grain crisis in Bulgaria

According to the main manufacturers of animal feed, the main regulator of prices in every economy is the state reserve, but those responsible for maintaining the grain reserves have been ignoring the problem of decreasing stocks. They claim this is why the State will not be able to deal with the current issue easily reported Dnevnik daily on August 10.

Producers have blamed the Government of poor management of the grain crisis that was caused by the recent droughts.

Calculations by the union of animal feed producers showed that 2.65 million tons of wheat, barley and maize will be necessary to balance the requirements for bread and animal feed this year. Of that, one million tons of wheat will be used for making bread before the next harvest. Around 300 000 tons are needed for planting next year’s crop and 150 000 tons will be used by people who rent out their lands to the State. 200 000 tons of wheat have already been shipped to Greece and Romania. So far, producers have bought 200 000 tons of wheat, but 900 000 tons will be needed over the coming year.

Animal feed prices have increased by 25 per cent. Meat producers then justified an increase in meat prices of as much as 60 per cent because of the increased forage prices. However, feed producers are denying that higher forage prices were the reason for the rise in meat prices as animals are still being fed with crops harvested last year. If prices have gone up by 60 per cent now, what will happen in a month’s time when animals start being fed from the new crop, feed producers asked.

According to official information the recent harvest only yielded 2.2 million tons of corn. Therefore, the balance is short by 450 000 tons. According to experts, it is unlikely that this amount will be imported cheaply from abroad. According to Lyubomir Draganov, head of bread-improvement company Bonmix, if the State reserve had 300 000 tons of grain, the market would automatically calm down in a situation where crop yields were insufficient.

The next auction is scheduled for August 29. Producers in Bulgaria believe that Bulgarian companies will not be able to offer a high enough price as they will be bidding against some of the international grain traders like Glencore and Cargill Foods.

Deputy Minister of Agriculture Svetla Buchvarova was in Budapest on August 9 to inquire personally what the conditions and requirements are for Bulgarian producers to be apply to buy corn from Hungary. The EU has allowed the Hungarian intervention agency to sell one million tons of grain to other countries through an auction. The bidding on the first auction, which took place recently, started at 130 euro per ton, but due to high demand, it went up to 170 euro per ton.

After Buchvarova returned from Hungary, it was announced on August 13 that the Ministry of Agriculture would prepare an emergency proposal to the European Commission that Bulgaria should receive a guaranteed quota from Hungary’s corn, which will be sold by the end of October.

Former agricultural minister Kamen Beligerski told Dnevnik daily that if the State had a policy to encourage animal breeders and subsidised at least part of the forage production, Bulgaria would not be in such a difficult situation. According to him, food prices will continue to rise with any further grain price increases.

Buchvarova also recently said that Bulgaria would negotiate with Ukraine to import corn from its state reserve. However, Ukraine has imposed a veto on grain exports at least until the end of August.