Required Report - public distribution

**Date:** 3/9/2004

**GAIN Report Number:** AJ4001

AJ4001

**Azerbaijan, Republic of**

**Exporter Guide**

**Annual Report**

**2004**

**Approved by:**

![](media/image1.wmf)James Higgiston, Ag Counselor

AgAnkara

**Prepared by:**

Robert Hanson, Ag Attache and Rauf Mekhtiyev, Khatt Research

**Report Highlights:**

The food industry and service sectors are experiencing expansion and
transformation with the beginning of the construction of the Baku-Ceyhan
pipeline. High-value retail outlets and catering companies are
concentrated in Baku, and there is a surprising variety of products and
services available. Opportunities to introduce new products into this
market continue. GSM-102 and Supplier Credit remain available to enter
this market.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Ankara \[TU1\]

\[AJ\]

**SECTION I: MARKET OVERVIEW**

Azerbaijan is located at the strategic crossroads of the Middle East,
Asia and Europe. Its geographic location and its legacy as a former
Soviet Republic continue to influence its economic and commercial
development. Neighboring countries are Turkey, Russia, Iran, Georgia and
Armenia. Azerbaijan borders the Caspian Sea where oil and gas reserves
are enormous. Azerbaijan is one of the countries where the TRACECA
project (Revival of the Great Silk Road from the Far East to Europe) is
being implemented. Proximity to the Gulf countries is also a positive
aspect for the strategic location of Azerbaijan. The population of
Azerbaijan is just over eight million and its area is 86.6 thousand
square km (about the size of Maine). Despite its small area, Azerbaijan
boasts six agro-climatic zones ranging from temperate to sub-tropical.
Azerbaijan has about 750,000 refugees and internally displaced persons
who place an enormous political and economic burden on the Azeri
government. Despite being energy-rich, GDP per capita in Azerbaijan is
about \$750.

A new government was elected in the fall of 2003, and is expected to
build on the macroeconomic stability achieved by the prior government.
The country maintains a stable external debt policy. The government is
also dedicated to maintain a stable exchange rate and conducts strict
monetary policy to keep inflation stable at about 2 percent. Azerbaijan
has signed 23 Production Sharing Agreements (PSAs) with foreign oil
companies, including BP, Statoil, Exxon, and Unocal, which have made
significant investments in the oil sector. Production of oil from the
large Azeri-Chirag-Guneshli (ACG) field has already started. The
government established a State Oil Fund, a mechanism whereby
energy-related profits will be accumulated, managed and preserved for
future generations. The Fund\'s assets were approximately \$800 at the
end of 2003. By 2005, oil profits are expected to grow exponentially.
While the oil sector is being significantly developed, other sectors
have been severely neglected due to lack of foreign and domestic
investment and other structural constraints. Unemployment rates are
estimated to be as high as 20 percent.

While energy is the largest economic sector, agriculture is the largest
employer in Azerbaijan (about 35 percent of the total population is
employed in this sector). Further agribusiness development, access to
credit and investment in the food-processing sector remain vital for
Azerbaijan to achieve its agricultural potential. Azerbaijan could
become an important regional producer of crops such as cotton, grapes,
tea, tobacco, fruits and nuts. The majority of the former state owned
enterprises are technologically outdated and need substantial investment
of capital. The current contradictions result in a two-speed economy
(oil and non-oil sectors) and create challenges for doing business in
Azerbaijan.

Total agricultural commodity imports for calendar year 2002 were USD 238
million dollars according to State Statistics Committee (SSC), which
constitutes 14.3% of total imports. It is fair to say that the true
volume of food and agricultural trade is significantly higher due to
smuggling and non-declaration of imports. Imports of commodities from
the United States to Azerbaijan according to SSC data are USD 15.3
million (6.4 percent of total food and agricultural imports). Total U.S.
exports to Azerbaijan in 2002 increased by 44.3% in comparison with
2001. In recent years, imported products have included poultry meat,
tobacco, wheat, rice, processed foods and non-fat dry milk. Poultry meat
imports also declined after government efforts to control the number of
importers and establishment of a minimum purchasing price. U.S. trade
figures for poultry trade are somewhat understated as imports are also
trans-shipped via Georgia or Dubai. Azerbaijan remains import-dependent
for wheat, meat, edible oils, feedstuffs, dairy products and sugar.

The following is a summary of the advantages and challenges facing U.S.
Exporters in Azerbaijan.

