Production:

For MY2014/15 corn planted area was reported as 1.18 million HA, with total corn production estimated at record levels of 7.7 million MT. After the last two years of problems with corn production and export, Serbian corn farmers are having an excellent year with record high average yields of almost 6.5 MT/HA. The corn harvest last fall lasted unusually long due to wet fields from mid-September through mid-December. Corn yields in some parts of Vojvodina reached a record high of 10-15 MT/HA, while corn yields in the areas south of the Danube were lower, approximately 6-8 MT/HA. Frequent and heavy rains last fall postponed the corn harvest. Due to very wet weather during the summer months, the moisture level of the corn in the fields at the beginning of the harvest was above 20 percent and farmers delayed harvest, keeping the corn longer in the fields to reduce the moisture levels. Otherwise, farmers would have to pay the additional cost of artificial drying of the corn to approximately 14 percent of humidity level most traders and exporters are requiring. The record corn crop in MY2014/15 not only in Serbia, but in the whole region, created very low prices but also put pressure on the farmers to sell because of the limited storage.

Due to the limited storage space for corn most of the corn in October and November 2014 (almost 800,000 MT) was directly transported from farms to river ports and loaded on river barges for export. Domestic consumption of corn in Serbia is estimated at 4.2 million MT, leaving Serbia approximately 3 million MT of the new corn crop for export. From October to December 2014, Serbia exported record amounts of corn over 1 million MT. Such large corn exports were never performed before in such a short period of time.

For MY14/15 Serbian corn exports are looking much more promising than in the last two years due to the problems with aflatoxin (corn exports increased 200 percent compared to MY2012/13). From October 2014 to March 2015, Serbia exported approximately 1.9 million MT of corn and is expected to an export additional 1 million MT through the end of September 2015, reaching a record level of almost 3 million MT.

For MY 2015/16, Serbia's corn planted area is projected to be 1.1 million HA, a 7 percent decrease from the previous year. Total corn production is forecast at 7 million MT, which equates to an average yield of 6 MT/HA. The price of Serbian corn after the harvest was only 13 din/kg (USD 117/MT), thus very competitive compared to Hungary, Romania and Bulgaria. Corn prices have been very gradually increasing since January 2015 from 15 din/kg (USD 135/MT) to 16.5 din/kg (USD 149/MT) in March 2015.

Corn accounts for about 37 percent of total planted area of field crops in Serbia. This year corn planting in Serbia is expected to start mid-April and last until mid-May. Corn farmers have been advised to plant seeds much deeper in the soil to adjust for the soil moisture and anticipated hot weather during the growing season. It is predicted that MY2015/16 corn area will be approximately 80,000 HA less than last year. It is estimated that corn will be planted this year on 1.1 million HA and that total production could reach 7 million MT, assuming an average yield of 6 MT per hectare.

Corn is the main crop in Serbia that producers can easily store on their farms. Farmers harvest the crop in October and November and it can either be stored on farms to dry naturally or taken to drying facilities. When farmers select to store their grain on farm, they usually sell their crop during what is called the "second harvest" in March before the start of the new planting season. The naturally dried corn normally has moisture contents between 14 and 17 percent and is usually offered for sale in small lots.

Serbia's requirement of commercially certified seed corn is estimated between 20,000 and 24,000 MT annually, depending on seed varieties and the area planted. There are two large domestic players in the corn seed production business in Serbia: the Institute for Field and Vegetable Crops of Novi Sad (NS Hybrids) and the Maize Research Institute of Zemun Polje (ZP Hybrids). They are both semi-state owned institutes and they currently control 19 and 24 percent, respectively, of the corn seed market in Serbia. This represents a huge decline in market share due to competition from foreign corn seed varieties that began entering the Serbian market several years ago. The largest player in the corn seed market for the past few years is U.S. Du Pont Pioneer with 28 percent market share of the entire seed market. Du Pont Pioneer and two domestic institutes account 71 percent of the corn seed market, while the remain 29 percent of the market is shared by approximately 15 foreign companies that are present in the Serbian market (i.e. KWS, Limagrain, Syngenta, Monsanto, Dekalb, Agrimax, Maisdour etc).

