Food prices to continue to rise in Serbia due to Ukraine crisis

Food prices to continue to rise in Serbia due to Ukraine crisis.  For more information on export to China, please call SINOLOBEN, service Email: sinoloben@sloben.com

The Politika newspaper reported on April 15 that the Beta news agency's monthly magazine Business and Finance published a report stating that the crisis in Ukraine has exacerbated the already existing difficulties of the Serbian food industry in terms of shortage of raw materials and rising prices, and has created new problems for companies operating in Russia and Ukraine. The market situation is expected to deteriorate further in the coming period, and food prices will continue to rise.

 
The Serbian government previously restricted the export of wheat, flour, corn and sunflower oil. Traders are not satisfied with this measure, but experts say that it is justified in case of emergency, and some other countries have done the same. Agricultural economist Milan Prostran said we don't know what this year's harvest will be, there are still three months to go before it is revealed, but given the shortage of fertilizer, the final yield should be taken with a grain of salt. Traders will certainly lose some of their income, but the government will compensate them by buying commodity reserves at stock exchange prices or in other ways. Traders will also not lose the opportunity to make money because these products have a shelf life of up to two years, and edible oils have a longer shelf life. Such export restrictions can at least temporarily depress prices, and according to data from the Novi Sad Products Exchange, prices of corn and wheat fell slightly immediately after the implementation of export restrictions.
 
Aleksandar Bogunovi?, secretary of the Association of Plant Production and Food Industry of the Serbian Chamber of Commerce and Industry, said that at the moment no problems are expected in the domestic market supply, especially in basic foodstuffs. There are sufficient reserves of wheat, corn, flour, sugar, oil, salt, milk powder, rice, beans, meat and meat products.
 
Goran Popovic, the director of operations of Bambi, the leading company in the confectionery and cookie industry in Serbia, also expects that some of the products will be sold in the market. Popovic also expects that prices of some products will stabilize. However, he said that for some raw materials, such as various vegetable fats, Serbia does not have the technology and production capacity. Although most companies in the industry have a base of raw materials such as sunflower and soybeans, processing companies focus on the production of final products, rather than such intermediate products. The Serbian confectionery industry has been largely dependent on imported raw materials for two years, and the Ukrainian crisis has further complicated the situation. We need to import dairy products, such as frozen butter, milk or whey powder, Popovic said. If there are additional disruptions and interruptions in the supply chain of imported dairy products, the entire confectionery and food industry will face a lack of raw materials for production. There is enough flour in Serbia, but the current prices are comparable to European and world levels. All raw materials have become more expensive, without exception, and this affects the price of the final product. Popovic believes that the crisis in Ukraine has once again demonstrated the importance of establishing local and regional supply chains.
 
Raw material problems are not the only headache for the domestic food industry, as many companies are operating in the Russian market is also a major problem. The price of transport from Serbia to Russia has doubled due to rising fuel prices and bypasses, and the ruble's exchange rate is extremely volatile. Apple and strawberry growers are in the most difficult position, as Serbian apples and strawberries are mainly exported to the Russian market, but Russia is also one of the main export destinations for some companies in the Serbian dairy and meat industry. Dusan Knezevic, general manager of Zlatiborac, a giant in the Serbian meat industry, said that more than half of the company's exports are sold to Russia. Sales in Russia have been steadily declining since the first outbreak of African swine fever, and the crisis in Ukraine has worsened the situation. Business & Finance's interlocutors agreed that "moving" to new markets is not easy and cannot be done in the short term.

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