Serbia Newsflash Week 20
Horticulture news, trade figures, the effects of COVID-19 on vegetable production, food price inflation, the success of Serbian SMEs and the formation of the united Western Balkans Six cooperation in international investments - The week in Serbian agriculture
Lower raspberry yields expected this year
According to current estimates, the raspberry yield in Serbia this year will be half of the average annual yield of 83,000-84,000 tons since raspberry fields are neglected due to low purchasing prices in previous years, stated the President of the Association of Raspberry and Blackberry Growers, Mr. Radovic. As he told the Beta news agency, the total raspberry yield in Serbia this year is expected to reach some 40,000 tons. He also questioned the official statistical data of 25.000 hectares of raspberry orchards, as according to his knowledge raspberry fields account for barely 13,000-14,000 ha of agricultural land.
“Raspberry fields are neglected. There are also infected by crop diseases due to the uncertified planting material bought cheaply in 2016 and 2017 when plantations were being restored,” Mr. Radovic explained. He added that wholesale prices had been low for years, additionally affecting the bad situation. Due to “bargain prices,” blackberry fields have also gone from cca 6,500 ha to around 1,300 ha. “Last year, the wholesale blackberry price ranged from €0.25-€0.51 per kg, and now, the purchasers have taken them out of their cold rooms, offering the blackberries for €1.7- €2.12 per kg. No one is wondering if they paid extra profit and what the anti-monopoly commission is doing,” the President of the Association noted. Mr Leposavic, berry expert from the Fruit Research Institute explained, talking about the future sales of around 20.000 tons of raspberries. “Certain exporters concluded unfavorable export contracts when the export price of raspberries was lower than purchasing price. Meanwhile, some of them managed to postpone the shipments of approximately 20.000 tons and made arrangements for the export of this years’ yields. This is the reason for significant advance sales of raspberries”, stated Mr Leposavic for daily Politika.
Vegetable growers suffered greatly from COVID-19 effects
The COVID-19 pandemic had a measurable impact on several agriculture sub-sectors. Vegetable growers are struggling with the recovery of their businesses. The leading agronomists in Serbia estimate a loss per hectare between €1,500 and €3,000.
The level of COVID-19’s impact on vegetable production is illustrated by farmer Mr Dusan Petrovic from Vojvodina village Gospodjinci, well-known for its vegetable production. Mr Petrovic explained that since the market closure and inability to sell his products he discarded between 800-1000 tons of onions. He is just one of many farmers with such loss. Professor Ilin, expert for vegetable production from the University of Novi Sad underlined that small and medium producers suffered the most.
Soybean prices continue to rise
The soybean prices on the Novi Sad Commodity Exchange hit an all-time high this week, reaching €0.73 per kg. It is an increase of 100% compared to May last year. According to Novi Sad Commodity Exchange CEO Milos Janjic, although the demand was notable, sellers were not willing to sell this agricultural product yesterday because they expected the price to grow more. “After last year’s harvest, the soybean price was €0.36/kg, so those who sold it right away a smaller profit at a price twice as low compared to the current one,” Mr. Janjic said, explaining why farmers were still hesitant to sell soybeans.
Serbia Grains Association Director Suncica Sakovic told the Beta news agency that the sudden rise in the soybean price globally was a consequence of investment funds and profiteers getting involved in the soybean trade. That is said to be due to the coronavirus pandemic and fewer opportunities to make other kinds of investments, as well as due to an increase in the price of cereals and oilseeds because of higher demand. According to Sakovic, be-tween September 2020 and April 2021, Serbia exported 142,000 tons of soybeans, and there is still 158,000 tons in stock.
Duopoly in Serbian sugar production
Sugar production in Serbia is characterized by a duopoly held by Sunoko, which accounts for 70-80% of sugar beet processing, while Hellenic Sugar accounts for 20-30%. These figures come from an analysis offered by the Serbian Commission for Protection of Competition (KZK) regarding competition in the country’s sugar and sugar beet market. The analysis was conducted because of announcements that certain sugar plants in Serbia would close down, but also because sugar beet-growing areas have been declining over the past few years.
Sunoko Group currently has sugar plants in Kovacica, Pecinci, Vrbas, and Senta, while Hellenic Sugar has plants in Crvenka and Zabalj. The quantity of sugar beet they bought in 2017 was 2.1 million tons, and it dropped to 1.16 million tons in 2019. The KZK added that sugar production had been halved for three years, going from 500,000 tons in 2017 to 250,000 tons in 2019.
The analysis shows that Serbian sugar plants export significant quantities to Hungary, Bulgaria, Bosnia & Herzegovina, North Macedonia and Albania, which have no such plants. It is necessary to at least maintain the current situation with the capacities and stop the trend of Serbian sugar plants disappearing, the KZK concluded.
Food prices increase on a monthly basis
Food prices mark a constant increase on a monthly basis. Serbia is no different. The pandemic, increases in transport costs and in the cost of raw materials are just few reasons for the increase of food prices. According to the State Statistical Bureau, increases in prices of food stuff in April 2021 was 2.6% compared to March 2021.
The index showing the trend of fluctuation of consumer prices shows that the prices of edible oils and fats increased by 14.5% in April y-t-y. Most of the prices of other basic food stuffs increased on a year-to-year basis, such as: the price of bread and cereals increased by 2%; milk, that of cheese and eggs by 1.9%; vegetables 4.5%; sugar, jams, honey and chocolate increased by 2.4%; between April 2020 and April 2021.
Western Balkan as a single investment destination
At a session of the Managing Board of the WB6 CIF - Western Balkans Six Chamber Investment Forum held in Belgrade last week, it was decided that the six countries in the region should present their joint economic potential together at large international events. According to the official statement, this refers to Expo 2020 Dubai, China International Import Expo (CIIE) in Shanghai, and the Western Balkans Summit in Berlin.
It was agreed upon that the six Western Balkan chambers of commerce should enhance their efforts aimed at attracting investment in order to use opportunities for developing the six regional economies in the post-Covid period as much as possible. Economic Chamber of Macedonia President Branko Azeski said the CIF would globally promote the region as a single market in the upcoming period. A special unit will be formed to attract investments and promote exports. According to their latest announcements, the CIF will also set up a regional online platform for supplies to include local companies in international corporations’ supply chains.
Small and medium sized enterprises contribute to profitability of economy
Last year, SMEs contributed the most to the growth of the overall profitability of the economy, because they increased their profits compared to the previous year by a third, with small businesses recording the most pronounced growth of profitability at a rate of 34.2%, according to the data of the Business Registers Agency (APR). According to APR’s figures, 106.111 companies operate in Serbia, out of which, 87% are micro-sized, 10.9% are small, 1.7% medium and 0.4% are large companies. The growth of profitability in medium business entities was accompanied by a growth of the number of employees by 19.239, whereas small business entities realized a better result with a reduction of the number of employees by 5.144. The biggest positive net result was generated by large systems, whose total profit increased 2.2% compared to the previous year, and these companies also recorded the largest growth of the number of employees, by 29.101. The consequences of the crisis most affected micro enterprises, which remained in the sphere of negative results, although their loss dropped 16.4% year-on-year, whereas the number of employees increased by 396 compared to the previous year.