In July, 2014 DuPont Pioneer opened a research center to test new sunflower and corn hybrids in Stara Pazova, Vojvodina. The EUR 400,000 Investment is located on a property owned by Delta Agrar, part of Delta Holding, one of Serbia's largest agribusiness companies. DuPont Pioneer-Serbia has been present in Serbia since 1996 and has produced more than 70,000 tons of corn seeds since 2002 with Delta Agrar, exporting more than half to the EU, Russia and the Ukraine. DuPont Pioneer, in cooperation with Delta Agrar, produces 50 percent of all rapeseeds in Serbia, 28 percent of Serbia's hybrid corn seeds and 11 percent of the sunflower seeds.

Consumption:

Total domestic corn consumption for the last five years has varied between 3.8-4.4 million MT annually. Serbia's MY2014/15 consumption requirement is estimated at approximately 4.2 million MT annually. With most being used for animal feed and only 300,000 MT used for human consumption and increased starch production in Serbia. However, corn consumption for feed also has declined due to decreased livestock numbers as in most of the transition countries. In year 1990 2,168,000 heads of cattle were counted, of which 1,275,000 were cows and pregnant heifers; in 2014 there were only 1,102,000 cattle (742,000 cows and pregnant heifers). At the same time numbers in private ownership also decreased, partly as a result of rural depopulation.

Currently in Serbia there is one bio-ethanol plant built in 2007, in the city of Sid. It has a capacity of 100,000 MT per year. The factory is able to produce biodiesel per EU standard quality EN 14214. Due to the lack of government regulation on bio-ethanol production this factory is still not producing bio-ethanol, but is working as a crushing facility for sunflower and soya.

In 2011, Victoria Starch started to reconstruct a sugar factory in the city of Zrenjanin, with the intention of investing EUR 50 million to start production of liquid sugars and starch for export. Victoria Starch is planning to use modern wet-milling technology to process corn. The planned capacity of daily processing is 900 MT of corn, while annual production is planned at 300,000 MT to produce corn starch, fructose syrup 42 and 55. It was initially planned that the rebuilding and reconstruction of the factory would be completed by 2013, but so far it has not opened. Once starch and bio-ethanol production starts in Serbia, domestic corn consumption can be expected to drastically increase and thus there will be less corn for export.

Trade:

Serbia is a net corn exporter. In MY13/14 Serbia was one of the largest corn exporters in Europe. If corn exports reach 3 million MT in MY2014/15, Serbia will once again enter the list of top ten corn exporters in the world. Serbia typically produces more corn than it consumes, exporting to neighboring and Mediterranean countries. It often finds itself competing with regional corn producers from Russia, Ukraine, Romania and Hungary. In CY2014, corn was the leading Serbian agricultural export commodity.

In MY2013/14 Serbia exported 1.8 million MT of corn, while MY2012/13 Serbian corn exports were only 574,409 MT due to quality problems. In MY14/15 Serbia is continuing to enjoy record large exports of corn. For the first six months of MY2014/15 (October 2014 to March 2015) Serbia exported 1.9 million MT or about the same as for the whole MY2013/14. If Serbia can export trends continue, exports may reach a record level of 3 million MT in MY2014/15. Most of the corn that is exported is naturally dried with 14 percent moisture. Most of the exports that are going to Montenegro, Croatia, Bosnia and Herzegovina and Albania usually go by truck, while exports for Cyprus, Italy, Spain and Portugal is going via the Danube river to the Port Constanza to the Black Sea. Serbian companies also now have some new regular markets in South Korea and Japan for non-GMO corn.

The largest corn exporter in MY2014/15 is the Dutch company "Nidera" (approximately 40 percent of total exported quantities), followed by Cargill (approximately 20 percent) and ADM (approximately 15 percent). Most of the quantities were shipped by barges via the Danube to the Port Constanza, Romania.

