Serbia Newsflash, Week 35, 2022

Wine fair followed by the Summit of Open Balkan Initiative with food security and labor market agreement

The first international wine fair Wine Vision by Open Balkan was opened in Belgrade on September 1^st and will last until Sunday, September 4. A total of 360 exhibitors from 22 countries will take part in the fair. 160 exhibitors from Serbia, 26 from Albania, and 47 from North Macedonia will offer products at their stands. Exhibitors from Croatia, Montenegro, France, Chile, Argentina, Italy, Bosnia and Herzegovina, and other countries are also present. Since the fair is organized under the auspices of the Governments of Serbia, North Macedonia and Albania, as part of the Open Balkan initiative the officials of these three countries opened the fair.

The wine fair is followed by an Open Balkan Summit. Serbian President Aleksandar Vucic together with the Prime Ministers of North Macedonia Dimitar Kovacevski and Albania Edi Rama have signed an agreement on Friday, September 2, that will regulate cooperation in the field of food security. The two most important parts of that document will refer to guarantees that Serbia, North Macedonia, and Albania will have priority in the mutual exchange of basic foodstuffs so that the population of the three countries will have enough food in crisis situations, as well as mechanisms to prevent the re-exportation of food to third markets.

Marko Cadez, the President of Serbian Chamber of Commerce pointed out that the food security agreement shows that the Open Balkan Initiative is producing concrete results. Mr. Cadey said an agreement on a common labor market would be made operational after the Belgrade Summit [ . The only thing remaining to be done is ratification by the North Macedonian parliament, which is to happen in the days after the Summit, creating conditions for the implementation of the agreement to start, explained Cadez.

In addition to the leaders of the three countries, the Summit will be attended by the PM of Montenegro, Dritan Abazovic, the Chairman of the BiH Council of Ministers, Zoran Tegeltija, the Minister of Foreign Affairs, and Trade of Hungary Péter Szijjártó, and the Minister of Foreign Affairs of the Republic of Turkey Mevlut Cavusoglu.

Limitation of prices of basic foodstuffs extended to September 30

On August 30, the Serbian Government extended the price limit for basic foodstuffs until September 30. The Decree limits the prices of white crystal sugar, UHT milk, meat and chicken, flour, and sunflower oil.

The statement says that the Government approved an upward correction in the price of milk and white granulated sugar due to the increase in the price of raw materials. It is added that when it comes to consumers, the rise in prices will not significantly affect their standards nor will it affect the sellers of these foodstuffs since the margins have remained at the same level.

The maximum retail price of white crystal sugar in all packages must not exceed 0.88 EUR per kg, the maximum producer price of white crystal sugar in packages of 1 kg, 5 kg, and 10 kg must not exceed 0.72 EUR per kg, while the maximum producer price of white crystal sugar for all other packages must not exceed 0.80 EUR per kg. Also, the maximum retail price of UHT milk with 2.8% milk fat in a one-liter package is limited to 1.02 EUR the Ministry of Trade stated. The prices of other products are limited to the level that was valid before. The Serbian Government has also extended the limitation of the price of oil derivatives, which will now be valid until September 30. This means that the Government will continue setting the maximum prices of Euro premium 95 diesel and gasoline for the next month. The Government limited the price of fuel for the first time in March, and since then, every Friday until 3 p.m., it sets and publishes the highest retail price, which is valid for the following seven days.

The sunflower harvest is in full swing

The sunflower harvest in Serbia is in full swing after a short halt due to bad weather and heavy rains. In Banat region, where sunflowers are sown more than in other parts of Vojvodina, the crop has already been removed from individual plots. Due to the lack of rainfall, farmers started field activities with agriculture mechanization much earlier this than previous year.

Agriculture advisory services note that the situation with yield of sunflowers differs from area to area, depending on water precipitation in summer period. Farmers who sowed sunflowers a bit later have a better yields. Experts they say that although sunflower tolerates high temperatures better than other field crops, extreme weather conditions will certainly affect the yield of this oilseed.

One million tons of Serbian grain stuck due to low water level of Danube

Ministry of Construction, Transport, and Infrastructure confirmed that due to the low water level of the River Danube, around one million tons of Serbian agricultural products, with a total value of around EUR 1 bn, is stuck. As the Ministry informed daily Blic, there could also be a problem if there is not enough imported Euro diesel, stating that the National Oil Company (NIS) cannot meet the needs of the entire market.

The newspaper states that about 750 thousand tons of wheat and corn from Serbia have been sitting on barges on the Danube for 20 days, while artificial fertilizers and soy, raw materials used in production, are waiting for export. The newspaper also writes that around 1.25 mn tons of coal were trapped, as well as 30 thousand tons of oil and oil derivatives that had been sent to Serbia from the port of Constanta in Romania.

The Minister of Construction, Transport, and Infrastructure, Tomislav Momirovic, told the newspaper that navigation in Serbia has not been suspended in any part of the Sava and Danube rivers, but that there is a problem with the water level in Bulgaria, stating that Serbian machinery should help that country soon. “We have mobilized all the machinery, Government passed relevant decisions and we are still waiting for the Bulgarian side to adopt and sign an agreement so that our machinery can enter the neighboring country and carry out dredging works,” said the Minister.

Serbia exported 30,000 tons of ice-cream

According to data from the Serbian Chamber of Commerce (PKS), 30.000 tons of ice cream worth 63.5 mn EUR were exported from Serbia last year, mostly to the countries of the region.

“Serbia exports ice cream to markets in the region, the most to Bulgaria – 7,415 tons and to Greece – 5.351 tons. The United Kingdom is at the third position – 2,352.4 tons, and just a little less to Bosnia and Herzegovina - 2,246 tons,” stated PKS for Blic. As specified, 2,026 tons of ice cream were exported to Romania, 1,918 tons to Poland, 1,625 tons to Montenegro, as well as 1,530.9 tons to Germany. The least amount of ice cream was exported to North Macedonia - 1,255 tons, and to Croatia - 1,226 tons.

Ice cream production in Serbia in 2021 amounted to 42,114 tons, while a year earlier, it was 33,818 tons. In contrast to the export of ice cream from Serbia, the import into the country was significantly lower, but the data of PKS show that from 2016 to 2020, it is still on the rise.

According to PKS, 7.892 tons of ice cream were imported into Serbia last year, worth 20.8 mn EUR. The most ice cream was imported to Serbia from Germany – 2,169 tons and Croatia – 1,475 tons, the website Bilic reported.

Price of catering services increased by 12.3% 

Catering services were 12.3% more expensive in July compared to a year ago, reports the Statistical Office of Serbia. Food rose in price by 14%, with the highest price increase recorded for salads, 21%, followed by stews by 18.8%, and cold and warm starters by 14.6%.

The price of cakes increased by 14.5%, baked goods and meals to order by 13.1%, and bread by 12.2%. The price of alcoholic beverages also increased by 13.2% and non-alcoholic beverages by 12.1%, while the price in-crease at overnight accommodations rose by 6.2%.

Fitch Ratings Agency affirms BB+ credit rating for Serbia

In its report, the Fitch Ratings Agency affirmed the credit rating of Serbia at the level of BB+, with stable prospects for its further increase.

The report states that the credit rating is supported by a credible macroeconomic policy framework, a responsible and cautiously managed fiscal policy, and the growth of the gross domestic product, the Ministry of Finance stated. More at: Fitch Ratings affirms Serbia at "BB+" (LT Int. Scale (foreign curr.) credit rating); outlook stable (cbonds.com)