In the past eight months, we exported only 530,000 tons of wheat and flour, and the plan was 1,250,000. – I am afraid that we will be left with reserves that will put pressure on prices – says Vukosav Sakovic from “Zita Srbije”
Contrary to all predictions that the growth of grain prices will stop at the beginning of 2021, they are going up due to the pandemic and the unstable market situation dictated by investment funds.
According to the latest report of the product exchange in Novi Sad, the price of corn rose again by about 2.5 percent compared to the previous week. As it is stated, the price of grain remained unchanged. The Novi Sad Stock Exchange points out another unusual event on the domestic market, and that is that the prices of wheat and corn were at almost the same level.
Vukosav Sakovic from the Association “Zita Srbije” says that the prices of corn and wheat are getting closer and that it can now be seen that they have one point of contact at 0.20 cents.
– That price will surely be equalized soon, but based on the legality of the market, corn will become more expensive than grain, which will not be the first time in history because we have already had this situation in previous years – our interlocutor explains. He adds that corn is a highly sought-after commodity in exports, and in addition, domestic sellers were willing to sell it.
– The demand for wheat was good from time to time, but our sellers did not react to that demand. They waited for a higher price, although at one time it was even better on the domestic than on the international market. That is why we now have an interesting market situation. We did not send our opportunities in time. Now there is a real danger that we will welcome the new harvest with quite large stocks of wheat – Sakovic emphasizes and notes that in such a situation, when the demand is weak, the price logically gets a downward trend.
From October 2020 to the end of February, Serbia exported 1,862,000 tons of corn. The Association “Zita Srbije” states that expectations have even been exceeded and believe that the final placement of corn on foreign markets will reach 3.2 million tons. Contrary to the good results in the export of corn, it is completely different with wheat and he says that we are now entering a time gap. The economic year begins with the harvest on July 1 and lasts until June 30. In the past eight months, we exported only 530,000 tons of wheat and flour, and the export plan was 1,250,000. There are four months left until the new harvest, but it will certainly not be traded in the last month.
According to him, Serbia lost several months when the export of wheat was very bad, almost symbolic. As he explains, the world market is not like ours on the local market, where you sell the old crop until the new wheat arrives. That sale ends two months before the new harvest. After that, large multinational companies start buying new wheat. The problem is also in domestic logistics. The number of transporters on the Danube is limited, and even if all those who have a surplus of grain decided to sell it now, it would not be possible.
– That is why it is good for exports to be distributed during the year. We will not celebrate in the next three months. We expect grain exports of another 150,000 tons. Which means we will have more than 500,000 tons left in the final stock. These are high stocks for us and they will put pressure on the price – Sakovic explains. He also notes that comparisons with the previous year are not adequate because “at that time we had a problem with the quality of grain and producers did not want to sell it as fodder wheat.” We also had the beginning of the Covid 19 pandemic, when huge stocks were made and more flour was ground than was needed.
– It is better to compare what we could have done and we did not, and that we will sell just over half of the wheat than we predicted – Sakovic states and adds that Serbia has enough storage capacities for both stocks and a new crop, to sell that wheat and of course they won’t throw it away, but the question is at what price it will be sold and exported later.
– In any case, in the next period, grain cannot become more expensive, and how much it will become cheaper depends on future prices on the international market – Vukosav Sakovic emphasizes, Politika reports.
