Recently, Minister of Economy Gevorg Papoyan announced that Russian wheat is being transported to Armenia by rail for the first time via Azerbaijan’s territory. A similar shipment of Kazakh wheat is expected to follow soon. This development began after President Aliyev’s visit to Kazakhstan, during which he declared the lifting of the ban on transit transportation to Armenia.
How should this be interpreted, and what economic effect could it have on Armenia’s market? Economist Suren Parsyan shared his view.
Kazakh wheat cannot fully replace Russian wheat
“It’s no secret that Armenia is heavily dependent on the Russian Federation for wheat imports,” Parsyan emphasized.
“We can cover only 30–35% of domestic consumption, while 65–70% is imported — and 99% of that comes from Russia. Armenia therefore needs to diversify its supply sources. Bringing wheat from Kazakhstan and other countries can help reduce dependence on a single route.”
Parsyan recalled the events of 2022: when the Russia–Ukraine conflict began, Russia imposed export restrictions on wheat, which also affected Armenia. “We were allowed to receive only the amount required for domestic consumption — no more.”
That situation, he said, revealed Armenia’s vulnerability and the need to find alternative suppliers. “Thus, importing Kazakh wheat is a normal and important step.”
According to him, Armenia imports around 300,000 tons of wheat annually — for both food and industrial uses such as vodka production. Kazakhstan could supply part of that volume but cannot fully replace Russian wheat.
“For example, importing 50,000 tons of Kazakh wheat would reduce our dependency by roughly 15–20%,” he explained.
However, he added that complete substitution is unlikely. “Russian wheat is cheaper, produced in larger quantities, and heavily supported by the Russian government. It’s unlikely that expanding Kazakh wheat imports would lower prices.”
Until 2022, Armenia imported about 10% of its wheat from Ukraine, but due to the war and logistical difficulties, that route was abandoned in favor of increased Russian supplies.
Political meaning rather than economic benefit
Commenting on transportation and logistics, Parsyan noted that in recent years, Armenia’s logistics costs have risen sharply, and both importers and exporters have repeatedly raised this issue.
Previously, Russian wheat was shipped from Krasnodar to the port of Poti, then by ferry and rail to Yerevan — with the ferry stage being particularly expensive.
Now, a new opportunity has emerged: a route starting in Russia, passing through Azerbaijan and Georgia, and reaching Armenia entirely by rail, without the need for ferries.
“If the wheat comes from southern Russia, transportation costs might decrease slightly, but from Rostov or farther regions they could be just as high, or even higher,” Parsyan explained.
In the case of Kazakh wheat, it is transported from Kazakhstan through the port of Baku, then by rail to Tbilisi and finally to Yerevan. “The railway segment is longer than the Poti–Yerevan route, so transportation costs will be higher,” he clarified.
In Parsyan’s assessment, in purely economic terms, this change provides no major advantages. “It won’t lower prices or bring significant savings. However, the authorities present this as a political and security signal — showing that Armenia managed to import goods through Azerbaijan, implying improved security and progress in the peace process,” Parsyan said.
He concluded that these initiatives should be viewed mainly in a political context rather than a purely economic one.