  ----------------------------------- -----------------------------------
  ***ADVANTAGES***                    ***CHALLENGES***

  Azerbaijan plays an important role  The current economic & legal
  in the trans-Caucasus region as the environment presents challenges for
  most developed country. (Relative   traders and businessmen.
  to Georgia and Armenia).            

  Future projection of economic       Azerbaijan has untapped production
  growth is very promising.           capacity and can be self sufficient
                                      in many food items.

  U.S. products have a good, strong   Many U.S. products are too
  image and U.S. tastes are welcomed  expensive for the average Azeri
  by the younger generation of        consumer.
  consumers.                          

  Azeri consumers are used to         Transport costs for nearby
  imported food and agricultural      suppliers are much lower than for
  products.                           U.S. exporters. Due to proximity,
                                      Azeris are used to Turkish and
                                      Russian products.

  Current production capacity is at   Many U.S. products lack promotion,
  very low levels, and a lack of      a necessary component of successful
  value-added processing provides     marketing in Azerbaijan. First-time
  opportunities for U.S. exporters.   entry into the market can be
                                      daunting.

  Potential importers show interest   Many U.S. exporters are risk
  in marketing American food and      adverse when it comes to entering
  agricultural products in the        new markets.
  Azerbaijan market.                  
  ----------------------------------- -----------------------------------

####### SECTION II: EXPORTER BUSINESS TIPS

######## Local business considerations

Azerbaijan's retail food sector is in a period of transition, moving
from state-owned to individually owned small and large outlets. Doing
business in Azerbaijan is similar to doing business in other former
Soviet Union countries; there are opportunities, some challenges and
local contacts are necessary for success. Enforcement of the guidelines
and regulations presented below may vary greatly. Suppliers should
always confirm with the importer that documentation requirements are met
before products are exported.

######## General Consumer Tastes, Preferences and Food Safety Issues

The Azeri consumer prefers food that is prepared at home. Azerbaijan is
self-sufficient in many fresh agricultural products and the consumer is
accustomed to fresh products. Azeris have one of the world's highest
consumption rates for bread and high consumption rates for fresh fruits
and vegetables. Meat and fish consumption depends on household income,
and pulses are the primary protein source for many people. Meat products
are relatively expensive compared to other foods.

######## Food Standards and Regulations

Note: This section provides an overview. Please refer to FAS report
AJ2005 and AJ4002 FAIRS Country Report for more detailed information on
the topics below.

Azerbaijan is a member of FAO, but has not joined Codex Alimentarius.
Imports are still regulated by GOST (Government Standards of former the
Soviet Union), and regulations are occasionally updated. Azerbaijan has
signed an agreement with other CIS countries to adopt common standards
although this is not yet universally applied.

####### Labels

Azeri legislation imposes special rules on labeling of food and
agricultural products. The labels must be in Azeri. English labels are
also acceptable only if the information in Azeri is also provided. The
goods may come in its original packing, but a sticker with the necessary
information may be attached to the original packing before marketing.
American exporters should be cautious to apply this strategy because the
consumers may think that the product has been smuggled or is simply
expired. Details like these should be discussed with the importer.

Exporter must have the following information on the label:

\- Name and brand of the product

\- Name and address of producing company

\- Country of origin

\- Expiration date/shelf life

\- Nutrition and caloric values

\- Net weight (grams or kilos)

\- Usage instructions

\- Name and type of packing material

\- Storage instructions

\- Licensing and certification information, etc.

\- Special warnings, if applicable

If the product has a shelf life of less than three months, it must
include the day, month, and year of expiration. If the shelf life is
more than three months but less than eighteen, the month and year are
required. The products with a shelf life of more than three years are
not allowed for sale in Azerbaijan. Fruits must have the labels on their
containers. Another regulation requires that labels for fruit "juices"
specifies whether the product contains fruit juice (90-100%
concentration), nectar (25-50% concentration), or fruit drinks (up to
10% concentration).

Statements like "diabetic", "ecologically clean/safe" and any other
types of health claims are not applicable, unless there is a permission
from executive power authorities of Azerbaijan (including Ministry of
Health). If these rules are not obeyed, the importer or exporter will be
penalized for unsound competition according to the laws of the Republic
of Azerbaijan.

Food and agricultural products, which have been modified or processed
with use of chemical and biologic substances, should have relevant
information about it on the label.

######## Packaging

American exporters should consider exporting bulk products to
Azerbaijan, and packaging them there, (if necessary), to achieve great
flexibility in accessing the market and to take advantage of relatively
lower labor and packaging costs. Details should be discussed with the
importer.

