PRODUCT FOR EXPORT

Intensively developing over the last decade and a half, the agro-industrial complex today provides about 80 per cent of the country's food and takes second place after the energy sector by the volume of export. The achievements of the domestic food industry were clearly demonstrated by the 19th international exhibition WorldFood Azerbaijan-2013 recently held at the Baku Expo Centre. The exhibition was visited by President Ilham Aliyev.

Advertising - the driving force of trade

It is notable that in April this year, experts of the Agriculture Ministry mapped out a strategy for the development of the industry until 2020. One component of this strategy provides for greater use of advertising and the business resource of exhibitions and trade fairs for the promotion of information on the achievements of the domestic food industry, as well as for the use of such sites for business negotiations and investment decisions. It is expected that the holding of trade fairs will enhance competitiveness and help to promote Azerbaijan's agricultural products on the world market more effectively.

Specialists of the Ministry of Economic Development (MED) and its structural division - the Azerbaijan Export and Investment Promotion Foundation (Azpromo) - have been actively working for several years on the formation of similar marketing mechanisms. Specifically, we are talking about the international advertising of Azerbaijan's leading food manufacturers in numerous exhibitions and electronic and print catalogues prepared by Azpromo.

Such activity by the government and relevant ministries in promoting the export potential of Azerbaijani agricultural products is based on quite an obvious calculation. The sector processing agricultural products is recognized as the most developed segment of the non-oil sector of the economy and provides about 80 per cent of the country's food today, and it takes second place after the energy sector in the volume of exports.

Unlike many countries of the world, which considerably reduced the volume of investment in agriculture and processing industry in the post-crisis period, the attractiveness of Azerbaijan's food market for local and foreign investors and for suppliers only increased in this period. In the last few years, more than a third of the 100-150 large and medium-sized enterprises put into operation annually were agro-processing factories, as well as refrigerated warehouses, elevators and other objects of agricultural infrastructure.

Today about 200 large enterprises specializing in the production of meat and milk, fruit and vegetables, alcohol, oils, tea and tobacco are functioning in the country. Thus, the total capacity of canneries, specializing in the processing of fruits and vegetables, makes it possible to annually produce more than 750 million cans of food. Azerbaijan fully satisfies its domestic demand for this product, which is why over 2/3 of manufactured canned products are exported.

Agricultural industry in export performance

As far as export is concerned, today our country exports several hundred types of agricultural products to nearly 85 countries around the world. Due to objective reasons, more than three quarters of food exports are still oriented to post-Soviet states - mainly Russia, Belarus, Ukraine, Georgia and Kazakhstan. In a significantly smaller volume, agricultural products are supplied to Turkey, Iran and the Gulf states. In any case, in recent years, Azerbaijani enterprises have been embracing markets in Europe, Canada, the US and even China, Japan and South Korea more and more actively.

The basis of our country's agricultural exports is fresh fruits and vegetables, canned food, sugar, tea, juices, vegetable and animal oils, alcohol and some crops - mainly cotton, tobacco, hides and skins.

Over the last 7-8 years, the volume of agricultural export has increased by several times: for example, if in 2004 the volume of fresh and processed agricultural products sold on foreign markets was about $ 41 million in terms of money, in pre-crisis 2008, the export in this position increased to $ 450 million. In 2011, agricultural export exceeded $ 650 million and the growth rate remained positive last year and at the beginning of the current year.

In recent years, the agricultural industry in Azerbaijan has seen a new trend - the amount of food for the domestic market, processed and packaged using modern technologies, is increasing. A catalyst for expanding the range of packaged food is the rapid spread in the country of major grocery supermarkets and shopping centres, which have turned into a leading channel of food trade today. The activities of trade giants are aimed at selling packaged products with bar codes. In addition, significant purchases of such products at factories allow supermarkets to keep "cheap prices" or hold campaigns attractive for customers. Accordingly, this factor encourages food industry enterprises to increase production for the domestic market.

According to a study by the international company Euromonitor International, the market of processed and packaged food in Azerbaijan is expected to double by 2017. According to experts of Euromonitor International, rapid urbanization and rising living standards in Azerbaijan, as well as increased consumer interest in packaged organic products labelled "without GMO" also help to increase the production of packaged food at factories. This trend also relies on the significant increase in financial support in the form of private loans and concessional subsidies allocated by state funds in 2011-2012. The latter has enabled many local producers of processed and packaged food not only to maintain high volumes of production, but also to upgrade production capacities.