Serbia Newsflash Week 39

Final harvest figures, raspberry production trends, agro market digitalization, a sugar beet campaign, coffee price rigging, and news from the Novi Sad fair - The week in Serbian agriculture

Picture of a farmer selling apples at a market
©Pexels
Starting in October a new market digitalization campaign will start at three green markets in Belgrade, promoting credit card and mobile payments.

How high will be the price of Serbian raspberries?

The President of the Association of Raspberry and Blackberry Producers in Serbia, Dobrivoje Radovic, stated for the economic news portal Biznis that this year's €3.8 per kilogram raspberry price is not very high. He stated that the forecasts say that the price of raspberries will soon range from €5.1 to €6.8 per kilogram, but only with adequate preparation and maximum use of certified planting materials.

The President of the Raspberry Association estimates that the price would be phenomenal if the yield were from 15 to 30 tons per hectare.

According to him, raspberry orchards in Serbia yield an average of about four tons per hectare, and there are several reasons for this: Firstly, climate change, secondly, a bad price trend from the previous period led to a drop in production and unprofessional processing, and thirdly, the regulation for certified planting materials to the point that manufacturers have raised the quality. “It turned out that there is a huge difference in yield in relation to the planting material used. With the same agro-technical measures, investment, treatment and spraying, certified planting materials lead to a yield of 30 tons per hectare, and non-certified to four tons”, Mr. Radovic stated.

Compared to 2020, when the foreign exchange inflow was between €160-200 million, this year it will amount €400-500 million on the raspberry foreign currency account. Dobrivoje Radovic stressed that everyone, from producers through subcontractors to workers, will benefit from a good price of raspberries.

Cashless payments of fruits and veggies at three green markets in Belgrade

As of October 1st, at three Belgrade green markets, payments via bank cards or mobile phones will be possible, announced the Chamber of Commerce of Serbia (PKS). This pilot project includes Kalenic, Djeram and Palilulska pijaca green markets, where a total of 50 POS terminals are being installed, which enable contactless payment with credit cards or via mobile wallet applications for Android and IOS platforms.

The market digitalization pilot project is being jointly implemented by the public company Green Markets, the Chamber of Commerce of Serbia, and the companies Mastercard, Banca Intesa, Payten and Chipcard, with the support of the City of Belgrade.

All tenants, mostly farmers, who have agreed to be part of the pilot project "digitalization of the markets", for the next 12 months will be exempt from all costs related to the use of POS terminals, and project partners have provided additional benefits - each month, five retailers who have the largest number of cashless payments with payment cards, will receive a cash prize in the amount of €100.

Sugar beet processing campaign has started

The company Sunoko has started a new campaign of sugar beet processing, and this year about 1.4 million tons of raw material from about 24,000 hectares of land and 240,000 tons of produced sugar is expected.

The delivery of sugar beet to their factories at three locations in Vojvodina has already begun, and all three sugar plants are working in their optimal capacity. Sunoco is sending a message that they will have another good season, regardless of challenges during vegetation period, especially due to potential damages during spring frosts and summer droughts.

The company’s trump card is the Research and Development Center, within which a scientific team works on solutions for getting better results and more productive output, on a daily basis.

“Our colleagues in the Raw Materials Department on the field made a huge effort, and together with our Research and Development Center, significantly improved, above all, leaf disease prevention. Also, this year we intensified our efforts in providing continuous education of producers, by which, with the producers who followed our production technology, we already managed to achieve the previously set goal for this year of gaining an average of 10 tons of sugar per hectare”, stated Slobodan Košutić, General Manager of Sunoko Company.

Harvest ending score: wheat up by 23.1%, maize down by 20.7%

Wheat production in Serbia this year amounts to 3.53 million tons, up by 23.1% y-o-y, while maize production is down by 20.7% to 6.24 million tons, announced the Statistical Office of Serbia (RZS).

Compared to last year, sugar beet production is expected to be 1.5% higher, while the production of sunflower and soybeans is expected to drop by 6.1% and 27%, respectively, the RZS said.