######## Trademarks

Trademarks are registered by Standardization, Metrology and Patents
Government Agency, which was established on 27 December 2001 and
replaced the Licensing and Patents Department, at the State Science and
Technology Committee. To register a trademark, the applicant must submit
12 samples of the product logo and complete a number of forms. The
registration is generally reported to take 10 months and costs starting
from \$70. The Azerbaijan Standardization, Metrology and Patents
Government Agency is member of World Intellectual Property Organization.

######## Import Process

In order to import any foods an importer must first submit a written
application to the Ministry of Agriculture (MOA). Attached to the
application letter must be the following documents:

1\. A completed import permit form, obtainable from MOA.

2\. Certificate of Origin (to avoid double taxation). In case of absence
of CO the importer will have to pay retail VAT in addition to import VAT
(retail VAT will not be reimbursed to the importer). The Certificate of
Origin should be obtained from the country of origin.

3\. Certificate of Quality (from the appropriate authority in the
country of origin) must be provided by the exporter and will be
confirmed upon entry.

4\. Contract (either purchase or consignment) and Tax Identification
Number.

5\. The importer's company charter from the Ministry of Justice.

6\. The importer's company charter from the State Statistics Committee.

7\. Bank information.

Normally, all imports must be registered within the Ministry of Economic
Development where the importer has to provide his contract with the
supplier, information about the transaction's financing, and a bill
confirming the price on the invoice.

# Customs Process

For customs clearance, the importer is required to submit the following
information in addition to normal import documents such as bill of
lading, etc.:

1\. Import license from the Ministry of Agriculture

2\. Certificate of Origin

3\. Certificate of Quality

4\. Veterinary Certificate for animal products from the country of
origin

5\. Phyto-sanitary Certificate for plant products from the country of
origin

6\. Analysis report from the exporter company, containing information on
physical, chemical, microbiological and heavy metal content under the
exporting company letterhead or relevant government authorities and a
phyto-sanitary certificate.

After the Customs Authorities receive the required documentation, they
will examine the product for quality compliance. The cargo is
transported to a warehouse where representatives of the Customs Control
and Ministry of Agriculture Veterinary or Sanitary-hygiene service take
samples of the products for laboratory analysis. The procedure is done
at the importer's expense. Previously, the representative of
Azerdovletstandart (Azeri Government Standards) also examined the
product for compliance with local standards and issued the Certificate
of Confirmation to the importer. Since Azerdovletstandart is temporarily
closed, the procedure has been suspended.

Azerbaijan has adopted the International Veterinary Codex, which is
regulated by International Epizootic Bureau (OIE), located in Paris. Two
documents are required by State Veterinary Committee to import animal
products: Veterinary Certificate (both local and from the country of
origin) and Veterinary Affirmation (which indicates that the products
have been produced in favorable and not dangerous environment.
Azerbaijan has a series of protocols (veterinary agreements) with
foreign countries on compliance of products exported to Azerbaijan with
Azeri requirements. In addition, there is an agreement between the
Governments of Azerbaijan and the United States on imports of poultry
products. (Note: In early 2004 poultry imports from the US were banned
due to the discovery of low pathogen avian influenza in Delaware.)
Animal products do need a Certificate of Quality from the country of
origin, which must be confirmed by State Veterinary Committee of
Azerbaijan Republic. Certificate of Quality is a necessary component for
exporting food and agricultural products and usually contains
information on different product parameters like calories, protein
content, moisture etc.

# SECTION III: MARKET SECTOR STRUCTURE AND TRENDS

Azerbaijan has fertile land and a uniquely diverse climate. It is
largely self-sufficient in basic foodstuffs but it is dependent on
imports for grain, poultry, meat and many processed foodstuffs. Though
Azerbaijan\'s economy is developing, small businesses still face
significant challenges, many small retailers buy goods on consignment
and in very small quantities. An increasing number of large outlets
(supermarkets) provide more opportunities for U.S. exporters in
Azerbaijan. Also the HRI food service sector \-- especially the catering
sector serving oil and gas workers \-- will provide good opportunities.
These sectors, however, are at the initial stages of development and
will need time to mature.

