Serbia Newsflash Week 36

Agriculture census in the second half of 2023

Members of the National Assembly of Serbia continued discussing several legal proposals, among which is the Bill on the Census of Agriculture in 2023. Minister of Agriculture Branislav Nedimovic explained that the census of agriculture, which is planned for the second half of 2023, will give a comprehensive overview of where Serbian agriculture is right now compared to 10 years ago, and that it will make assessments easier for decision makers in the future, because the data will correspond to the real situation.

Per the bill currently on the floor, a new collection of data on agriculture would follow in the second half of 2023. The census will cover all family farms, farms of entrepreneurs and legal entities, and will not include households with their own agricultural production that is not intended for the market, as well as households, companies and entrepreneurs who do not perform agricultural production.

Cooperatives’ land assets blocked for years

In Serbia, the Law on Cooperatives has locked down around 1% of the total agricultural land, estimated to be worth over €626 million in total, reports Biznis&Finansije. According to data by the National Alliance for Local Economic Development (NALED), since the 1990s, local self-government units have received 163 requests for the return of property acquired by legal entities.

The requests refer to 59.520 hectares of land in total. Local self-government units in Vojvodina have the largest number of requests and the biggest square footages covered by them (90 requests covering 55.467 ha of land).

According to the Cooperative Union of Vojvodina (ZSV), out of 140 old agricultural cooperatives founded in the 1950s, 25 are still in the process of resolving the status of their property although they started the procedure in the 1990s. These delays have caused huge damage to the cooperatives, even to those whose procedures have been completed, as they lasted for 15-20 years or even longer, the ZSV points out. On average, one request for the return of property to co-operatives refers to land worth some €3.5 million, highlights the magazine.

Raspberry and blackberry yields halved

The President of the Association of Raspberry and Blackberry Growers in Serbia, Mr. Radovic said that this year’s raspberry yield was at least 50% lower than average due to bad weather, frost, and drought, adding that blackberry production was halved, as well.

“In Arilje and Ivanjica, the biggest raspberry farming region in Serbia, the harvesting of autumn-fruiting raspberries is almost over, and the yield will be 50% lower compared to the average yield of some 82 thousand tons. At the end of the harvest, there will hardly be more than 40.000 tons,” Radovic stated for  Beta news agency.

The association head also added that the average wholesale price of most raspberry varieties was €3.5-3.6 per kilogram. The only exception is the variety of the highest quality, which is still being harvested, sold at €5.1-5.9/kg. Apparently, although the raspberry price this year is high, it cannot fully cover production costs and losses arising from the weak yield. Mr. Radovic stressed that the total raspberry harvest yield in Serbia in 2022 would be even lower because this year’s high temperatures and droughts had a very negative effect. He believes raspberry growers should use the Serbian Economy Ministry’s offer regarding raspberry planting material subsidies so that their farms can be restored using high-quality raspberry seeds.

Soybean prices rises, wheat price close to corn price

Last week was marked by a rise in the prices of all primary agricultural products, especially soy-beans, up by 11.6%, as well as the wheat price getting closer to the corn price again, announced the Novi Sad Commodity Exchange. Futures contracts for soybeans involved predetermined prices ranging from €0.65 to €0.68/kg (without VAT), while the weighted price was €0.67. Wheat was the most sought-after product, with futures contracts involving a price of €0.20-0.21/kg (excluding VAT).

The weighted price was €0.21/kg (excluding VAT), a rise of 3.07% w-o-w.

The corn price was up for the second consecutive week, the lowest end of its range was €0.21 EUR and the highest, the price registered on the last trading day, €0.22/kg (excl. VAT). The average price last week was €0.22 EUR/kg (excl. VAT), a rise of 2.74%.

The weather conditions delayed sunflower harvesting, and all sales of sunflower seeds went at a single price of €0.47/kg (excl. VAT), i.e. €473 per ton. The total volume of commodities traded on the exchange last week was 2,850 tons, up by 23.34%, and the value of the turnover recorded a rise of 12.78% w-o-w.

Protest march in Belgrade against pollution

Thousands of citizens gathered for a protest walk in the Belgrade city center organized by the informal group of citizens “Eco Guard” due to air pollution in Belgrade and Serbia. The protest was organized due to, as the organizers state, "the dramatic situation with air quality in Serbia and the non-reaction of the competent authorities." People gathered because they want cleaner air and because the previous protest did not contribute to improvement in terms of air quality. The demands of the protestors were that the citizens be informed in a timely manner as soon as a problem occurs, that the authorities issue public information and instructions, and that kindergartens and schools be given adequate instructions.

Fitch Ratings Agency affirms Serbia’s credit rating at BB+ level

In its latest report, the Fitch credit rating agency has affirmed the credit rating of the Republic of Serbia at BB+, with stable outlook. Keeping the same credit rating confirms that the Republic of Serbia has managed to maintain the stability of its economy, a strong financial sector, good export results and saved jobs. Fitch Ratings says that inflation in Serbia in the past seven years amounted to 2% on average, which is lower than the level of inflation in countries with a similar credit rating.

Considering the total macroeconomic framework and current and projected trends, it is expected that inflation would remain at low and stable levels in the coming years. It is said that the banking sector remained stable during the pandemic, with high liquidity, dynamic credit activity and further drop of the NPL ratio to 3.6% in June this year.

The agency stresses that financing conditions have improved, with the inclusion of three benchmark bonds in the JP Morgan Emerging Market Index, which includes bonds of developing countries. The report says that the public debt will not cross 60% of the GDP this year, and that its share will gradually decrease in the next two years. The Fitch Ratings agency particularly stresses that FX reserves, which were at €14.6 billion at the end of July, are €1.1 billion higher compared to the end of 2020. The report also underscores the expectation that the current account deficit of the balance of payments will continue to be completely covered by a net influx of FDIs, just like in the past six years.