Armenia's food security landscape is crucial due to its significant reliance on imported food supplies and the associated vulnerabilities. With the self-sufficiency ratio of vital food products averaging only 40% in 2023, Armenia remains critically dependent on imports to meet domestic demand. Russia is the primary source of imports for key commodities such as wheat, vegetable oil, sugar, and poultry. Given the country’s exposure to geopolitical and climatic instability in its primary supplier, this poses a significant risk profile.

This reliance becomes especially concerning as global and regional tensions, including the ongoing Russian-Ukrainian conflict, threaten to disrupt trade flows. Any instability that impacts Russian agricultural production or results in trade restrictions could trigger price hikes or even lead to supply shortages in Armenia. Notably, recent fluctuations in imports of staples like wheat and flour underscore Armenia’s vulnerability to external shocks and illustrate the potential storm on the horizon.

In this context, exploring and expanding alternative supply networks is no longer an option but a necessity. The Government of Armenia and relevant stakeholders must proactively diversify food import channels, focusing on new partnerships and exploring opportunities to bolster domestic production. This policy shift is essential to mitigate the risks of over-reliance on any single source, especially amid mounting uncertainties. Navigating these complex challenges will require a nuanced understanding of market dynamics, proactive policy interventions, and regional collaboration, ensuring that Armenia can maintain a stable food supply and safeguard its food security in the face of looming uncertainties.

When it comes to supplies of various vital food items and products, Armenia predominantly relies on imports to meet the domestic demand. The self-sufficiency ratio of the products included in Armenia’s national food balance in 2023 is about 40% and below, indicating a significant reliance on imports of wheat, rye, rice, corn (maize), leguminous crops, vegetable oil, sugar, pork, and poultry. Armenia predominantly imports food products from Russia, one of its trade partners, to meet domestic demand, which leaves Armenia vulnerable to developments in Russia, such as adverse weather conditions, natural disasters, and events that could negatively affect the crops, including those not directly related to weather conditions but linked to the Russian-Ukrainian war. These events could even barely hit the crops, compared to the aftermath of the bad weather conditions per se, thus forcing Russia to impose an embargo on exports, namely wheat, etc., and resulting in significant price increases. In such circumstances, Armenia would attempt to navigate “the storm” out of control. It must focus on new markets for the required supplies as soon as possible to avoid the worst scenario described below.

National food balance of Armenia:

Table 1. Imports of food products (in tons)

Source: Statistical Committee of Armenia (SCA). https://www.armstat.am/file/article/f_sec_3_2024_3.pdf 

Wheat remains the dominant import, though quantities have declined from a peak in 2022 to lower levels by 2024, with quarterly data showing fluctuations (see Table 1). This reduction could stem from geopolitical tensions, global price fluctuations, or a deliberate shift toward local flour processing (as flour imports rose significantly). Flour imports rose sharply between 2021 and 2023, stabilizing in 2024. Rice imports have remained relatively low and declining since 2022. Similarly, imports of macaroni products show minor year-to-year variations with steady quarterly outputs in 2024 (see Table 1). The data indicates a slight growth in eggs and poultry imports over the years, while beef and pork show fluctuations without a clear upward or downward trend (see Table 1).

Despite its significance as a caloric staple, Armenia's heavy reliance on wheat imports poses significant risks. The nation is vulnerable to price hikes or geopolitical disruptions. While certain crops, such as potatoes (99.2%), vegetables and melons (97.4%), and fruits (103.1%), demonstrate high self-sufficiency ratios, commodities like rice, vegetable oil, and legumes show negligible domestic production, reflecting heavy import dependence (see Table 2). The near-complete self-sufficiency (99.2% for potatoes, 97.4% for vegetables) in these sectors is a strength, but it must be balanced with sustainable practices and market demand. The vulnerability of rice lies in its complete importation and low consumption compared to wheat, despite its minimal contribution to total caloric intake.      

Table 2. National food balance of the Republic of Armenia, 2023 (in  thousand tons)

Source: Statistical Committee of Armenia (SCA). https://www.armstat.am/file/article/f_sec_3_2024_3.pdf 

Reliance on Russian Supplies: Russia dominates as the leading import partner for many categories, including wheat (1001, 99.67%) and sunflower oil (1512, 97.5%) (see Table 3). Russia’s share has grown in most categories, such as wheat (1001), flour (1101), and sunflower oil (1512) (see Table 3). This reflects Armenia’s increasing reliance on Russia. Armenia’s dependance on Russia for over 90% of some critical imports (e.g., wheat, sunflower oil) poses risks, especially amid potential geopolitical tensions (see Table 3). Brazil performs strongly in pork (0203, 62.5%) and sugar (1701, 42.61%) (see Table 3). In some products, like rice (1006) and sugar (1701), alternative suppliers (e.g., Thailand and Brazil) provide competition. Canada and the EU (e.g., France, Austria) have niche roles in specific product categories (see Table 3). Türkiye and Georgia appear as more minor but notable contributors in specific product categories. Some product categories saw sharp changes in import dynamics (see Table 3). For instance, imports of dried legumes (0713) from Russia decreased significantly in 2023 compared to 2022. Russia has the highest share of staple imports, such as wheat, corn, and sunflower oil, which suggests a heavy reliance on this partner. Strengthening trade with alternative partners could mitigate the risks of over-reliance on a single supplier.