# Retail Food Sector

Azerbaijan has about 2,500-3,000 retail outlets, 250-300 of which are
supermarkets and mini-markets. (See Retail Sector Report, AJ2003) The
store types include kiosks, corner stores, convenience stores,
mini-markets, supermarkets and wholesale stores that offer goods both in
wholesale and retail quantities. These stores sell a variety of products
including food products. Although food shops and stores are becoming
more familiar, most Azeris prefer to purchase foods at traditional
bazaars that offer low prices, but little convenience. Currently food
retailing is transforming into new forms, which still reflect national
buying patterns -- bazaars are not disappearing, but becoming more
modern and provide more convenience to the customers. These processes
mostly take place in the capital city of Baku. Other cities are lagging
behind and despite their size; larger supermarket chains still have not
opened affiliated stores outside the capital. Other cities include Ganja
with a population of 300,000 and Sumgait with a population of about
255,000.

Though some larger supermarkets have recently established themselves in
Baku, they still account for only five percent of total retail food
sales. Most were established in anticipation of an economic oil boom,
which has not yet materialized. The biggest supermarket chain is
Ramstore (Turkish). Sixty percent of the goods they sell are locally
produced, and the rest are imported from Turkey. Other supermarkets
specialize in different products. For example, one sells mostly food
products from Russia and Azerbaijan, and one mostly German products.
Citimart, serving the expat community, handles Indian, U.S., and
European products. With relatively low sales volumes, the supermarkets'
core activity now is providing wholesale services to smaller shops,
mostly on a consignment basis. This can be challenging, as local shop
owners are not the most reliable, and may not comply with the terms of
sale. A few supermarket/distributors are planning to launch e-service
facilities for their customers.

The greatest competition the supermarkets face is not from other
supermarkets, but from smaller stores that import the same or similar
items. With lower operating expenses, these stores are able to price
their products considerably cheaper than supermarkets. They are also
disbursed throughout the city and located closer to the consumer's
residence which makes them much more accessible. In general,
supermarkets are interested in marketing U.S. products, but relatively
high costs, transport problems, and lack of familiarity with product
lines are limiting factors. U.S. exporters are best advised to sell
through intermediaries such as distributors (wholesalers) and agents.

# 

# 

# 

# Food Processing

A wide variety of crops are grown in Azerbaijan including fruits
(apples, cherries grapes, olives, lemons, persimmons, melon,
raspberries, strawberries, currants, plums, peaches, pears, and
pomegranates), vegetables (tomatoes, potatoes, carrots, beets, cabbage
cucumbers and onions), grains (wheat, maize and barley), tea and various
types of high quality exportable nuts. However, due to the lack of a
functioning processing and storage industry, a large amount of fruits
and vegetables spoil. There are 43 canning factories in Azerbaijan
producing primarily tomato paste, natural fruit juices and apple
concentrates. Most are idle, technologically outdated, and in urgent
need of working capital and investment. New joint ventures are appearing
in the Food Processing Sector. \"Nabran\" food processing plant, which
produces fruit juices under the brand name SAF, exports some of its
products to markets as far away as California. \"Nabran\" is an
exception, since most of other fruit and vegetable processing companies
sell their produce at open-air markets.

There are several dairy-processing companies equipped with new European
equipment with substantial production capacity. However, due to low
purchasing power, these plants operate well below their full capacity.

Fish processing also has a promising future in Azerbaijan. A major fish
processing company in the Azeri market is the Caspian Fishing Company
which processes caviar, filleted, dried and smoked sturgeon, fish oil,
and fishmeal used for animal feed. The company can process 300 tons of
fish per day.

Value-added processing has potential, however the investment climate
must improve to attract adequate capital. In the meantime, imported
processed foods are most common.

