Economist: Serbia’s commodity reserves are modest, given the situation, they should be increased

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The state of stocks of state commodity reserves is much more modest than it was thirty years ago, and given the rise in food prices and the crisis in relations between the two major food producers, these reserves should be raised to a much higher level than is currently the case professional public.

At the beginning of the month, the Republic Directorate for Commodity Reserves increased the stocks that can meet the quarterly needs of the population in the event of an emergency situation that would cause market disruptions. Stocks of wheat, corn, oil, sugar and energy have increased. When it comes to food products from imports, the stocks of rice, beans and salt have been increased so that they will be able to meet the needs for more than three months. In case of unforeseen circumstances, the authorities in Serbia are ready to protect the domestic market with customs policy and by preventing the export of strategic food products.

Agroeconomist Milan Prostran told Danas that given the situation we are in, when it comes to food prices and possible shortages in the event of a crisis, it is necessary to raise the level of commodity reserves in Serbia to a much higher level than is currently the case.

– In the past, state commodity reserves had much greater potential than is the case now. Our country has a lot of experience with commodity reserves since the period when we were in a different socio-political system than in the 1990s. At one time, there were strategic commodity reserves in case of emergencies and market reserves in case of disturbances in food prices. After 2000, the level of commodity reserves began to decline rapidly under various pretexts. One of them was that Serbia would soon become a member of the European Union, which did not happen. We are now facing rising food prices, so we should increase commodity reserves. Since it was decided that they meet the needs in three months, it is important to focus on the procurement of those that are most important in order to avoid wasting funds – our interlocutor points out.

According to him, the food products that should definitely be in the commodity reserves are wheat, corn, oils, sugar, flour, one type of meat and milk powder, and from the imported goods, beans, rice and salt.

– Currently, the situation is not such that a decision should be made to ban the export of strategic food products, but care should certainly be taken not to overflow from the country so that the needs of the domestic market can be met at any time – says Prostran.

Agricultural expert Vojislav Stanković also believes that the quantities of necessary agricultural products in commodity reserves should be increased and that this is profitable even in less crisis situations on the food market than is currently the case.

– Commodity reserves are a very efficient market mechanism that allows the state to intervene in the event that food prices rise enormously and thus endanger the standard of living of the population. Therefore, they should be supplemented even more, because given the effect, the invested funds would be fully paid off. If there was enough oil and meat in the commodity reserves of Serbia, their placement on the market would definitely reduce the prices, which have increased significantly – our interlocutor concludes, Danas writes.