Danube River Route Troubles Serbian Corn
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This spring, Corn was planted on 950,000 HA, and production in MY2022/23 is expected to reach 6.2 MMT, about 20 percent lower than the average in Serbia. This is the second year in a row that a lack of precipitation in June, July, and August, along with very high temperatures, decreased the Corn crop significantly. Dry and warm conditions across Serbia, combined with lower use of agricultural inputs, such as fertilizers and plant protection products, resulted in lowering Corn production in MY2022/23.
Spring planting was 45 percent more expansive than last year. However, due to the export ban, Serbian farmers were not able to export Corn from the beginning of March until the export ban was lifted. Usually, from March, Serbian farmers sell the previous year’s Corn stocks to fund the new planting season. A lack of precipitation and extreme temperatures affected Corn growth from June to August and significantly impacted the growth of the Corn plants. The dry period coincided with the critical Corn pollination period, thus increasing the risk of poor kernel development.
According to the Serbian Grain Fund, despite decreased Corn production, the imposition of an export ban, and export quotas for almost five months, Serbia will be able to export 1.6 MMT, which is a decrease of 46 percent compared to MY2020/21. Despite the drought, Serbia will have enough Corn for domestic use (about 4.5 MMT) and ending stocks of about 300,000 MT of Corn. Due to the extremely low water level on the Danube River, it is impossible to transit to Port Constanza, Romania. Experts predicted that river transportation would be limited until November 2022.
The Corn harvest started in mid-August, almost a month earlier than usual due to the extreme drought. The Corn cobs are tiny, with damaged kernels and many full of worms. There are a significant number of Corn fields without cobs at all and with Corn stalks a mere 50 cm high. Even irrigated Corn is suffering, as agronomists indicate that irrigation was done too late without adequate water. The current Corn kernel moisture is 12.5 percent. In an average year, Corn has 16-20 percent moisture and needs to be dried artificially or naturally to 14-14.5 percent, primarily to meet requirements stipulated by international grain traders.
Serbian Corn Trade Route
Corn prices on the Novi Sad Commodity Exchange increased slightly in July when the export quotas were eliminated. The current price for Corn on the Novi Sad Commodity Exchange is between 33.50 din/kg ($305/MT) and 34.10 din/kg ($310/MT). Since the end of July, exports of Corn from Serbia stopped due to the record low level of the Danube River preventing the passage of ships on river barges or vessels to the Port of Constanza, Romania. Under normal conditions, 80 percent of Serbia’s Corn for export transits from Port Constanza. At the same time, the remainder is shipped by train or trucks to Italy, Albania, North Macedonia, Kosovo, Montenegro, Bulgaria, Greece, Bosnia and Herzegovina, and Germany.
The Serbian Chamber of Commerce estimates that Serbia will have enough food for domestic supply, but much smaller quantities will be available for export. The price of Serbian grains and oilseeds will remain very high. This is a result of the smaller grain supply in the Black Sea region due to the Russian-Ukrainian conflict and very high input costs. As per AgFlow data, in volume, Romania was the largest export market of Serbian Corn with 112 TMT, followed by Hungary (30 TMT), Austria (5 TMT), and Bulgaria (2 TMT) in 2021-2022.
Other sources: USDA
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