+-------------------------+-----------------+------------+------------+
| **Production and Value  |                 |            |            |
| of food products,       |                 |            |            |
| alcoholic and           |                 |            |            |
| non-alcoholic           |                 |            |            |
| beverages, and tobacco  |                 |            |            |
| products in 2002.**     |                 |            |            |
+-------------------------+-----------------+------------+------------+
| **Product Name**        | **Units**       | **Volume** | **Value**  |
|                         |                 |            |            |
|                         |                 |            | **(mln.    |
|                         |                 |            | man.)**    |
+-------------------------+-----------------+------------+------------+
| Meat (beef, mutton,     | '000 ton        | 100.7      | 783203.2   |
| pork and products) \*   |                 |            |            |
+-------------------------+-----------------+------------+------------+
| Poultry \*              | '000 ton        | 20.1       | 201380.0   |
+-------------------------+-----------------+------------+------------+
| Processed meat products | ton             | 6.0        | 21.6       |
+-------------------------+-----------------+------------+------------+
| Sausages \*             | ton             | 856.9      | 5966.3     |
+-------------------------+-----------------+------------+------------+
| Milk \*                 | '000 decaliter  | 65011.4    | 1055819.5  |
+-------------------------+-----------------+------------+------------+
| Sour cream \*           | '000 decaliter  | 208.6      | 14173.1    |
+-------------------------+-----------------+------------+------------+
| Butter \*               | ton             | 13997.9    | 139613.8   |
+-------------------------+-----------------+------------+------------+
| Cheese and cottage      | ton             | 32411.4    | 78918.2    |
| cheese \*               |                 |            |            |
+-------------------------+-----------------+------------+------------+
| Edible Fish products    | ton             | 2211.4     | 6716.6     |
| (including canned fish) |                 |            |            |
+-------------------------+-----------------+------------+------------+
| Non Alcoholic Beverages | '000 decaliter  | 4629.0     | 60087.7    |
+-------------------------+-----------------+------------+------------+
| Vodka                   | '000 decaliter  | 424.9      | 21103.9    |
+-------------------------+-----------------+------------+------------+
| Cognac (Brandy)         | '000 decaliter  | 140.5      | 2633.8     |
+-------------------------+-----------------+------------+------------+
| Champagne               | '000 decaliter  | 153.4      | 4792.8     |
+-------------------------+-----------------+------------+------------+
| Wine (grape)            | '000 decaliter  | 571.9      | 6509.3     |
+-------------------------+-----------------+------------+------------+
| Beer (Malt)             | '000 decaliter  | 1251.4     | 29691.5    |
+-------------------------+-----------------+------------+------------+
| Tobacco (Fermented)     | ton             | 4030.2     | 8229.6     |
+-------------------------+-----------------+------------+------------+
| Cigarettes              | mln. units      | 6296.0     | 136075.3   |
+-------------------------+-----------------+------------+------------+

***\***Including Household Production*

**Number of food processing enterprises:**

  ----------------- ----------------- ----------------- -----------------
  **Total**         **Including**                       

                    **Local**         **Foreign**       **Joint
                                                        ventures**

  671               613               24                34
  ----------------- ----------------- ----------------- -----------------

######## HRI Food Service

The total HRI Food Service Sector turnover is about USD 25 million.
Total number of the HRI outlets is about 3,875 out of which 1,450 are
located in Baku, the capital of Azerbaijan.

The changing economy in Azerbaijan has brought emergence of three niche
sectors - institutional food service (catering business), fast food
outlets, and celebration (party) houses. All of these sectors have
boomed in the past six years. The development of catering business is
closely related with the development of the Oil & Gas sector. Foreign
catering companies operate at 20% of their capacity, while local
caterers at 40-50%. To purchase foodstuffs they work with local
importers and producers, and sometimes import directly from Dubai and
countries of origin.

The fast food sector has also experienced rapid growth. While some
international fast food chains have opened in Azerbaijan (McDonald\'s
(2) and American Fast Food) the majority of fast food chains are
comprised of individual outlets offering mostly Azeri, Turkish and
Georgian cuisine. The international chain Baskin Robbins closed due to
lack of demand. A contributing factor was the price of ice cream that
was relatively high for local consumers. A new type of fast food outlets
that has successfully developed is the cafeteria-style bakery, which
offers snacks, and drinks to consumers. These outlets are gaining
popularity and new branches of chains appear in the market.

Celebration Houses are a relatively new concept in Azerbaijan.
Celebration houses offer opportunities to make wedding, birthday and
other parties for reasonable prices. This sub-sector has taken large
market share from local restaurants and hotels that used to offer the
same services. The average price per person is about USD 5 to USD 30
depending on the purchasing power of the customers.

Hotel restaurants and ethnic restaurants fill an important niche in the
capital city of Baku. These restaurants offer high-quality and diverse
cuisine at a price. Examples of ethnic restaurants available include
Japanese (sushi), Continental, Mexican, Chinese, Indian, Thai, Italian,
French and Russian. All of these restaurants rely on imports for their
special ingredients.

Most of the HRI Food Service Sub-sector purchases foodstuffs directly
from local producers, or at bazaars, also they buy from importers and
wholesalers. HRI Food Service Sector also makes direct imports (from
Dubai and other countries of origin). For more information on the HRI
sector, see report AJ4003.