Compared to the ten-year average (2011-2020), the production of wheat is up by 35.9%, sunflower 8.4%, and soybeans 4.7%, while corn production is down by 0.7% and sugar beet production by 21.8%.

As for fruits, compared to last year, raspberry production went up by 10.1%, whereas sour cherry production dropped by 6.4%. At the end of the harvest season, apple production is expected to be up by 4.9%, while plum production is expected to be down by 29.1%.

Compared to the ten-year average, apple production should be higher by 22.3% and plum production lower by 8.2%. The expected production of grapes is 2.9% lower compared to last year and 3.9% lower compared to the ten-year average, the RZS noted.

What field with the backdrop of the setting sun
©Mika Luoma
The final tally at the end of the harvest shows that while wheat figures went up by 23.1% this season, the volume of the maize harvest dropped by 20.7%.

Coffee price rigging  

Having analyzed coffee price trends in the Serbian market over five years, the Commission for Protection of Competition (KZK) has commenced antitrust proceedings against Strauss Adriatic and the Atlantic Group to investigate the existence of restrictive agreements.

The KZK found grounds to believe that the above-mentioned companies, as the two biggest businesses selling ground coffee with at least an 80% share in the wholesale market, had concerted mutual business strategies regarding the prices of ground coffee in Serbia.

The Commission analyzed 2015-2020 price trends regarding the most widespread brands in the market, Doncafe Moment and Grand Gold (pack size of 200 grams). These producers themselves have said that global prices account for over 90% of the retail price in Serbia. The KZK adds that there was a continuous drop in raw coffee bean prices in 2017, 2018, and 2019. Although those prices hit their lowest level in the past decade in 2019, Serbian consumers could not see it in the retail prices.

“In the Republic of Serbia, there was no drop in the ground coffee price concerning the observed products, although that should have happened considering the major correlation between the raw coffee bean price and the ground coffee retail price,” the KZK concluded.

However, Secretary of the Association for Plant Production and Food Industry at the Serbian Chamber of Commerce, Mr. Aleksandar Bogunovic believes that ground coffee prices in Serbia could go up by 10% by the end of 2021.

Mr. Bogunovic explained that Brazil’s Arabica coffee fields were damaged by the frost in July this year, and transport costs for the Robusta variety from Vietnam have drastically increased. Ground coffee currently available in Serbian stores comes from the stock, but since global prices are higher by up to 90%, a price increase after importing is inevitable.  

According to Mr. Bogunovic, transport costs per shipping container have gone from $1,000 to $10,000 because of a massive rise in demand for container transport amid the economic recovery from the consequences of the coronavirus lockdown. He added that 200g of ground coffee would cost €2.3 -2.5. “It is quite certain that coffee prices will rise by at least another 5% next year,” the secretary added.

Coffee prices in Serbia have not changed for four years, although coffee excise tax has grown and now stands at 8.4%. Serbia imports around 30,000 tons of coffee on a  yearly basis, mainly from Brazil, the biggest producer of the Arabica variety in the world, supplying a third of the global market.

In addition to this variety, Serbia gets Robusta from Vietnam. Serbia also imports coffee from Uganda, Costa Rica, Colombia, Jamaica, and Indonesia.

88th Agricultural Fair in Novi Sad marked 20 years of cooperation between Serbia and the EU 

The 88th Agricultural Fair in Novi Sad marked the 20th anniversary of cooperation between Serbia and the European Union.

The focus was on food safety, while the goal of EU assistance is to improve all aspects of agriculture. The Ambassador of the EU to Serbia, Mr. Emanuele Giaufret stated that the joint efforts of the EU and Serbia have yielded important results: since 2019, no cases of rabies and swine fever have been detected.

The EU has supported the fight and eradication of these two dangerous diseases with over €20 million, through the procurement of vaccination campaigns, equipment and capacity building. "EU aid in the field of food safety will not stop there. We will provide the management of the National Reference Laboratories with the most modern analytical equipment. This institution is the centre of Serbian food safety laboratories, but it also played a vital role in the early stages of the COVID-19 pandemic, when most human samples were tested there with previously delivered equipment donated by the EU," said Ambassador Emanuele Giaufret.