Flour stocks are increasing

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In the days when the war in Ukraine began, among the decisions made by the state of Serbia was the one to ban the export of flour, wheat, corn, oil… However, flour producers warn that such a decision harmed them and that silos and warehouses are already creating surpluses. They are appealing to the Government to receive them for an emergency meeting, because they are afraid that they will have to stop production due to the accumulation of goods.

For the state – a move that protects the domestic market from the consequences of the crisis, but for flour producers – a decision that is irrational and unjustified from an economic perspective. Three weeks have passed since the ban on the export of flour and wheat came into force. Not only is there enough flour, but the mills have been creating a surplus in recent weeks, according to the H1 website.

That is why an urgent invitation for a meeting is coming to the address of the Government from the Association of the Mill, Bakery and Pasta Industry of Serbia. They have two requests.

“To immediately lift the ban on flour exports or if the Government for some reason does not want to do so, then to implement the Law on Commodity Reserves and that Serbia’s commodity reserves must buy all surplus flour at market prices. Great damage has already been done, because “Other countries are already entering our market and there is a danger that we will significantly lose the flour market, which we have been ruling sovereignly for five or six decades,” says Zdravko Sajatovic from “Zitounija”.

According to the Chamber of Commerce, Serbia exports about 126,000 tons of flour, mostly to the markets of neighboring countries: 44,255 tons go to Montenegro, 35,637 tons to northern Macedonia, about 35,000 tons of flour to the market of Bosnia and Herzegovina and 4,234 tons to Albania.

One of the biggest buyers of wheat in Serbia is “Zitopromet-mlin” Senta, where they say for H1 that there are enough raw materials until the new harvest, maybe in the long run. And the new harvest, they remind us, is on the threshold.

“Flour in bulk is not in such demand, since the state also reacted to bakers with subsidized flour. We have a problem, stocks of that flour are increasing and that could lead to production stops, because we don’t know what to do with those surpluses,” says Predrag. Djurovic from Zitopromet-mill Senta.

The Ministry of Trade has not answered the questions of H1 about how long the decision on the export ban will be in force and whether it will meet with dissatisfied businessmen…

If it remains in force – what consequences could a decision to ban exports have on the market in the long run?

“This measure is a measure that should certainly not remain, at least not in the long run, ie in the period until the new harvest, because it will create a problem of large transitional stocks, and on the other hand – prevent our producers from achieving good benefits and good earnings internationally. I think we should use the opportunity and logistics provided by the export port of Constanta, which is one of the few Black Sea ports that is currently operational for export, “said Zarko Galetin, an agroeconomic analyst.

The uncertainty that the war in Ukraine brings is also reflected in the economic forecasts, but one thing is certain: although the prices of certain foodstuffs are currently frozen in Serbia, including flour, the rise in food prices will not bypass Serbia, Novi Magazin reports.