**SECTION IV: BEST HIGH VALUE PRODUCT PROSPECTS**

**Rice**

**Beef and other meat products**

**Butter**

**Vegetable oils including corn oil**

**Poultry**

**Breakfast Cereals**

**Margarine**

**Pineapples**

**Avocado**

**Mango**

**Coffee substitutes containing caffeine**

**Milk**

**Ground nuts**

**Protein meal/feed grains**

**Wheat**

**Sausage products**

**Sugar**

**Chocolate and other products containing cocoa**

####### SECTION V: KEY CONTACTS AND FURTHER INFORMATION

Foreign Agricultural Service

Embassy of the United States: Ankara, Turkey

110 Ataturk Bulvari

Tel: (+90-312) 455-5555 x2406

Fax: (+90-312) 467-0056

Internet: agankara@fas.usda.gov

Email: agankara@fas.usda.gov

Embassy of the United States: Baku, Azerbaijan

83 Azadlyg Avenue

Tel: (+994 12) 98 03 35

Fax: (+994 12) 98 61 17

Government of Azerbaijan Contacts:

Head of Plant Quarantine Department

Ministry of Agriculture

Dr. Mehraj Aliyev

Tel: (+994 12) 96 50 18

Chief Veterinary Officer

Ministry of Agriculture

Dr. Ramiz Safarov

Tel: (+994 12) 62 76 13

IMPORTERS

Banvit, Importer of Turkish Foodstuffs (mostly poultry)

25 Nobel Ave., Baku, Azerbaijan

Contact Person: Nigar Yusufova

Tel/Fax: (99412) 470442

Mobile: (99450) 2123570

Email: nigar_banvitaz@azdata.net

Fortuna Imex, Imports of meat products from Poland, Chech Republic,
Germany (mostly from Poland)

Contact Person Vagif Agayev,

Phone: (994 12) 986831, 936718

Victory Ltd.

Contact Person: Valid Sadigov

Phone: (99412) 985222

Nurgun Holding, Imports from Europe & America. Look in distributors list
below.

Azersun Holding

92a Moscow Avenue

Contact Person: Ali Yuksel, Chief of Marketing Department,

Phone: (994 12) 981522, 662480, 661338

E mail: reklam@azersun.com

DISTRIBUTORS:

Azsharg Marketing (distributor of Fazer-Finnish Confectioner)

12/13 M. Mushvig Str, Baku Azerbaijan

Contact Person : Faik Shiraliev, Director.

Tel/Fax (99412) 975 775 / 396 666

Nurgun Group (Official Distributor of Julian and Mozart brands of
confectionery).

Contact Person: Ramiz Maharramov, Executive Director

2054th hood, M. Narimanov Str.

Tel (994 12) 47 96 49, 47 95 69,

Fax: (994 12) 96 66 31

RETAILERS (SUPERMARKETS):

Ramstore Supermarket (Limited Liability Turkish Food Enterprise)

Hood (Mahalle) \# 1129, Hatai district, Baku, Azerbaijan.

Contact Person: Anar R. Mammadov, Marketing Manager

Telephone: (99412) 90 32 00, 90 32 02

Fax: (994 12) 90 32 01,

CityMart

19 Samed Vurgun St.,

Phone (994 12) 987338

Continental

68 Nizami Str., & 51 Inglab Str.,

Phone: (99412) 937541

New World Center

31 Inshaatchilar Ave.,

Phone: (99412) 381183

Progress

103 Azadlig Ave.,

Phone: (99412) 400316

World Market

135 Nizami Str, 370000

Tel: (994 12) 98 51 44

For more information on high value food and other agricultural sector
reports for Azerbaijan or other countries around the world, please refer
to the FAS homepage, URL address:
[http://www.fas.usda.gov](http://www.fas.usda.gov/)

**APPENDIX 1. STATISTICS:**

######## A. OVERVIEW OF KEY TRADE & DEMOGRAPHIC INFORMATION FOR AZERBAIJAN

  ------------------------------------- ---------------- ----------------
  **KEY TRADE AND DEMOGRAPHIC           **YEAR**         **VALUE**
  STATISTICS**                                           

  Food and Agricultural Imports from    2002             238.1 / 6.4
  all countries (\$mil) / US Market                      
  Share (%)                                              

  Total population (million)            2002             8.2

  Urban Population (million)            2002             4.2

  Number of Metropolitan Areas          2002             5

  Per Capita Food Expenditures          2002             \$225 (est)

