Serbia Bans Exports of Staple Foods and Caps Petrol Prices

On Thursday, March 10, the Serbian government introduced a temporary ban on the export of wheat,  maize, wheat flour, groats and sunflower oil.

The Government has commented that the reason for the decision was to react in a timely manner to market disruptions and increased market demand both on the domestic as well as the international market.

Two days ago Serbian President Aleksandar Vucic stated that there was enough food and oil in the country and that there was no need for panic buying. At the same time President Vucic added that the main reason for the export ban on wheat and flour from Serbia was an increased export demand.

At the beginning of the week, on March 7,  there was a intent by traders to export 200.000 tons of wheat. The President pointed out that the export of edible oil increased by 109% in three days.

As Mr. Vucic explained, the Serbian Government would monitor the situation on the market and would assess whether there was enough wheat for the domestic market, but also for the region. The President also noted that 800 thousand tons of wheat and 1.5 million tons of corn were in silos, but that these figures are currently being double-checked.

Meanwhile in Hungary - The Hungarian government has also introduced an export limiting measure (which is not a blanket ban like the one implemented by Serbia but a control policy) as a reaction to cereal prices rising rapidly following the outbreak of the war in Ukraine. Read more about the details of the Hungarian policy here and about the reactions of the domestic stakeholders here.

The Association of Mill, Baking and Dough Industry of Serbia (Zitounija) has sent a request to the Ministry of Agriculture and to the Chamber of Commerce of Serbia, requesting for flour to be exempt from the export ban on. “The export of flour should in no way be banned. There’s plenty of it, we don’t know what to do with it” said the president of the association, Zdravko Sajatovic.

Mr. Sajatovic added that the wheat stock should be inspected and if quantities are found insufficient then while keeping the export ban in place, the implementation of quotas should be considered, because the harvest is to start in four months.

Experts propose that the Serbian Government should introduce quotas as a solution that would benefit the economy, farmers, and the state, instead of a complete ban on the export of wheat, corn, flour, groats, and oil. The proposal includes the introduction of a monthly quota system which would be in compliance with existing export contracts.

As stated by the Serbian Chamber of Commerce, the same request was sent to the Government for the producers of cooking oil, with the explanation that due to the war in Ukraine, the price of cooking oil in the world increased from €1.200 to €2.000 per ton.

There is significant pressure from European traders to buy oil in Serbia, at a price that is up to three times more than the price on the domestic market, where it was limited by the Decree of the Serbian Government, PKS pointed out. There is enough refined cooking oil in the reserves to last until the next harvest, PKS stated and assessed that the ban on the export of cooking oil could cause serious financial problems for Serbian producers.

The Director of the Serbian Grains Association, Suncica Savovic, said that there were no that would suggest an impending wheat shortage in Serbia due to the loss of the two largest exporters, Ukraine and Russia.  

Ms. Savovic specified that Serbia has 1.2 million tons of surplus wheat. After last year’s almost record-breaking harvest, there was around 3.7 million tons of wheat in the country and the domestic consumption does not even reach 1.7 million tons annually, which means that the surplus for export is more than 2 million tons. 830 thousand tons have been exported until the end of February.

The Serbian Government adopted a decree capping the prices of two petrol products, eurodiesel and euro premium BMB 95 petrol, over a period of 30 days, from March 11 until April 11. During this period, the prices will be adjusted every Friday by 3 pm.

The price for farmers will remain the same as today, €1.51 per liter. The government also adopted a decision on a temporary 20 pct reduction of excise duties on leaded and unleaded petrol and gas oils.

The full text of the degree (in Serbian) of the temporary ban can be found here

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