Serbia Newsflash Week 46

The effects of COVID-19, Green Agenda, grain price increase, international trade news, Mini Schengen, food waste reduction - The week in Serbian agriculture

Photo of the Serbian landscape near the Tara mountains.
©Pixabay
COVID-19 kick-started a rural renaissance in Serbia. As city-dwellers flocked to the countryside to ride out the pandemic months, real estate prices in rural areas doubled and in certain cases, even tripled.

International Agricultural Fair in Novi Sad goes digital

This year, the International Agricultural Fair in Novi Sad will be held online for the first time ever due to the pandemic. All the programs will be available between December 14-18 on this platform for companies, institutions, and individuals. “This year, through the platform, the exhibitors will be able to present their company, products, and services, to highlight fair discounts and campaigns, directly communicate with the visitors and other exhibitors, as well as sell those products and be visible to the media,” reads the statement of the Fair. The Netherlands Embassy in Belgrade will be present with the “Orange Pavilion” and a webinar to present the tree year project that started in June 2020: “Dutch solutions for the soft fruit sector in Serbia”.

A year of collecting 1.000 tons of food waste to reduce the emission of CO2

The National Alliance for Local Economic Development (NALED) announced on November 9 that a one-year action of collecting one thousand tons of food waste has been launched in Serbia, with

the goal of reducing the emission of 750 tons of carbon dioxide. The project is being implemented in cooperation with EsoTron and the German Organization for International Cooperation (GIZ), as part of a development cooperation program with the private sector, funded by the German Government.

Common regional market to bring the region closer to the EU single market

On November 10, at the Berlin Process Summit in Sofia, a plan to create a common regional market was discussed by the leaders of the six economies of the Western Balkans (WB6). The Leaders of the WB6 also agreed on a Declaration on Common Regional Market (CRM)

(The Berlin Process is an initiative aimed at stepping up regional cooperation in the Western Balkans and aiding the integration of these countries into the European Union. It was launched on August 28, 2014, by the German Chancellor Angela Merkel.)

The purpose of the plan is to narrow the gap between the region and the EU and to bring the WB closer to the EU single market. The document "Common Regional Market – a catalyst for deeper regional economic integration and a stepping stone towards the EU single market" is an action plan covering the period between 2021 and 2024, created by the Regional Cooperation Council (RCC), together with the region's governments, the EU, CEFTA, Transportation Community and other partners.

The plan is in full compliance with the European Commission's Economic and Investment Plan, and is an integral part of the region's EU accession. The common regional market also includes a Mini Schengen initiative, providing for the free flow of people, goods, services and capital. The summit, as a part of the Berlin process in Sofia, was co-chaired by Bulgaria and North Macedonia. The official part of the conference was opened by the German Chancellor Angela Merkel, the EU enlargement commissioner, Olivér Várhelyi, and the RCC secretary-general, Majlinda Bregu. During the summit, the leaders of Albania, Bosnia and Herzegovina, Montenegro, Kosovo, North Macedonia and Serbia agreed on the joint Declaration of the Berlin process. More  information is available here.

European Investment Bank supports WB

The European Investment Bank has welcomed the dedication of the WB to the Green Agenda, confirmed during the video-summit of the Berlin Process. As the EIB’s announcement reads, the EIB also supports the Economic Investment Plan announced by the European Commission by focusing on connection and sustainable green and digital transition towards an integrated regional market. “As part of the financial package for the region worth 1.7 billion euros, passed in May as a response to the pandemic, the EIB has already mobilized more than a billion euros to solve the negative consequences of the Covid-19 crisis,” the announcement reads.  Read more about this here

Close-up picture of harvested wheat grain
©Pexels
As demand rose on the global markets, grain prices in Serbia also increased in the season.

Grain prices on rise

In the past weeks, there has been an unprecedented demand for maize and wheat in Serbia, which has led to significant price increase. The prices of the two most important cereals rose by no less than 10% in a week. In a one-year period (October-October) corn prices rose by 36%. Currently,  €0.16/kg  is the price for maize before tax, and €0.18/kg for wheat. The price of soybeans is also high, €0.39/kg. At the same time, turnover also increased significantly, stated  the Director of the Novi Sad Commodity Exchange. As he explains, demand significantly exceeds supply. In his view, this phenomenon is due to the high price of these crops on the world market. At the same time, it is rare that a country has a significant surplus of these crops at a time when there is a huge demand for them on the world market. It would have been difficult to predict the price increases earlier. He explained that  producers who are now selling their crops are doing well. 

The President of the Serbian Grain Association believes that the rise in grain prices has been caused by an increase in global demand for key foods. China, several Middle Eastern and African countries also bought significant quantities of cereals in recent weeks in order to replenish their reserves for possible times of need. As he said, no one can estimate how long the epidemic will last and whether price increases will continue. According to the President of the association, the rise in the price of wheat will mean that the area used for bread wheat growing in Serbia will increase again this year despite the fact that the optimal sowing time for wheat ended on October 25. While decades ago, one-third of the arable land in Serbia produced cereal, today wheat is only sown on about 550 to 650 thousand hectares.

The entire quota for duty-free import of wine from the EU is used by two importers

In June, the retail chain Lidl imported 140 trucks’ worth of duty-free wine from the EU, reports daily Vecernje Novosti. That is 70% of the overall annual quota, and the rest was used up by another importer who bought cheap wine in Romania and turned it into rubbing alcohol, confirmed the President of the Trade Sector at the Serbian Association of Employers. This behavior created a disturbance in the market. According to him, the quantity of 2.5 million liters of wine that can be bought duty-free based on the Stabilization and Association Agreement between EU and Serbia was sufficient for all participants in the supply chain in the past. Now, importers of spirits have higher expenses because they need to pay customs duties on wine, underlined the President of the Association. “Sales have declined by over 40%, big stores are unhappy with lower turnovers, and at the end of the day, consumers are affected the most because they now have to pay 5.5 for a bottle of wine that used to cost 4.2” he explained. He suggests that the quota regarding the duty-free import of wine from the EU should be defined to suit all market players, and large retail chains and wine processing plants should be exempted from that.

Increased demand for real estate in rural areas

Since the beginning of the COVID-19 pandemic the highest percentage of infected was among people living in urban areas. Also, imposed lockdowns at the beginning of  pandemic made city-dwellers search for more comfortable places where they could ride out the pandemic. This resulted in the doubling and sometimes tripling of prices for rural weekend houses. Small cottages with a garden on a slope of a hill near a river are going through a renaissance. People living in apartment blocks have been leasing and buying cottages all over Serbia. The idea is to get out of the centers of infection but also to enjoy a clean environment and get in touch with nature again. According to the latest data, twice as many holiday homes have been sold in Serbia this year compared to the previous one.