Forecasts on Wheat, Sunflower Oil, and Export Duties

However, the 2025 level will be below the five-year average. The SovEcon estimates anticipate the wheat crop will reach 81.5 Mt in 2024. Nevertheless, the drought in the fall of 2024 affected the planting and, consequently, the planted area, which was considered not a favorable start for 2025 winter crops in some areas. Therefore, the projections of SovEcon for 2025 are about 80.1 Mt^[1]. On 25 October 2024, sunflower oil export duties were raised and became effective for November, reaching 2,891.1 rubles (USD 29.96) per ton from 0 Russian ruble, and further increased for December 2024. However, the duties will not affect Armenia as a member state of the Eurasian Economic Union^[2]. Forecasts indicate that Russia will produce 5,952,200 metric tons of sunflower oil by 2026, up from the forecast of 5,650,197 metric tons for 2024^[3]. According to the Vesper West E.U. Forward Price Index on October 14, 2024, the prices of crude sunflower oil reached 1,240 US dollars per metric ton compared to $1,175 per metric ton of the previous week. The price increase was associated with the farmers' actions to hold back on sales. Reports indicated a price increase for crude sunflower oil in Ukraine (FOB Ukraine). Various plants in Ukraine and Russia reported only seed coverage worth several weeks, which could exacerbate the market's overheating concerns^[4].

The Key Impediment, or “Storm,” to Navigating Through 

As of June 24, 2024, Ukraine had already hit over 30 Russian oil refineries and depots^[5]. As of May 21, 2024, the attacks on Ukraine had no impact on oil prices. However, the crude oil processing at Russian refineries during the first quarter of 2024 compared to the same quarter of 2023 declined^[6]. On November 29, 2024, reports of such a strike surfaced. It is expected that at the end of 2024, “wild swings in oil prices”^[7] could be reported. If Ukraine continues striking and hitting oil refineries and depots along with the Western sanctions (on respective technology) in place, Russia would be constrained to refine fuel and supply (required) to the farmers, which could seriously hit the production of vital food products despite all crop forecasts. Reports would indicate a significant increase in prices and a reduction in crop yields.      

Possible Scenarios

Realistic Scenario: Under this scenario, we expect that the prices of vital supplies from Russia won’t seriously hit the imports, especially if the Armenian dram continues to appreciate against the Russian ruble that started in 2023, or at least the foreign exchange rate remains unaffected in 2025. We do not expect any hostile actions from Russia, such as imposing any ban on export of vital food products to Armenia. At the same time, Armenia will continue to be predominantly dependent on Russian supplies in 2025.

Worst Scenario: In this scenario, we anticipate that Ukraine will persist in its strikes and attacks on oil refineries until Spring 2025 and Summer 2025, thereby disrupting fuel supplies and crop yields. This would significantly impact Armenia's imports of essential food products from Russia, leading to significant price hikes. If the Armenian dram continues to appreciate against the Russian ruble, a trend that began in 2023, it won't be sufficient to offset the severe price hikes. The Economic Research Team at Nexus Intellect Research anticipates that Russia may impose severe export bans on essential food products, which would also negatively impact Armenia. Although Armenia will remain predominantly dependent on Russian supplies in 2025, it will require urgent steps to switch to new suppliers from the rest of the world to minimize the dependence on Russian supplies. 

Policy Implications: The Government of Armenia needs to collaborate with importers of vital food products and switch to new suppliers from other countries as soon as possible to mitigate the risks associated with the worst-case scenario.

Table 3. Import of main food product to Armenia

Source: United Nations. UN Comtrade. The data were retrieved from the UN Comtrade database according to HS codes at a 4-digit level. Author's calculations. https://comtradeplus.un.org/. Note: 0203=Meat of swine, fresh, chilled, or frozen; 0207=Meat and edible offal, of the poultry of heading 0105, fresh, chilled or frozen; 0708= Leguminous vegetables, shelled or unshelled, fresh or chilled; 0713=Dried leguminous vegetables, shelled, whether or not skinned or split; 1001=Wheat and meslin; 1005=Corn (maize); 1006=Rice; 1101=Wheat or meslin flour; 1512= Sunflower-seed, safflower or cottonseed oil, and fractions thereof, whether or not refined, but not chemically modified; 1701= Cane or beet sugar and chemically pure sucrose, in solid form; 1002= Rye; 1507= Soybean oil and its fractions, whether or not refined, but not chemically modified.

Authors: Anna Makaryan, Ph.D., Hamlet Mkrtchyan, Verej Isanians, Ph.D., Nexus Intellect Research NGO

[1] Source: https://ahdb.org.uk/news/below-average-2025-russian-wheat-crop-grain-market-daily 

[2] Source: https://www.globaltradealert.org/intervention/140312/export-tax/russia-increase-in-sunflower-oil-export-duties-november-2024; 

https://www.globaltradealert.org/state-act/89516/russia-increase-in-sunflower-oil-export-duties-december-2024

[3] Source: https://www.reportlinker.com/dataset/e2262f01c3920cebd7e8b2d3e405b8ad6286df9e 

[4] Source: https://vespertool.com/news/sunflower-oil-prices-surge-above-rival-oils/ 

[5] Source: https://www.reuters.com/world/europe/ukraine-has-hit-over-30-russian-oil-refineries-depots-zelenskiy-says-2024-06-24/

[6] Source: https://www.osw.waw.pl/en/publikacje/osw-commentary/2024-05-21/budanovs-sanctions-consequences-ukrainian-attacks-russian 

[7] Source: https://oilprice.com/Latest-Energy-News/World-News/Ukraine-Claims-Hit-on-Oil-Depot-in-Russia.html