Serbia Newsflash Week 22, 2022

Sugar prices limited, export of wood banned

Last week, the Serbian Government limited the maximum retail price of crystal sugar at €0.76 per kilogram, in all packages. Furthermore, the maximum producer price of granulated sugar [SZ1] was limited for packages of 1 kg, 5 kg, and 10 kg, and it must not exceed a price of €0.62/kg, and the maximum producer price of granulated sugar for all other packages must not exceed €0.69/kg, the Ministry of Trade stated.

This decree was passed in order to properly supply the market and prevent deviations in price formation, the statement reads. The decree will be in force for the next 150 days. The decision on the temporary ban on the export of “wood assortments of great importance for the Republic of Serbia” for 60 days was also adopted. This decision was made primarily due to the enormous increase in the price of heating pellets, which have gone up from last year's €200 to more than €300.

“Due to increased exports in previous years and higher demand, the shortage of these assortments has mostly affected pellet and firewood producers,” the statement said.

At the government session on May 26, it was decided that the temporary reduction of excise duties be extended [SZ2] on leaded and unleaded gasoline and gas oils until June 30.

Drought to reduce wheat yield by up to 30%

Tropical temperatures [SZ3] and a lack of soil moisture in May will reduce the yield of wheat in Serbia by about 30% compared to last year, said Miroslav Malesevic, an expert for field crops. Mr. Malesevic [SZ4] explained to the Beta news agency that even if it rained immediately, it would be too late for wheat at this point.

“The yield of wheat will be reduced by about 30% compared to last year’s harvest, which was good, reaching more than five tons per hectare,” said Malesevic. The expert added that an average yield of around 4t/ha can be expected this year and that the total yield in Serbia will be around 2.5 million tons, which is below the previously projected 3.5 million tons.

Malesevic said that this year, the yield of this particular crop was influenced by two unfavorable factors, drought and a lack of mineral fertilizers, so wheat could not mature properly. Unfortunate weather conditions with a tropical temperature of over than 30°C for five days in a row, and in addition, without rain, contributed to the development of pests.

The expert also commented that, due to the accelerated ripening, the harvest of barley will start on June 10, and the harvest of wheat, around June 20. The President of the Independent Association of Farmers of Serbia, Jovica Jaksic, said that the drought had done great damage to oilseed rape, the yield of which last year was 3.5 tons per hectare, adding that corn, soybeans, and sunflowers still resist the drought.

Raspberry exports declined by 30% 

In the first four months of this year, raspberry exports were about 30% lower than the average of previous years. This was said at the meeting of the Group of Producers of Fresh and Frozen Fruits and Vegetables of the Serbian Chamber of Commerce.

Data from large export markets, primarily in Western Europe, where Serbian raspberries are mostly sold, show that sales of raspberries in supermarkets decreased by 20-30% compared to the same period last year and the year before it.

The main reason is the high retail price, which is a consequence of the high purchase price of fresh raspberries in last year's harvest. It was pointed out at the meeting that the purchase price of fresh raspberries is usually 50% to 60% of the retail price. However, last year there was a drastic increase in the share of the purchase price in retail to as much as 87%, which greatly hindered the stable and competitive operation of processors and their competitiveness in the market.

Growers in Poland expect a solid yield of raspberries, about 10% higher than last year, and despite the current crisis in Ukraine, yields in the country will also be good, it was stated at the meeting. Exporters pointed out that the upcoming season will be a great challenge for Serbian exporters of berries, due to rising prices of electricity, transport, labor, and other costs. Losing traditional buyers due to high prices is also a challenge.

Serbian food industry at PLMA trade show in Amsterdam 

Serbian companies from the food industry sector have once again, after a two-year break due to the coronavirus pandemic, presented their offer at the PLMA International Trade Show in Amsterdam, which was held between May 31 and June 1.

The Serbian Chamber of Commerce (PKS) and the Development Agency of Serbia (RAS) are organizing an export offer for 28 companies at the National Stand of Serbia. “For our companies interested in exporting under private labels, this fair is a chance for new contacts, a good opportunity to enter the world's leading supermarkets – retail chains, and thus to increase export operations,” said Zorana Delic from PKS.

The Amsterdam International Trade Show gathered around 15 thousand global retailers representing supermarkets, hypermarkets, discount stores, department stores, and pharmacies, as well as importers, distributors, consultants, sales agents, and packaging and design experts. A total of 2,500 exhibitors presented themselves at the event with 50 national stands.

E-commerce steadily increasing

E-commerce in Serbia is constantly growing and its contribution to commerce as a whole has reached 15% to 20%. This was said at the panel called “Online Shopping as an Everyday Thing”.

There are currently about four million consumers in Serbia who have already purchased goods online. The annual turnover in e-commerce of the five largest retailers in Serbia reached €100 million, which is almost twice as much as two years ago.

The number of transactions, as it was said on the panel, increased by several hundred percent. The growth of online shopping in the last two years has been mostly influenced by the health crisis, caused by the coronavirus pandemic, which has changed the habits and behavior of consumers.

The President of the E-commerce Association, Zorana Milidrag, pointed out that a legislative framework for secure electronic payments had been created in Serbia before the pandemic, but that it was necessary to continue working on educating both buyers and sellers so that everyone would be more satisfied because “buying from home” saves both time and money.

Ahold Delhaize e-commerce Manager Milana Majkic said that due to the increase in e-shopping, the company plans to open a large MAXI facility exclusively for online purchasing next year. The contribution of e-commerce to the total sales of Ahold Delhaize is currently 1% while the goal is to reach 5% next year and to have constant growth.

New five-year partnership plan between Serbia and the World Bank

Last week, the Board of Directors of the World Bank (WB) adopted a new five-year Partnership Program with Serbia for the period from 2022 to 2026, which focuses on greener and more sustainable growth.

The goal of the program is to support the strengthening of Serbian institutions in order to achieve a strong recovery after the pandemic, accelerate fiscally and environmentally sustainable economic growth, and encourage the inclusive provision of public services, the WB Office in Belgrade said.

The support program envisages $1 billion in funding. It will provide support for connecting Serbia with other economies in the region, increasing productivity and competitiveness, and strengthening human capital. “Strengthening institutions, a gradual transition to a low-carbon economy, and human capital development are key elements of a resilient recovery from the global pandemic,” said Nikola Pontara, Director of the WB Office in Serbia. The program enables the realization of maximum effects of the WB Group activities, the statement adds.

In cooperation with the International Finance Corporation (IFC) steps will be taken to improve the business environment, capital market development, and public-private partnerships. The Multilateral Investment Guarantee Agency (MIGA) will continue to provide risk insurance services and guarantees for promoting investments abroad, it is specified in the statement.

Serbian government introduces new measures to help the economy

The Serbian government approved another €500 million in aid to the economy and extended the deadline for loans under its pandemic aid measures to July 31.

A press release stated that the latest support measures are directed at some 1,400 companies, providing them with an opportunity to use government loan guarantee schemes to refinance debts. “The state recognised the need to approve an additional €500 million in aid, in order to maintain liquidity, and thus the total amount of funds placed through the first guarantee scheme reached €2.5 billion. At the same time, the deadline for issuing loans has been extended until July 31, 2022,” a press release said.