The price of domestic wheat has reached its five-year maximum, as opposed to what’s happening in other markets. Last week, a kilogramme cost between 23.5 and 24.1 dinars, not including the VAT, which is 35.6% more than in the same period last year.
“Serbia currently has the most expensive wheat in the region, and probably in Europe too. This sort of price has not been recorded since 2013 and is good for local producers, but at the same time it makes our wheat not competitive for export,” said Vukosav Sakovic, the director of the Serbian Grains association.
He explains that last year’s harvest was record-breaking in terms of quantity, but that the quality of the yield was low.
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“There are rather small quantities available of high-quality wheat, which has drastically raised the price. The situation is as such that it is more cost-effective for mills to import wheat from Hungary even with all customs fees attached,” Sakovic adds
The Serbian Grains Association recently announced that there would be more than a million tonnes of wheat for export in 2019. The biggest competitors are Croatia, Hungary, Romania and Bulgaria.
“This year’s harvest has been postponed and is supposed to start in around ten days. As for the quantities, this will be an average year. It’s still early to talk about quality. There’s potential, but it remains to be seen whether it will be reached,” Sakovic says and points out that a good harvest is expected globally as well, which means that there are no special reasons for the price of wheat to increase in the world market.
He adds that local markets, such as the Serbian one, react to supply and demand laws, but he believes that that is not sustainable in the long run if producers want to export.
“We are not competitive at the moment and we practically can’t sell anything. There will have to be a price adjustment in the market sooner or later. It’s more realistic for us to expect to adjust to the changes in the international market,” he explains.
According to this Association’s data, Serbia currently has supplies of around 500,000 tonnes of wheat of poor quality, which is not used in mills and which will be used for animal feed factories or be exported as animal feed at lower prices.
This post is also available in: Italiano