August 11, 2010

Serbian agriculture to contract on lengthy winter

Serbia's agriculture industry may shrink as much as 4% this year, after a lengthy winter and heavy rainfall, according to the Serbian Chamber of Commerce.

The contraction may be as much as 6-8% if corn output falls, Vojislav Stankovic, a researcher at the Belgrade-based chamber's Agriculture Department said. The Statistics Office has estimated the shrinkage at between 2% and 3%.

The industry, which accounts for 11% of Serbia's economy, experienced zero growth in the year's first quarter, according to official gross domestic product figures. The national wheat crop probably will be smaller than projected by the Statistics Office, according to Stankovic.

"Due to long winter and heavy rains, fruit and vegetable production has already been hit," he said. "Wheat output is already below expectations, while oilseeds, sugar beet and corn should all perform around their annual average yields."

Farmers are likely to harvest 1.5-1.6 million tonnes of wheat, based on the chamber's estimate of the area sown with the grain, according to Stankovic. The Statistics Office predicted a 1.9 million-tonne crop less than a month ago, implying a decline of 8% from last year.

Wheat prices surged in recent weeks on concern that Russia, where a drought is searing fields, might bar grain exports. The government unveiled a ban last week, helping to lift prices to US$8.68 a bushel, the highest level in 23 months, for December- delivery wheat traded in Chicago.