Serbia Newsflash Week 35
COVID-19 news, improving agro export figures, Dutch investments, dairy subsidies, organic farming numbers, the situation of the domestic market - The week in Serbian agriculture
Serbia remains on the green list for travels into the EU
The EU Council updated the list of countries whose citizens can travel to the EU without limitations. Serbia remained on the green list, but Montenegro, North Macedonia, the US, Israel, Lebanon and Kosovo have been removed from it. The announcement of the Council says that member states could cancel temporary limitations for non-mandatory travels in the EU for completely vaccinated passengers. As it was said, the list will be regularly updated.
Agriculture exports up 13.6% in the first half of 2021
Excellent prices of agro products, but unfavorable weather conditions and lower yield marked the situation in agriculture this year. That is how the Minister of Agriculture assessed the situation in agro sector.
"There were high expectations in April and May, but we will still end the year as before - the same gross domestic product in agriculture. I expected further increase in June, but the July drought did not allow it," the minister said. He did not hide his enthusiasm for this year's fruit prices. "Raspberries reached €3.4/kg, some say they sold for more, blackberries were even better than last year, plums are not bad," said the minister and specified that for plums this year might be €0.5/kg.
In the first six months of 2021, the Serbian agriculture and food industry sectors registered a trade turnover of €3.1 billion, which is an 11.7% increase y-o-y, announced the Chamber of Commerce and Industry of Serbia (PKS). Exports in the sector were worth €1.98 billion, rising by 13.6% y-o-y and accounting for 19.6% of overall exports of goods.
Imports were worth nearly €1.12 billion, growing by 8.4% y-o-y and accounting for 8.6% of the overall imports of goods. Trade in agriculture and food products saw an €859.4 million surplus, which is a 21.1% increase y-o-y.
The import-to-export ratio was 177%, up from 169% in the first six months of 2020. Serbia’s top agriculture export products in the first half of 2021 were maize (€298.9 million), frozen raspberries (€137.4 million), wheat (€91.1 million), cigarettes containing tobacco (€88.5 million) and smoking tobacco (€86.4 million).
On the import side, the top goods were bananas (€35.1 million euros), various food products (slightly over €55 million), unroasted coffee (€22.1 million), cigarettes (€19.7 million) and pork (€18 million).
The biggest investors aren’t necessarily the biggest countries
Contrary to popular belief that investments in Serbia come from the biggest countries, the according to last’s years foreign investment data by the National Bank of Serbia, the Netherlands invested the most in Serbia, an amount of €705.5 million, which is more than the combined investments from China, the United States, Russia and the United Arab Emirates. According to the data, in 2020, Serbia was in the third place among economies in transition in the influx of foreign direct investments. The only other countries with a higher annual rate of foreign direct investments were Russia with $9.7 billion and Kazakhstan with $3.9 billion.
80 local products available in Lidl shops
Lidl Serbia unveiled a new brand called “S Ljubavlju, Domace” (With Love, Domestic Products). It refers to some 80 products from domestic suppliers. As of the end of August, the products can be found in 30 Serbian cities’ Lidl stores only.
Lidl’s new brand was presented at a panel discussion on why it is important to improve product quality and production standards. The Serbian Minister of Agriculture also participated in the discussion. “For years, there has been talk about a lack of Serbian products on the shelves. This is the ideal way to change the opinion of the few people who do not believe the situation is different nowadays,” the Minister stated. Lidl Serbia General Manager Mr. Sapina said that the company had invested €390 million in Serbia thus far, adding that “S Ljubavlju, Domace” was one of the ways to fulfill the promise to invest in local businesses. “With this new offer, we help the development of Serbian producers. By cooperating with us, suppliers have a guaranteed placement of products in more than 50 Lidl Stores. They are also preparing for the possibility of exporting products to competitive foreign markets,” Sapina noted.
Ministry talks with dairy producers and retailers about the milk price
Last week the Serbian government initiated the procedure for increasing the milk premium from €0.05 /l to €0.08/l, a rise of 40%. The rise will refer to Q3 and Q4 2021 and beyond, with the implementation starting in September.
The Minister of Agriculture stated for Tanjug TV that the situation in dairy cattle breeding was extremely unfavorable due to high animal feed prices. There is also pressure due to milk imported from the EU based on the 2009 Stabilization and Association Agreement with the EU, the Minister added. He said the state was also talking to supermarket chains and dairies to see what they could do in addition to the state measures.
The Minister expects dairies to offer an additional price increase. He explained that he had a meeting with dairies, and they are willing to offer some proposals about raising the milk price in the upcoming days. “The week after, the Ministry will meet with supermarket chains to see how to prevent the increase from affecting buyers too much,” Minister explained. According to him, “the entire chain must be considered, and there cannot be a drastic increase in the final product price because it could lead to lower milk sales, which is also not good.”
Serbian ice cream production and export on the rise
Over the past few years, ice cream production in Serbia has been growing, and according to data offered by the Serbian Chamber of Commerce (PKS), a notable rise was recorded in 2019 (+51% y-o-y).
That year, Serbia produced 33.875 tons of ice cream, while in 2018, it produced 22.313 tons. Last year’s production came close to the record-breaking year of 2019 as it reached 33.818 tons. Previously, Serbia used to produce slightly over 20.000 tons, according to PKS. For example, ice cream production totaled 20.202 tons in 2016, 21.445 tons in 2017, and 22.313 tons in 2018.
As the production grows, so do exports. Last year, Serbia exported 22.230 tons of ice cream, a threefold increase from 2016. The largest quantities go to other countries in the region, mostly Bulgaria, Greece, Montenegro, Bosnia & Herzegovina, and Croatia. Serbian ice cream is also exported to the UK, Germany, and Spain. Apart from large ice cream factories Frikom, Froneri Adriatic, and Swisslion-Takovo, which produce the largest quantities and employ some 2,000 people, ice cream in Serbia is also made by around a hundred small craft producers.
Serbia has 24 thousand hectares of land farmed organically
Over the past few years, more and more farmers in Serbia have been opting for organic production, stated Serbian Minister of Agriculture. He added that Serbia had a total area of 24 thousand ha of land farmed organically. In his opinion small parcels could generate the most profit if they shifted to the organic fruit production. According to him, that is profitable nowadays since organic food is not in high demand in the west only, but virtually everywhere. “All areas above 200 m above sea level in Serbia can easily be converted into organic agricultural production, making a much bigger profit since those parts have never had any chemicals,” the Minister pointed out.
Serbian media reports that the richest Slovenian couple, Iza and Samo Login, who own Out-fit 7 (the creator of the hit app Talking Tom) – have become the owners of several thousand ha of land in Banat District of Vojvodina. Serbian Minister explained they want to establish organic agricultural production on 3,800 ha. It will be the largest organic agricultural production platform, in Europe as he believes.
Prices in Serbia raised by small market and lack of competition
Daily “Danas” reports that it’s not an accident that Serbian consumers flock to Hungary to buy technology and electronic devices, or that bags full of clothes are brought in from Turkey and gas is routinely bought in Bosnia.
It is not difficult to guess that the reason is the difference in prices, so some are looking to pay cheaper, while others are looking to make money by reselling the items. This has officially been confirmed by the price index for 2020 published by Eurostat, which notes that some categories of products are more expensive in Serbia than in surrounding countries, but also some Western European countries.