Corn exports in first half of MY14/15

Month

MY14/15 in MT

October

288,600

November

479,696

December

422,359

January

274,716

February

233,929

March

192,700

TOTAL:

1,892,000

Effective January 1, 2014, the duty rate for corn imports from EU countries is as follows: tariff no. 1005 90 corn is 24 percent, tariff no. 1005 10 seed corn is 9 percent and tariff n. 1101 11 15 corn flour is 20 percent. The general duty rate for corn, corn seed and corn flour imports from other countries including the U.S. is still 30 percent.

Stocks:

Corn ending stocks in MY2014/15 are estimated to be at a record high, almost 800,000 MT due to the record corn crop, compared to MY2013/14 ending stocks which were estimated to be 312,000 MT. Most of the stocks are in the farmers' hands and kept in open-air storage facilities to be naturally dried. These stocks are normally offered for sale in local markets starting in March in order to collect money for the new planting season.

Policy:

The Serbian government will continue to support corn production through the same policies outlined in the wheat policy section.

Due to the problems that Serbia had with aflatoxins in 2012, the Serbian Ministry of Agriculture launched an aflatoxin B1 monitoring program for MY2013/14 and MY2014/15 corn crops, in order to protect the food and feed supplies. This program systematically measures microbiological and biological contaminants in food and feed. It prescribes a certain number of samples according to a sampling plan and outlines the measures that must be taken if discrepancies are identified. If irregularities are detected in the corn crop, legal measures are taken including prohibiting the use of the corn for food or feed, continuing monitoring, and informing producers, distributors and consumers about the irregularities and removing the corn from the market.

An additional measure imposed by the Ministry of Agriculture in 2013 to prevent problems with future corn crops is that all storage facilities in Serbia selling corn to exporters must have a "veterinary control number" for exports of corn for animal feed. If corn is exported for human consumption this is not necessary. Registration of the facility for storage of corn as feed for livestock is regulated by the Veterinary Law. To obtain a "veterinary control number" the owner of a storage facility must apply at the Ministry of Agriculture, per the Veterinary Directive to be registered as an approved storage facility. These facilities are given export control numbers and are registered with the Ministry of Agriculture for export.

Marketing:

During the harvest (September-November 2014), Serbian traders/exporters paid between 13-14 dinars/kg (USD 117-126/MT) for the new corn crop. This was the same as the previous year MY2013/14.

During the first six months of MY2014/15, corn prices rose from13 din/kg (USD 117/MT) in September/October 2014 to 16.5 din/kg (USD 149/MT) in March 2015. Most of this price increase is attributed to increased demand for Serbia's more price competitive corn compared to Romania and Hungary. Serbian corn prices will most probably continue around level due to the record large stocks in the country.

Production, Supply and Demand Data Statistics:

Corn Serbia

2013/2014

2014/2015

2015/2016

Market Year Begin: Oct 2013

Market Year Begin: Oct 2014

Market Year Begin: Oct 2015

USDA Official

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USDA Official

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USDA Official

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Area Harvested

1,250

1,200

1,275

1,180

1,100

Beginning Stocks

202

202

826

312

819

Production

6,400

5,900

6,850

7,700

7,150

MY Imports

10

10

10

7

7

TY Imports

10

10

10

7

7

TY Imp. from U.S.

0

0

0

0

0

Total Supply

6,612

6,112

7,686

8,019

7,976

MY Exports

1,736

1,800

2,500

3,000

2,900

TY Exports

1,736

1,800

2,500

3,000

2,900

Feed and Residual

3,800

3,700

4,100

3,800

3,800

FSI Consumption

250

300

300

400

400

Total Consumption

4,050

4,000

4,400

4,200

4,400

Ending Stocks

826

312

786

819

776

Total Distribution

6,612

6,112

7,686

8,019

7,976

1000 HA, 1000 MT, MT/HA