Bulgaria Newsflash Week 14, 2022

Bulgarian grain market: Quō vādis

Before the critical month of April, the forecasts of the Centre for Agri-Policy Analyses for the grain harvest were for 5.2 t/ha for wheat and 4.9 t/ha for barley. The forecast was also for harvested maize fields in 2022/23 to drop to 580,000 ha. According to Agriculture Ministry data on land use in 2021, sown fields contracted to 634,000 ha. In the past three-four years, maize fields increased by some 20-25% but regardless of the favourable prices some of the land which is now under maize will likely be turned into sunflower plantations because of the smaller investment this crop requires.

The harvested sunflower fields are expected to stay over 840,000 ha. The significant increase in prices and the expected dramatic decrease of production in Ukraine, which is traditionally the largest exporter, will encourage developments in this direction.

The average yield for rapeseed this year is expected around 2.7 t/ha and the total output in 2022-23 is forecast at 375,000 t, which is close to the 2021 level.

The forecasting of market prices becomes increasingly departed from the fundamental factors. Prices here gained some 20% in a month alone reflecting the situation on global markets.

Cucumber prices up by 100% in a year

Official statistics shows a persistent year-on-year increase in the price of staple vegetables as of the end of March 2022. Imported cucumbers have increased by 100%, Agri reporters quoting the latest operational analysis of the Agriculture Ministry. A closer look at the figures identifies a significant increase in the price of cabbage (75.3%), potatoes (45.9%), imported tomatoes (54.2%) and locally produced greenhouse cucumbers (53.9%). The going price of local greenhouse cucumbers is higher than the imports (BGN 4.14/kg vs. 3.30/kg as of March 25) but there is a downward trend on a weekly basis. We get the reverse picture for tomatoes. Imported tomatoes are headed downward and locally grown greenhouse tomatoes up by close to 13% and a price of BGN 3.67/kg.

Bulgarian cooking oil market: 15 big players

Panic  buying, overstocking, people fighting in supermarkets. This is a snapshot on the Bulgarian cooking oil market in March 2022. What caused that is the war in Ukraine and fears that the absence of a key supplier on the market will cause a shortage in supply. And, indeed, the global markets saw the price of sunflower and cooking oil go through the roof briefly and the panic did not spare Bulgaria, reports Capital daily. Right now, however, panic does not seem justified. Bulgarians consume some 100,000 t of cooking oil a year. It is one-eighth of the domestic production. Some 500,000 t are exported every year. Even though the register of the Bulgarian Food Safety Agency shows 109 companies that process and/or bottle plant oil, there are some 15 large and medium-sized producers and their production is predominantly export-oriented. The top producer is Oliva, which does not produce for the domestic market. The key players on the local market are Klas, Papas and Biser Oliva. Their financial reports in the recent years show an upward trend in their business and aggregate revenues at over BGN 2 billion and profit of BGN 90 million.  

The government vowed to control excessive pricing through its control bodies. A ban on export is not planned. In 2021 the sector exported sunflower oil and refined oil for over BGN 1 billion, and the domestic market is equal to half of this amount.

A glass of Bulgarian milk: more expensive for sure

The forecasts of the Centre for Agri-Policy Analyses for cow’s milk production in 2022 is that it will be around 855,000 t and for sheep milk at some 70,000 t. The challenge for the diary sector is the increasing prices of feed, which makes up most of the production costs in the sector, paired with the pressure to keep down purchase prices in order to prevent significant increases in the consumer price of finished products. The increase in the purchase price of cow’s milk as of February 2022 was 13.4% on-year. The official statistics for the price of costs in the last quarter of 2021 compared to the same time a year before shows an increase of 30% for electricity, fuel and others; 18% increase for animal feed; and a 1.7% increase for veterinary products. Animal husbandry has become a collateral victim of the Ukraine war, experiencing a considerable increase in costs and worsening profits of farms.