  Per Capita Income                     2001             \$500

  Per Capita Gross Domestic Product     2002             \$750

  Exchange Rate US\$1 = Azerbaijani     30.12.2002       4,893
  Manat                                                  
  ------------------------------------- ---------------- ----------------

*Source: Azerbaijan State Statistics Committee*

**B. TOP SUPPLIERS OF FOOD AND AGRICULTURAL PRODUCTS EXPORTING TO
AZERBAIJAN IN 2002:**

  ----------------------- ----------------------- -----------------------
  **Beef Imports**                                

  **Name of Countries**   **Volume (in \$1000)**  **Market Share (%)**

  Total                   571.0                   100.0

  Including                                       

  India                   250                     43.8

  USA                     141.4                   24.8

  Australia               93                      16.3

  Georgia                 54                      9.5

  Germany                 13.7                    2.4

  Others                  18.9                    3.2
  ----------------------- ----------------------- -----------------------

  ----------------------- ----------------------- -----------------------
  **Pork Imports**                                

  **Name of Countries**   **Volume (in \$1000)**  **Market Share (%)**

  Total                   132                     100.0

  Including                                       

  Canada                  60.4                    45.7

  France                  29.5                    22.3

  Denmark                 27.7                    21

  Germany                 8.7                     6.6

  UAE                     5.7                     4.3

  Others                  0                       0
  ----------------------- ----------------------- -----------------------

+----------------------+-----------------------+-----------------------+
| **Mutton Imports**   |                       |                       |
+======================+=======================+=======================+
| **Name of            | **Volume (in          | **Market Share (%)**  |
| Countries**          | \$1000)**             |                       |
+----------------------+-----------------------+-----------------------+
| Total                | 534.9                 | 100.0                 |
+----------------------+-----------------------+-----------------------+
| ###### Including     |                       |                       |
+----------------------+-----------------------+-----------------------+
| Saudi Arabia         | 473.2                 | 88.5                  |
+----------------------+-----------------------+-----------------------+
| UAE                  | 27.2                  | 5.1                   |
+----------------------+-----------------------+-----------------------+
| Australia            | 26.8                  | 5                     |
+----------------------+-----------------------+-----------------------+
| USA                  | 6.5                   | 1.2                   |
+----------------------+-----------------------+-----------------------+
| Germany              | 1.2                   | 0.2                   |
+----------------------+-----------------------+-----------------------+
| Others               | 0                     | 0                     |
+----------------------+-----------------------+-----------------------+

  ----------------------- ----------------------- -----------------------
  **Poultry Imports**                             

  **Name of Countries**   **Volume (in \$1000)**  **Market Share (%)**

  Total                   11569.1                 100.0

  Including                                       

  USA                     5479.3                  47.4

  Turkey                  2863.8                  24.8

  Brazil                  1464.3                  12.7

  France                  486.7                   4.2

  Hungary                 324.9                   2.8

  Others                  950.1                   8.1
  ----------------------- ----------------------- -----------------------

**Fish and Fish Products:**

  ----------------------- ----------------------- -----------------------
  **Name of Countries**   **Volume (in \$1000)**  **Market Share (%)**

  Total                   1003.0                  100.0

  Including                                       

  Russia                  653.9                   65.2

  Kazakhstan              249.1                   24.8

  Norway                  68.5                    6.8

  Germany                 15.6                    1.6

  Georgia                 11                      1.1

  Others                  4.9                     0.5
  ----------------------- ----------------------- -----------------------

**Dairy Products:**

  ----------------------- ----------------------- -----------------------
  **Name of Countries**   **Volume (in \$1000)**  **Market Share (%)**

  Total                   2686.2                  100.0

  Including                                       

  Ukraine                 1403.4                  52.2

  Russia                  890.1                   33.1

  USA                     188                     7

  Germany                 71.7                    2.7

  New Zealand             39.9                    1.5

  Others                  93.1                    3.5
  ----------------------- ----------------------- -----------------------

**Eggs:**

  ----------------------- ----------------------- -----------------------
  **Name of Countries**   **Volume (in \$1000)**  **Market Share (%)**

  Total                   1826.2                  100.0

  Including                                       

  Iran                    876.2                   48

  Netherlands             806.7                   44.2

  Turkey                  116.7                   6.4

  Ukraine                 22.3                    1.2

  Russia                  2.3                     0.1

  Others                  2                       0.1
  ----------------------- ----------------------- -----------------------

**Fresh Vegetables:**

  ----------------------- ----------------------- -----------------------
  **Name of Countries**   **Volume (in \$1000)**  **Market Share (%)**

