian sheep.