Serbia Newsflash Week 5, 2022

A Chinese agro investment on the horizon, new frontiers for foreign trade, fertilizer import slowly getting underway, African Swine Fever outbreak identified, shifting trade trends in macro figures, Open Balkan initiative underway, and a governmental commitment to stay GMO-free - The week in Serbian agriculture

Green meadow, tree branches.
Serbia's organic food exports increased by 93% over the past two years to a total $65 million a year.

Serbia remains non-GMO country, organic production great potential

Serbian Minister of Agriculture Branislav Nedimovic recently stated that Serbia had zero tolerance for the production of and trade in, GMO products and that it is fulfilling its potential by producing organic food.

The minister explained for the national broadcaster that organic production offered space for development of Serbia. Mr. Nedimovic said the Ministry of Agriculture had recently streamlined the procedures for conversion from conventional to organic food production.

Serbia's organic food exports increased by 93% over the past two years and now total $65 million a year. Germany is the top export market for Serbian organic food products with a 31% share, followed by the USA with a 13.1% share.  

Open Balkan initiative in practice

As members of the Open Balkan Initiative, the Ministers of Agriculture of Serbia, North Macedonia and Albania, visited the Ahold Delhaize distribution center in the vicinity of Belgrade last week where they participated in a presentation of the logistics and storage management.  

Serbian Minister of Agriculture Branislav Nedimovic explained the ajvar, which is being exported to Serbia from North Macedonia, can make it to the shelves of Serbian retailers the day after arriving. 

“Serbian meat directed to the EU market has been stored in warehouses at the border crossing with Croatia for five days awaiting laboratory analyses to be completed, since Croatia is an EU member state. When it comes to Serbia, North Macedonia, and Albania, that procedure is not in place anymore,” said Mr. Nedimovic.  “Due to agreement signed in Tirana in December 2021, there is no more waiting at the border for food,” the minister added.

The Minister of Agriculture of North Macedonia, Mr. Ljupce Nikolovski, stated that he witnessed what he had signed on in Tirana with the other two ministers, being put into practice and indeed being implemented. “There is no more waiting at border crossings, customs procedures have been shortened. An important step in the Open Baklan Initiative is the mutual recognition of laboratory analyses and certificates in exports-imports procedures, which will improve the business climate in the region,” Minister Nikolovski commented.

The Albanian Minister of Agriculture, Mrs. Frida Krifca, stated that in Albania, three laws are currently being amended which will enter the parliamentary procedure next week. After their adoption, Albania will also start implementing a simplified import procedure for food products, Mrs Krifca added.

Chinese corn processing plant in Serbia soon?

A China-based company is planning a large investment of €250 million in corn processing in Serbia, writes Sputnik. According to the site, negotiations are underway and the only thing Minister of Agriculture Branislav Nedimovic revealed a few days ago, is that investors intend to process half a million metric tons of corn a year, producing amino acids, starch and glucose.

A year ago, China presented its partners in seventeen Central, Eastern and South-East European countries, including Serbia, with the aim that in the next five years China would increase its imports of goods from the region to up to $170 billion, with an emphasis on agriculture and the agro-industrial complex.

Despite being a major maize producer, (the country is the 17th largest producer of maize globally), Serbia has exclusively exported this primary agricultural product as raw material, without trying to develop its own processing capacities. “Serbia could earn much more if it exported processed corn products like amino acids, starch, dyes, and thus appear as a serious competitor in the world market,” said the Head of the Maize Department at the Institute for Field and Vegetable Crops in Novi Sad, Goran Bekavac.

Maize production in Serbia ranges from 6.2 million tons to over 7 million tons and 3.5 million tons are exported annually.

The Serbian Minister of Agriculture said that negotiations are underway with two large investors for corn processing - one from Egypt and one from China. “Both are engaged in the processing of corn and the production of glucose, some syrups, and products for the pharmaceutical industry. These are the final premium products from corn. Their idea is to process about half of a million tons of corn,” Minister Nedimovic pointed out.

The minister added that his colleague, the Minister of Agriculture of Egypt had announced his visit to Serbia in March 2022  due to the realization of that investment. “It is great news because Serbia will no longer sell raw materials. Instead, the country will make a semi-finished product or a final product that has much more added value,” commented Mr. Nedimovic.

Fruit growing with IPARD funds

Using the EU funds for rural development, the factory Z.A. Fruit  from Valjevo, western Serbia, has modernized fruit processing, becoming one of Serbia’s largest exporters of frozen strawberries, raspberries, cherries and plums to the European market.