  Total                   9820.7                  100.0

  Including                                       

  Iran                    7371.4                  75.1

  Russia                  1251.5                  12.7

  Turkey                  891.3                   9.1

  USA                     82.1                    0.8

  Poland                  75.3                    0.8

  Others                  149.1                   1.5
  ----------------------- ----------------------- -----------------------

**Fresh Fruits:**

  ----------------------- ----------------------- -----------------------
  **Name of Countries**   **Volume (in \$1000)**  **Market Share (%)**

  Total                   1764.5                  100.0

  Including                                       

  Iran                    872.7                   49.5

  Turkey                  362.4                   25

  Ecuador                 108.6                   6.2

  Georgia                 108.1                   6.1

  South Africa            64.2                    3.6

  Others                  248.5                   9.6
  ----------------------- ----------------------- -----------------------

**Sausages:**

  ----------------------- ----------------------- -----------------------
  **Name of Countries**   **Volume (in \$1000)**  **Market Share (%)**

  Total                   1926.9                  100.0

  Including                                       

  Russia                  691.8                   35.9

  USA                     271.2                   14.1

  France                  242.2                   12.6

  Hungary                 195.4                   10.1

  Turkey                  157                     8.1

  Others                  369.3                   19.2
  ----------------------- ----------------------- -----------------------

**Fruit Juices:**

  ----------------------- ----------------------- -----------------------
  **Name of Countries**   **Volume (in \$1000)**  **Market Share (%)**

  Total                   1242.7                  100.0

  Including                                       

  Turkey                  333.8                   26.9

  Germany                 308.3                   24.8

  Russia                  211.9                   17

  Austria                 154.7                   12.5

  Ukraine                 110.8                   8.9

  Others                  123.2                   9.9
  ----------------------- ----------------------- -----------------------

**Beer:**

  ----------------------- ----------------------- -----------------------
  **Name of Countries**   **Volume (in \$1000)**  **Market Share (%)**

  Total                   763.8                   100.0

  Including                                       

  Turkey                  218.4                   28.6

  Netherlands             198.6                   26.0

  Russia                  78.1                    10.2

  Austria                 30.3                    4

  Mexico                  30.3                    4

  Others                  208.1                   27.2
  ----------------------- ----------------------- -----------------------

**Wine:**

  ----------------------- ----------------------- -----------------------
  **Name of Countries**   **Volume (in \$1000)**  **Market Share (%)**

  Total                   473.6                   100.0

  Including                                       

  Moldova                 342.8                   72.4

  France                  77.9                    16.4

  UK                      19.3                    4.1

  Belgium                 17.6                    3.7

  Germany                 15.9                    3.4

  Others                  0                       0
  ----------------------- ----------------------- -----------------------

**Spirits:**

  ----------------------- ----------------------- -----------------------
  **Name of Countries**   **Volume (in \$1000)**  **Market Share (%)**

  Total                   1195.5                  100.0

  Including                                       

  Ukraine                 1194.3                  99.9

  USA                     1.3                     0.1

  Others                  0                       0
  ----------------------- ----------------------- -----------------------

**Whiskey:**

  ----------------------- ----------------------- -----------------------
  **Name of Countries**   **Volume (in \$1000)**  **Market Share (%)**

  Total                   24.2                    100.0

  Including                                       

  Belgium                 19.1                    78.9

  Germany                 4.6                     19.2

  Canada                  0.5                     2

  Others                  0                       0
  ----------------------- ----------------------- -----------------------

**Vodka:**

  ----------------------- ----------------------- -----------------------
  **Name of Countries**   **Volume (in \$1000)**  **Market Share (%)**

  Total                   431.3                   100.0

  Including                                       

  Russia                  376.8                   87.4

  Lithuania               33.1                    7.7

  Ukraine                 11.0                    2.6

  Germany                 7.7                     1.8

  Belgium                 2.3                     0.5

  Others                  0.4                     0.01
  ----------------------- ----------------------- -----------------------

**Cigarettes:**

  ----------------------- ----------------------- -----------------------
  **Name of Countries**   **Volume (in \$1000)**  **Market Share (%)**

  Total                   7815.3                  100.0

  Including                                       

  Germany                 4737.0                  60.6

  USA                     1781.9                  22.8

  Kazakhstan              554.7                   7.1

  Switzerland             192.7                   2.5

  Cyprus                  140.7                   1.8

  Others                  408.3                   5.2
  ----------------------- ----------------------- -----------------------