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Armenia Ai en
Armenia Ai en
Trends of Agro-industry
ARMENIA
Key Economic Indicators GDP, US$ billion Manufacturing VA, % of GDP Agriculture VA, % of GDP Employment in Agric., % of total Gross Fixed Capital F., % of GDP FDI net inflows, % of GDP R&D, % of GDP Merchandise Trade, % of GDP Merchandise Exports, US$ billion Merchandise Imports, US$ billion Global Merchandise Exports rank 2009 8.71 15.7 21.0 45.6 30.8 8.92 0.26 45.9 0.70 3.30 155 Food and Beverages Industry Output, % of manufacturing Value Added, % of manufacturing Enterprises, % of industry Employment, % of manufacturing Investments, % of manufacturing FDI inflows, % of total FDI inflow R&D, % of Output Net Trade, US$ billion Exports, %of merchandise exp Imports, % of merchandise imp Exports annual growth, %
2011
2009 49.7 n/a 34.8 21.8 n/a 3.78 n/a -0.17 13.5 8.17 -45.7
Armenia is a landlocked and lower middle income country with GNI per capita as of US$ 3,100 in 2009 Total number of population is 3.08 million inhabitants, of which 36 percent live in rural area, and the annual population growth is 0.19 percent. Armenia enjoyed a strong economic growth from 2000 to 2007, with average real GDP growth of 24 percent. As a result of the global economic crisis, GDP growth sharply declined to 5.7 percent in 2008 and further to -36.2 in 2009. The economy was, and remains highly resource-dependent in mining sector and agriculture. The agricultural sector is still very important contributing with 21 percent of value added to GDP and employing around 46 percent of the total labour force in 2009. The agricultural productivity is low. Manufacturing industry generated about 16 percent of GDP with a negative annual growth as of -7.4% and employed 7.7 percent of total labor force in 2009 that down by 35 percent to the 2005 level. Armenia is a net importer of food products. With increase in international prices for metals Armenian economy driven by the mining sector began recovering with a positive growth in 2010.
Agro-industry Outlook
The food and beverages industry forms a large part of the economy, generating AMD219.2 billion (US$ 0.58 bln), that represents about 50 percent of total manufacturing output, and employing 18.3 thousand people (or 21.8 percent of manufacturing labor force) in 2009. There are 831 enterprises (or about 35 percent of total number of industrial enterprises) operating, most of which are private small or medium-scale enterprises. The output declined by 6.4 percent in 2009 to the level of 2008 after a steady growth over time. Employment has declined in a number of employees by 25 percent in 2009 to the level of 2005. The F&B sector consumes 24 percent of total electricity use by the industry. Labour productivity is growing over time making twice higher in 2009 to the 2005 level. Important subsectors include alcoholic and as non-alcoholic beverages, preserving fruits and dairy processing. Wine, brandy and cheese production are the largest part of the food processing industry. The potential sectors are dried fruits and fish products using the local resources. Although the country could benefit from the increasing demand in the Western Europe for organic products counting but organic land represents only 0.03% of agricultural land.
F o od S afe t y , C e r t i fi c at i o n & Qu al i t y C on t ro l
Food Safety regulation. Armenia is a member of the Codex Alimentarius Commission and of the International Organisation of Standardization (ISO). Food products are a subject to the Law on Food Safety (2006), the Law On Ensuring Sanitary-Epidemiological Safety of Population (1992), Law on Consumer Protection (2001), Law on Veterinary Medicine, Law On Plant Protection and Quarantine (2009), Law on Trade and Services and Law on Measurements. The Law on Food Safety is ensuring the quality of food at all stages of supply chain, which requires companies to integrate a self-control system based on HACCP system principles between 2011 and 2015. Armenia drafted a programme and an action plan on the development of the food safety system for the period 2009-2013. Besides, laws On Organizing and Conducting Audits (2000), On Compliance Evaluation and On Conformity Assessment and On Registration of Food Establishments were adopted among other legal-normative acts. Certification. Abolished in 2005, Armenia still follows the sanitary and
phytosanitary (SPS) agro-food standards from the GOST system that do not provide optimal food safety and agricultural health protection for the population and agriculture. There are eight Technical Regulations refer to F&B industry.
Trade Performance. Exports of merchandise products accounted for just over 8 percent of Armenias
GDP, and imports made up around 38 percent of GDP with main export commodities as ores, precious stones and steel products, which provide around 65 percent of total export revenue in 2009. Beverages, spirits and vinegar made about 12 percent of total merchandise trade and shared 87 percent in the F&B revenue. Armenia is an import-dependent country in F&B products, except fruit juices and wine products, making a negative trade balance. Processed F&B products accounted 3.3 percent of total merchandise imports and only 0.7 percent of total merchandise exports in 2009 with a sharp decline in both exports of F&B by 46 percent and imports by 21 percent after a steady growth over time. Products proven thus far to have export potential include wine and brandy, fish and crayfish, cheeses, and fresh and dried fruits and vegetables. Brandy is exported mostly to CIS countries. Latest trends are to develop export-oriented food products starting with dried fruits, cheese and organic products.
Top destinations for F&B products: Russia (73%), Ukraine (7%), United States (6%) and Belarus (4%); Top origins for F&B products: Russia (28%), Ukraine (19%), Brazil (10%) and Iran (3.5%) in 2009