Z.A. Fruit is one of the largest processors and exporters of frozen fruit in Serbia. In order to maintain in the leading position, with the funds from the IPARD program, they bought a machine for the laser sorting of fruits, worth €357 thousand.

Saudi Arabia opening up its market for Serbian agro products

Saudi Arabia is opening its market for Serbian agricultural products, stated the Minister of Agriculture Branislav Nedimovic for the national broadcaster. Serbia will be able to export beef and lamb meat, milk, and dairy products to Saudi Arabia. "It has been confirmed that Saudi Arabia is opening up its market for Serbian agriculture products. Serbia has also signed an agreement with Indonesia, which will initially open up the possibility to export apple and maize,”  Mr. Nedimovic stated.

Corn plants with ears of corn on the cob.
Beeld: ©Franz W.
With new foreign investments on the horizon, Serbia has the chance the increase the average added value in its maize production.

Import of artificial fertilizers started, prices are dropping but the farmers are not satisfied

The decision of the Serbian Government to abolish customs duties on artificial fertilizers has already led to the purchase of the first quantities abroad, the founder and owner of the Elixir Group, Stanko Popovic, told the Tanjug news agency. “Certain quantities have already been bought from Turkmenistan and Uzbekistan, and they are on their way to Serbia. The Government's decision came at the right time because it has a positive effect on the price. A ton can be bought for €750 or lower, and up until three weeks ago, it was €950,” Mr. Popovic stated.

Given the fact that Serbia is completely dependent on the import of nitrogen fertilizers, customs import duty is 10% on urea (nitrogen fertilizer) unless it is imported from Russia in which case it is duty-free. “Importers from Serbia were previously directed mainly towards Russia, which, however, limited the export of all fertilizers last year due to the global shortage,” says Mr. Popovic, adding that, by abolishing the customs duty of 10% on other countries, the Serbian Government has currently eased up and enabled importers to buy urea on the broader market.

In the last five years, between 250 thousand and 300 thousand tons of urea has been consumed in Serbia annually, as well as 150-200 thousand tons of KAN and AN fertilizer. The entirety of the 450-500 thousand tons of fertilizer have been imported, says Mr. Popovic who comments that the Elixir Group produces NPK artificial fertilizers in two factories in Serbia, and with a production of 450 thousand tons, it mainly satisfies the needs of domestic agriculture.

Serbian farmers are not satisfied with the promises of state officials. Several hundred farmers drove their tractors through the city of Pozarevac to protest against high mineral fertilizer prices.

The farmers from the Branicevo District blocked traffic to show their dissatisfaction with the prices which they say have gone up by 300%.

The farmers are saying that the Minister of Agriculture had promised a cut in fertilizer prices during a recent visit to the district, but that the promise was only partly fulfilled. Minister Nedimovic said recently that sufficient quantities of fertilizer would be secured through imports and that farmers would get favorable bank loans to cover the expense. The farmers said that the protest was just a warning, adding that they would stage “a total traffic blockade” if the promises are not fulfilled.

African swine fever reported in southern Serbia

The presence African swine fever has been identified in a village in southern Serbia. The disease was diagnosed at a farm in the village of Orlja outside the town of Pirot, adding that the local authorities have set up a quarantine area with a radius of three kilometers around the village.

Pirot’s Assistant Mayor Vidojko Panajotovic said that the surrounding area in a 10-kilometer radius around Orlja has been declared endangered, including some villages in the Bela Palanka municipality.

Regional animal health control official Miroljub Marjanovic stated that the disease was spreading rapidly over the past week because farmers and hunters were not following the rules.

African swine fever was diagnosed in southern Serbia in October last year. The European Food Safety Agency (EFSA) declared Serbia a high risk country for ASF late in 2020.

Serbian export-imports figures for 2021

Serbian external trade in 2021 totaled €50.22 billion and was up by 25.5% y-o-y, with exports up by 26.8% and imports up by 24.6%, according to figures released by the national statistical office RZS.

Exports in the 12-month period were worth €21.62 billion and imports stood at €28.60 billion, resulting in a €6.98 billion export deficit that was up by 18.3% y-o-y. The export-import ratio was 75.6%, up from 74.3% in the same period the previous year.

The Vojvodina region accounted for most of Serbia's exports (34.8%), while the Belgrade region had the largest share of the imports (46%). External trade was the highest with countries with which Serbia has free trade agreements, and EU member states accounted for 60.3% of the total.

Germany was Serbia's single largest trade partner in the period, with exports to Germany worth €2.74 billion and imports totaling €3.77 billion. In December 2021 alone, Serbia exported goods worth €1.99 billion - or 26.5% more compared to the same month of the previous year - while imports stood at €29 billion, which is a 36.1% increase y-o-y.