AZE.US
Russia’s trade restrictions on Armenian exports have exposed the risks of relying too heavily on a single market and forced Armenian producers to urgently look for alternatives.
Speaking to CivilNet, Dr. Hovsep Patvakanian, Head of the Investment Council of Armenia, said many Armenian companies had long understood the need to diversify, but Russia remained the most attractive destination because of higher profit margins and easier market access.
According to Patvakanian, the current restrictions did not come as a complete surprise. Armenian businesses had already been discussing diversification, but many producers continued to prioritize Russia because entering other markets often meant higher logistics costs, stronger competition and lower margins.
He said the crisis has now pushed exporters to take steps they had delayed for years.
Patvakanian divided Armenian exporters into two main groups. The first consists of companies that mostly worked with Russia and lack the certifications and standards needed for the European Union, the Gulf or other markets. For them, adjustment will be difficult in the short term.
The second group includes companies that already meet international standards and even have access to some retail chains abroad. Their main challenge is not entry, but sales, branding and stable turnover.
He stressed that Armenia cannot simply replace Russia with the EU overnight. The European market is highly competitive and difficult for third-country producers to enter. Instead, Armenia should focus on markets where its products already have recognition or a competitive advantage.
Among the more realistic destinations, Patvakanian named Central Asia, the Gulf countries, the Baltic states, Ukraine and Moldova. He said Armenian products such as dried fruits, canned food, chocolate, strawberries, tomatoes, cucumbers and peppers may have stronger prospects in specific markets if exporters target the right product category.
For example, he said Armenian tomatoes have little chance in many EU markets, but may be competitive in the Gulf. Armenian peppers, meanwhile, could have opportunities in France, where imports already play an important role.
Patvakanian also pointed to the importance of diaspora-linked distribution networks in Europe. According to him, Armenian-owned distributors in countries such as Sweden, the Czech Republic, Poland and France could help Armenian producers enter retail chains beyond narrow ethnic consumer markets.
Logistics remain one of the biggest problems. Patvakanian said Armenian exporters need stable air cargo and truck routes to the EU, Gulf countries and Central Asia. Without predictable delivery schedules, producers struggle to negotiate with large retail chains, which require uninterrupted supply.
He also argued that Armenia should develop warehouse facilities in key trade hubs abroad, allowing non-perishable goods to be stored closer to target markets.
Another priority, he said, is the creation of collection and distribution centers inside Armenia, possibly with the participation of foreign retail chains. Such centers could help smaller farmers meet standards, aggregate volumes and secure guaranteed demand.
Patvakanian said small farmers are among the hardest hit by the current crisis. The Armenian government has introduced compensation for losses in June and July, with support also expected for August. He added that around 20 to 22 government assistance programs already exist to help farmers cover part of the costs for greenhouses, intensive orchards and smart farms.
Looking ahead, Patvakanian said Armenia may need three to four years to rebuild the export volumes it previously sent to Russia and diversify them across several regions.
He said an international trade forum planned in Armenia on October 7-9 will bring distributors, retail chain representatives and buyers from abroad to meet local producers. More than 35 distributors and retail chains have already confirmed participation, according to him.
The broader message, Patvakanian said, is that Armenia’s export future cannot depend on a single destination. Even if Russia eventually removes its restrictions, many Armenian producers are now likely to think twice before returning to the old model.
AZE.US