Serbia Newsflash Week 15, 2022

Continuing food inflation, possibilities for biodiesel production, a new fertilizer factory doing test runs, new opportunities for international trade and promising projects in environmental protection - The week in Serbian agriculture

Food products on shelves in a grocery store.
Beeld: ©Flickr
Last month, food prices in Serbia were 10.9% higher than a year ago. The latest productions show a gradually slowing inflation trend, however producer prices in agriculture still show 17%-24% y-o-y increases for March.

The reasons behind the increase in food prices  

Compared to March 2021, prices of processed food were higher by 10.9% last month, and the prices of unprocessed food were higher by 26%. The high y-o-y growth of food prices is mostly the consequence of factors on the supply side, to which monetary policy measures have a limited effect, stated the National Bank of Serbia (NBS).

According to the information of the Republic Statistical Office (RZS), inflation in March amounted to 0.8% at the monthly level, which is close to the figure from previous months. Serbian producer prices of agricultural and fishing products in February 2022 were up by an average of 17.9% y-o-y, said the RZS. Prices of cereals saw the highest increase (22.1%), followed by industrial crops (24.0 %) and animals (20.3%). Month-over-month, producer prices of agricultural and fishing products in February 2022 increased by an average of 2.1%. Again, cereals saw the highest price increase - 2.5% - followed by industrial crops (5.4%). 

The prices of energy sources grew by 1.4% at the monthly level in March. The trend there was solely determined by global factors, mostly by the growth of the global price of oil, which spilled over to the increase of the price of petroleum products on the Serbian market.

According to a projection by the NBS from the February Report on Inflation, y-o-y inflation should gradually slow down towards the central value of the goal by the end of the projected period. The uncertainty prevalent in international financial and commodity markets in the previous months was caused by the appearance of new strains of the coronavirus, but further exacerbated by the effect of geopolitical tensions and the war in Ukraine. Nonetheless, the NBS believes that the downward trend of inflation will not change. 

A possibility for biodiesel production in Serbia

The rise of the price of energy sources is leading to the necessity of the use of alternative fuels for machines in many countries, and the usage of biodiesel has become a viable option again.

Milan Tomic, a professor at the Faculty of Agriculture in Novi Sad, said that the production of biodiesel in Serbia has been reduced to the operations of micro-facilities with small capacities, mostly located on agricultural properties, where farmers use biodiesel for their own needs.

Since the beginning of the pandemic and then the war in Ukraine, those who advocate the use of biodiesel in Serbia, primarily in agriculture, have grown more vocal. Professor Tomic explains that, in Serbia, the main raw ingredients for the production of biodiesel, sunflower and soybean, are grown on around 450 thousand hectares, whereas rapeseed is grown only over 25 thousand hectares. Considering the population’s food needs, an area of around 242 thousand ha could be used for the production of biodiesel in Serbia, which, he points out, would enable the production of around 242 thousand tons of biodiesel a year.  

Fertilizer factory in trial run

Pancevo-based HIP Azotara is in the phase of trial operation, i.e. starting production, states the Tanjug news agency. The production of ammonia is in the initial phase, and the production of liquid artificial fertilizers should follow, and then possibly others.

HIP Azotara, which was the only producer of ammonia in Serbia and the largest producer of artificial fertilizers for decades, was in a state of bankruptcy and bought up by the company Promist in May 2021 for €5.5 million. It was then announced that production in the factory, which has been in bankruptcy since the autumn of 2018, would be renewed.

HIP Azotara is a significant consumer of natural gas as a raw material from which it produces artificial fertilizers in a complex process. Tanjug has reiterated that the production of artificial fertilizers is of strategic importance for agriculture in Serbia because a significant portion is imported. At the global market, prices have increased dramatically due to a significant growth in gas prices. Russia, the largest producer of this commodity in the world, has banned the export of artificial fertilizers in order to secure domestic needs.

Corn plants with ears of corn on the cob.
Beeld: ©Franz W.
In Serbia, 450 thousand hectares are used in maize cultivation. This might present a new opportunity for the production of biodiesel as global energy prices continue to skyrocket.

Great interest in Serbian fruits and vegetables at FRUIT LOGISTICA 2022

At the international fair of fresh fruit and vegetables FRUIT LOGISTICA 2022, thirteen Serbian companies  presented their offer. “The crowd at the National Stand of Serbia was noticeable. Serbian companies had important meetings with potential foreign partners from the very start of the Fair. New exporting possibilities were discussed with the United Arab Emirates, India, Sweden, Great Britain, Poland and the Netherlands” stated the Serbian Chamber of Commerce which was a co-organizer of the national stand.

Companies presenting fresh fruit and vegetables at the Serbian stand were: Select Fruit, Hladnjace Brestovik, Borovnica klub, Fruct Company, Ciric agro, Forma BM, Vija Product, Pollino Fruit, Berry 4U, Apple World, Agro Bel System, Delta agrar, Terra Optima.

Improving environmental standards with EU support

With the support of the European Union, a reform in the water sector is being implemented in Serbia, which will contribute to improved efficiency in the provision of water services, stated Vedrana Ilic, Assistant Minister for International Cooperation and European Integration at the Ministry of Agriculture, at the presentation of the new EU-funded project:  “EU Support for Water Sector Reform”. Mrs. Ilic pointed out that the project is extremely important not only because of the development of very useful documents, but also because of its comprehensive benefits through consideration of all shortcomings and challenges that need to be overcome on the way to establishing an adequate tariff policy in the water sector in Serbia.

Antoine Avignon, Program Manager of the EU Delegation to Serbia reminded that the reforms in the Republic of Serbia, with the support of the EU, are being implemented for the sake of the citizens, with the goal that the citizens have better quality water, as well as more efficient water services.

Lidl allocating funds for waste clean-up campaign

After a successful implementation of the Cisto iz ljubavi (“Purely Out of Love”) campaign last year, through which around eight tons of waste has been removed, Lidl Srbija invites organizations throughout the country to be active this May and help collect the waste scattered around the natural environment in Serbia.

To organizations interested in joining the clean-up activities through Lidl’s campaign, the company will provide funds for carrying out campaigns in their neighborhoods. More at: Purely out of Love