Middle East As an Alternative Market for Armenia
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IN PARTNERSHIP WITH Delivered by IFC/World Bank Group in partnership with the UK Government’s Good Governance Fund MIDDLE EAST AS AN ALTERNATIVE MARKET FOR ARMENIA: Greenhouse Crops, Berries, Flowers, Nuts and Processed fruits (dried/frozen) This Report was prepared by the International Center for Agribusiness Research and Education (ICARE) foundation DISCLAIMER This material has been funded by UK aid from the UK government; however, the views expressed do not necessarily reflect the UK government’s official policies.” This report is made possible by the generous support of the IFC. The contents are the responsibility of ICARE and do not necessarily reflect the views of the IFC. ACKNOWLEDGMENT “Middle East as an Alternative Market for Armenia’’ study has been conducted within the scope of the World Bank Group (WBG)/International Finance Corporation (IFC) “Economic Growth” Advisory Project. This three-year (2019-2021) Project is implemented in partnership with the United Kingdom Government’s Good Governance Fund. The study was conducted by International Center for Agribusiness Research and Education (ICARE) foundation during January – May 2020 under the management of Lusine Tadevosyan, Research Director. The following expert team took key part in development of this report: - Hasmik Hovhannisyan, PhD, Technical Lead/Policy expert - Armen Asatryan, PhD, Agricultural expert - Lusine Tadevosyan, Trade expert - David Pipoyan, Sanitary and Phytosanitary expert - Astghik Sahakyan, Senior researcher - Hasmik Hayrapetyan, Senior researcher The project team would like to express its gratitude to the colleagues at IFC, Mr. Arsen Nazaryan, Ms. Gayane Mkrtchyan and Ms. Siranush Iskandaryan, for effective collaboration throughout the project. Furthermore, project team would like to thank Ms. Felicia Pricop, WBG, Agriculture Policy Consultant, Mr. Bekzod Shamsiev, WBG, Senior Agriculture Economist and Mr. Christophe Ravry, IFC, Senior Industry Specialist, for their valuable comments and recommendations on the report. The project team would also like to extend its gratitude to all the stakeholders and organizations that supported project implementation through fruitful discussions and individual meetings, in particular, Mr. Arman Khojoyan, the Deputy Minister of Economy of RA, staff for the relevant departments of the Ministry of Economy of RA, local producers, exporters, associations and non-governmental organizations (NGOs). TABLE OF CONTENT EXECUTIVE SUMMARY .......................................................................................................... 10 1. RESEARCH METHODOLOGY .......................................................................................... 16 2. SUPPLY SIDE: PRODUCTION OF PTPS IN ARMENIA ................................................. 17 2.1. Overview of Armenia’s Agricultural Sector .................................................................... 17 2.1.1. Greenhouse production and exports ...................................................................... 19 2.1.2. Vegetable production and exports ......................................................................... 20 2.1.3. Flowers production and exports ............................................................................. 21 2.1.4. Fruits production and exports ................................................................................ 22 2.1.5. Berries production and exports .............................................................................. 22 2.1.6. Nuts production and exports .................................................................................. 23 2.2. Limitations in Production ............................................................................................... 23 2.2.1. Knowledge and skills ............................................................................................... 23 2.2.2. Access to finance..................................................................................................... 23 2.3. Domestic Supply Chain ................................................................................................... 24 2.4. Armenia Trade Regime with the ME Countries ............................................................. 26 2.5. Keystones of Export Policy of Armenia .......................................................................... 27 2.6. SWOT Analysis of Supply Side ........................................................................................ 28 3. DEMAND SIDE: ANALYSIS OF THE ME MARKETS .................................................... 29 3.1. Overview of the ME Market ........................................................................................... 29 3.2. Production, Consumption and Imports of PTPs in PTCs ................................................ 29 3.2.1. Case of UAE ............................................................................................................. 29 3.2.2. Case of Qatar........................................................................................................... 36 3.2.3. Case of Kuwait ......................................................................................................... 36 3.2.4. Case of Egypt ........................................................................................................... 38 3.2.5. Case of Jordan ......................................................................................................... 39 3.3. Market/Buyers Requirements Towards the Selected Products .................................... 40 3.3.1. Demand structure and channels of distributions of the UAE ................................. 40 3.3.2. Demand structure and channels of distribution of the Qatar ................................ 43 3.3.3. Demand structure of Kuwait ................................................................................... 46 3.3.4. Demand structure of the Egypt .............................................................................. 47 3.3.5. Demand structure of Jordan ................................................................................... 49 3.4. VAT Policy in the PTCs .................................................................................................... 51 3.5. Import Policy of the GCC ................................................................................................ 54 3.5.1. Labelling/marking requirements ............................................................................ 55 3.5.2. Prohibited and restricted imports .......................................................................... 56 3.6. Import Policy of Egypt .................................................................................................... 56 3.7. Import Policy of Jordan .................................................................................................. 58 3.8. SWOT Analysis of Demand Side ..................................................................................... 59 4. DEALING WITH THE ME BUYERS ................................................................................. 61 4.1. The UAE Case .................................................................................................................. 61 4.2. Kuwait Case .................................................................................................................... 62 4.3. Case of Qatar .................................................................................................................. 64 4.4. Egypt Case ...................................................................................................................... 64 4.5. Case of Jordan ................................................................................................................ 65 5. MARKETING PROGRAM .................................................................................................. 66 5.1. Specific for Each Product ................................................................................................ 66 5.2. Packaging ........................................................................................................................ 68 5.3. Transportation ................................................................................................................ 70 5.4. Market Linkages and Positioning ................................................................................... 71 5.4.1. Flowers .................................................................................................................... 71 5.4.2. Fruits and vegetables .............................................................................................. 72 5.4.3. Nuts ......................................................................................................................... 72 5.4.4. Berries ..................................................................................................................... 73 5.5. Pricing and Credit Policy ................................................................................................. 73 6. SUMMARY AND RECOMMENDATION ......................................................................... 74 7. ANNEXES............................................................................................................................. 78 Annex 1. Overview of Economies .............................................................................................. 78 Annex 1.1: Armenia ..............................................................................................................