Armenian wine producers sustain losses due to exchange rate fluctuations

YEREVAN, January 13. /ARKA/. Armenian wine producers have been sustaining losses because of the significant appreciation of the Armenian dram in recent months, Armavir Fruit company co-founder Hayk Manukyan said at a press conference on Friday.

According to him, the strong dram is hitting hard export-orientated sectors of the economy forcing some exporting companies that used to trade with Russia in US dollars to change the currency to Russian rubles in their contracts.

However, the ruble began losing some of its value creating for Armenian exporters new problems. 'Sharp fluctuations in the exchange rates, which are uncontrollable and unpredictable are creating big problems for entrepreneurs," he said.

According to him, the companies, which are engaged in exports, must have a risk management policy in case of the exchange rate fluctuations, but such sharp and strong fluctuations were a surprise for everybody.

Manukyan believes that more systemic solutions are necessary to regulate the situation. He said his company managed to agree with many partners to set the price of products in AMD (a fixed price in AMD is converted into the required currency at the current exchange rate).

"Producers, exporters can come together, implement joint projects, and conclude contracts in drams. Each of us can do something. The government , in turn, should allow us to have time to think through a plan of action," he said.

Vazgen Matevosyan, the founder of Matevosyan Wine company, said a way out should be actively looked for in the current situation. ‘If old markets do not work, we should look for new ones or strengthen the old ones at least in small amounts, so that the sales do not stop.'

"If exports of wine or cognac decrease or stop, it will carry a great risk and danger, because it would lead to a chain reaction. We must think about this problem now so that at the end of the year we do not face a chaos," he warned.

Matevosyan pointed out that producers today also face logistical problems that interfere with a normal export schedule.

"The business sector, which has faced these problems, must cooperate with the state to solve them," he said.

Arsen Mkrtchyan, founder of Noah of Areni, says even if Russia is the largest market for Armenian produces, 'we need to diversify our markets to reduce risks." -0-