According to the Serbian Ministry of Agriculture and wheat experts in Serbia, total wheat production of 1.96 million MT in MY11/12 will be sufficient for domestic needs.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
GAIN Report Number: RB1114
Wheat Crop Update
Grain and Feed
In the week of July 18th most of the Serbian farmers completed this year wheat harvest. The planting
area of Serbian wheat crop for MY11/12 is estimated at 490,000 Ha. Overall production is estimated to
be 1.96 million MT, which represents an 18 percent increase compared to 2010. An average wheat yield
is around 4 MT/Ha, a record high and with an excellent baking quality. During July, Serbian
Commodity Reserves will purchase 100,000 MT of the new wheat crop for price of 20 din/kg
($286/MT). With domestic consumption of around 1.5 million MT Serbia will probably have about
300,000 MT of wheat available for export in MY11/12.
According to the Serbian Ministry of Agriculture and Trade, Serbian producers planted 490,000 Ha of
wheat last autumn. This is about the same as in MY10/11 when wheat was planted on 488,000 Ha, but
the estimated wheat crop was record low of 1.65 million MT due to spring drought and heavy rain
during the harvest. Due to very favorable conditions this year wheat crop will be for 18% higher than
last year and will reach around 1.96 million MT. The average yield of MY11/12 wheat is estimated at
record high 4 MT/Ha.
Last fall most of the wheat was planted in the optimal time for seeding, while during the winter time
temperatures were low but wheat was mostly covered and protected by snow. Spring and summer
conditions were also very good for wheat growing with enough moisture and sunshine. This resulted to
excellent wheat yields and good baking quality.
According to the Serbian Ministry of Agriculture and wheat experts in Serbia, total wheat production of
1.96 million MT in MY11/12 will be sufficient for domestic needs. With low ending stocks of the
previous year crop, there will be available some 300,000 MT of the new wheat crop probably for export.
Shipments are mostly going to neighboring countries (CEFTA countries) and some countries in North
Africa. In MY10/11 Serbia exported about 550,000 MT of wheat, of which 380,000 MT was exported
to CEFTA countries and about 170,000 MT was exported to Kosovo. According to the Serbian Grain
Fund in MY10/11 Serbia also exported 120,000 MT of flour.
In March 2011, the Government of Serbia decided to ban all wheat exports from Serbia for three months
(until the new wheat harvest) in order to help stabilize the market and keep bread prices from rising.
This measure expired on June 16th. Due to the wheat shortage at the world market and continued
increase of export prices, Serbian traders exported record high quantities of wheat in MY10/11. Some
550,000 MT wheat was exported until March this year, or 150,000 MT more than planned. At the same
time, the government approved duty-free imports of 100,000 MT of wheat, a measure that was also
proposed to last during the three-month ban only.
During July, Serbian Government will purchase 100,000 MT of the new wheat crop for State
Commodity Reserves. This will be done through Novi Sad Commodity Exchange at price of 20 din/kg
($286/MT), within 15 days from the date of submission of the complete documentation by the farmers
or cooperatives. Commodity Reserves is allowed to buy between 10 and 80 MT of wheat from a
registered agriculture household and up to 150 MT from a cooperative. State Commodity Reserves are
purchasing 100,000 MT of the MY11/12 wheat crop with the following quality parameters: hectoliter
weight must be minimum 76 kg/hl, moisture maximum 13 percent and foreign materials of maximum 2
percent. By purchasing some quantities for State Commodity Reserves, Serbian government had an
intention to support wheat trade and to suggest market price for the new wheat crop. But due to the fact
that 100,000 MT of wheat is only 5 percent of the total wheat production of 1.96 million MT, after
completing trading with this quantity of wheat through Novi Sad Commodity Exchange, very limited
trade is done with the new wheat crop at price lower then set by the state.
Current wheat price at the Novi Sad Commodity Exchange for the new wheat crop is between 17.5 and
18.5 din/kg ($250 and $264/MT) and the trade is very small. Traders and millers still have not started
buying new wheat crop ( HUYNHHV: Understood, no need to put in the reprot) , while farmers are
storing their new wheat crop in silos and waiting for fall and increase of wheat prices. During the last
year wheat prices at harvest time were very low, farmers were offered only about 9 din/MT ($129/MT).
After the harvest and low wheat crop in MY10/11, wheat prices started to increase reaching the record
price of 32 din/kg ($457/MT) in March 2011. At the present time, bakers are paying for flour -Type
500, between 29 and 33 din/kg ($414 and $471/MT) while a 500 gr loaf of bread in retail stores costs
about 55 dinars ($0.79).
This is the third year that Serbian Government is providing to the Serbian farmers planting subsidies of
14,000 din/kg (USD200/HA). Planting subsides can be used only by registered farmers that are
regularly paying costs for pension and health fund to the state. With this measure Serbian Ministry of
Agriculture wanted to help farmers during autumn and spring planting season, improving the quality of
sowing and increase productivity. Of the total subsidy of 14,000 din/HA (USD200/HA) farmers are able
to use 4,000 din/Ha (USD57/HA) for purchasing certified seeds, 4,000 din/HA (USD57/HA) for diesel
fuel and 6,000 din/Ha (USD86/HA) for purchasing mineral fertilizers. In May 2011, Government
wanted to decrease support to only farmers with up to 30 Ha of land, but after a week of farmers
protests Serbian Government decided to revise its decision and for this year to include support to all
registered farmers with maximum 100 Ha of land.
Beside this measure Serbian Ministry of Agriculture is also subsidizing 40 percent of the premium for
the insurance of agriculture crops and is subsidizing costs for storing wheat for maximum 6 months, in
11 certified public storages throughout Serbia of 63,000 MT storing capacity. Serbian Government is
paying 120, 100 and 80 din/MT ($1.7, $1.4 and $1.14/MT) as subsidies for wheat storing, depending on
the wheat quality. Serbian Government is also subsidizing banking credit?s interest rates for farmers.
Maximum banking loan for agriculture registered households is 5 million dinars ($71,000) and for
cooperatives is 15 million dinars ($214,300) with a payback period of 36 months and fixed interest rate
of 8 percent.
Production, Supply and Demand Data Statistics :
Wheat Serbia 2009/2010 2010/2011 2011/2012
Market Year Begin: Jul 2009 Market Year Begin: Jul 2010 Market Year Begin: May 2011
USDA Official New Post USDA Official New Post USDA Official New Post
Area Harvested 570 570 488 488 500 490
Beginning Stocks 665 615 718 555 303 42
Production 2,130 2,130 1,650 1,650 1,800 1,960
MY Imports 8 10 10 7 10 10
TY Imports 8 10 10 7 10 10
TY Imp. from U.S. 0 0 0 0 0 0
Total Supply 2,803 2,755 2,378 2,212 2,113 2,012
MY Exports 485 500 575 650 300 300
TY Exports 485 500 575 650 300 300
Feed and Residual 200 200 100 120 100 120
FSI Consumption 1,400 1,500 1,400 1,400 1,400 1,400
Total Consumption 1,600 1,700 1,500 1,520 1,500 1,520
Ending Stocks 718 555 303 42 313 192
Total Distribution 2,803 2,755 2,378 2,212 2,113 2,012
1000 HA, 1000 MT, MT/HA