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Serbia faces wheat surplus despite export challenges

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Sunčica Savović, director of the “Zita Srbije” Association, has announced that Serbia is grappling with a significant surplus of wheat, with projections indicating a record surplus by the end of the market year.

Currently holding 2.42 million tons of wheat, Savović estimates that a surplus of 1.3 to 1.8 million tons will remain in stock by June 30, the end of the market year, even after meeting domestic needs and exporting contracted quantities. However, she notes that export potential is hindered by lower prices in competing countries within the Black Sea region, such as Ukraine, Romania, Hungary, Bulgaria, and Russia.

Savović highlights concerns over wheat quality, citing decreased quality due to improper storage practices and disease susceptibility exacerbated by factors like a warm winter and reduced fertilizer usage. Despite recent rainfall, moisture levels across Serbia remain lower than last year, posing challenges for wheat cultivation.

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The situation with deep moisture, particularly in Vojvodina, raises concerns for the upcoming harvest season. Savović underscores the need for more favorable weather conditions from April onwards to mitigate potential yield losses.

Additionally, Savović addresses the issue of unconditional storage practices, which result in export surpluses being classified as lower-grade livestock wheat, fetching lower prices on the market.

Looking at global trends, Savović notes a slight decrease in wheat production, coupled with increased consumption and reduced final stocks. While demand is expected to rise, uncertainties persist regarding market dynamics in the Black Sea region, which traditionally absorbs most of Serbia’s wheat exports.

Regarding corn, Savović anticipates a surplus at the end of the market year, highlighting the importance of timely exports to avoid logistical challenges, particularly concerning low water levels on the Danube during the summer months.

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The discussion also touches upon Serbia’s past decision to implement a temporary ban on the export of basic agricultural food products in response to market disruptions caused by the conflict in Ukraine. Despite warnings about high stocks, the ban was enforced until July, underscoring the complexities of managing agricultural markets amidst geopolitical uncertainties.

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