Serbia: Wheat Area Lowest Since 1919
8 April 2008 Serbia’s 463,000 hectare (Ha) wheat area in 2008/09 is the smallest crop planted since 1919, and 33% lower than initially planned, according to the US Dept. of Agriculture’s Foreign Agriculture Service (USDA-FAS). Wheat production is projected to be about 1.65 million metric tons (MT), or 17% lower than the previous year.
The Serbian Government issued a decree extending a three-month ban on wheat exports that was initially imposed on August 2007. Serbian wheat exports in 2007 totaled 591,354 MT, mainly to Bosnia and Herzegovina, Montenegro, Macedonia, and small quantities to EU countries. Through 2007/08, wheat prices in the Serbian market rose by over 70% to reach US $354 per MT in December, and continued to climb to their highest levels of $424 per MT in March. The Serbian government issued a decree allowing duty-free imports of 200,000 tons of wheat into Serbia by April 30 to prevent further hikes in flour and bread prices.
The Serbian government announced several policy measures to support agriculture crop production that included subsidized short-term loans with the maximum amount of 500,000 din (US $9,500) at a 5% interest rate, and provided through commercial banks. The assistance measures also included direct payments to registered farmers totaling about 10,000 din ($187) per Ha for grain and other field crops seeded this season.
The corn area harvested in 2007/08 was estimated at 1.207 million Ha, about 3% higher than the area harvested in the previous year. Total production was estimated at 4.1 million MT, while the average yield is estimated at 3.36 MT/Ha. For 2008/09, the corn planting intention is projected at 1.3 million Ha, about 8% larger than the area planted in the previous year, while production is projected at 6.5 million MT.
It is estimated that about 150,000 Ha of the increased corn area will come from areas that were not planted to wheat last fall. To ease the problem of securing certified corn seed, the Serbian government has approved a program by the Seed Institutes to provide certified corn seed in exchange for farmers’ own corn. With a short corn crop in 2007, the government decided to extend the ban on corn exports that was initially imposed on August 4, 2007 until June 15, 2008. For 2007, it is estimated that Serbia exported about 426,000 MT. Average corn prices in the Serbian markets rose by about 93% in 2007, from US $163 in March, to reach $316 in October.
The much publicized bio-ethanol project that was announced in October by a U.S.-Hungarian consortium to build a 227 million gallon capacity fuel ethanol plant in Zrenjanin was officially canceled in December 2007. The project did not materialize due to problems with the Serbian Government, which was unable to provide the needed guarantees of minimum quantities of feedstock (corn and wheat) for ethanol production, and also for not having in place a new law on biofuels that regulates the production and use of ethanol.
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