Serbia: Impact of COVID-19 on the agro sectors

Serbia is facing the third wave of Covid-19 pandemic these days. The numbers of infected people rising fast (The cases tripled in the last ten days), but still, the situation is better than in the surrounding countries. The Government officials and the Crisis team will reconsider new restrictive measures if situation worsens. For the time being, stricter implementation of the current measures (2m distancing; masks in open and closed areas; banned gatherings over 30 people) is to be applied. If situations drastically worsens, it is likely that the gastronomy sector will be the first to experience more restrictive measures. For now, they are still operating until 23h00.

When looking back at the effects of Corona pandemic on the agriculture sector in Serbia, the impact is different on different sub-sectors. While the Corona pandemic pushed certain sectors to the verge of existence, to others it resulted in the increase of sales.

Positive impact on fruit and vegetables sales

In the first half of this year agricultural exports recorded an increase of 10.3% compared to the same period in 2019. Data of the Statistic Office of Serbia show an increase of exports of cereals of 9.8% and an increase of export of pome and stone fruits of 19.8%. In August 2020, frozen raspberries were the fifth most exported product from Serbia. In the same month the export value was 22.2 mil EUR. Serbian companies whose core business is sales of fresh fruits and vegetables are consentaneous that Covid-19 positively impacted consumption of fresh fruits and vegetables and they recorded increase in their business operations by 20%. The main export markets for these fresh items are Russian Federation, Czech Republic; Poland; Croatia and Italy.

Smaller fruit and vegetable producers and processors (different types of marmalades and traditional spreads) were mostly oriented towards domestic market and on-line sales. At the very beginning of this health crisis, in March 2020, individual vegetable producers (lettuce and other early spring veggies) were hit hard by closure of green markets and imposed lock down. Read more here.

Long term contracts with supermarket chains were definitely a blessing to producers of perishable goods at those times. Difficult times proved to be inspirational for alternative thinking and it resulted in a modernization of this conservative sector. Fruit and vegetable producers with the help of the Government officials and the society as a whole, turned to on-line sales. More on this here.

E-commerce still increases

The increase in E-commerce in the first month of pandemic went up for 400%. The pandemic has forced many people to buy groceries online for the first time, and the trend brought by Covid-19 for online stores, will change the way of shopping even after the crisis. E-commerce for books, clothes and electrical appliances were present before the pandemic. Ordering ready-made food through delivery apps were expanding even before the coronavirus crisis, but since the pandemic, e-purchase has recorded significant increase of customers and the habit remained. Supermarket chains and food shops still record the increase of more than 200% in e-purchasing of healthy snacks, fruits, vegetables, meat and all other groceries. It seems that cultural patterns of a society so fond of social gatherings and interactions are adjusting to the new normal.

The President of the Association of traditional products of Serbia said that at the beginning of crises honey producers experienced difficult business conditions due to the lock down and closure of open “green markets”. They encountered business losses but accommodated to the new circumstances on the market and newly established purchasing habits like online sales.

Negative impact on meat producers and processors; support for beef sector

On the other hand, this year was very difficult for meat producers and processors. Local gastronomy sector (hotels; restaurants, cafés) were restricted in their operations and that resulted in mass decrease in their business performance. This affected sales of meat products on the local market. Also, export of meat decreased that lead to oversaturated offer on local market and drop in price. In order to assist the farmers in animal husbandry, the Serbian Government made a decision that cattle fatteners can apply for another purchase subsidy at the Ministry of Agriculture until November 20. With this, the Serbian state provides support to producers for every kilogram of legally sold beef weighing more than 600 kilograms. For local meat producers, this help means a lot, as the number of small farms engaged in fattening cattle in the country is between 12 and 16 thousand. Such farms fatten an average of 5-6 bulls. Including large farms, about 220 thousand fattening cattle are produced annually in the country, of which 120,000 are usually sold abroad.  Read more here.