Drought Slows Price Rises for Serbian Farm Goods; Analyst Urges Farmers to Wait

Serbia's agricultural sector faces a slow but steady rise in product prices due to summer heatwaves affecting the entire region. Agroeconomic analyst Žarko Galetin suggests farmers hold onto their produce, anticipating higher profits later.

“

I think it is the state's task to do something about it, especially since this story about market regulation has been current for so long, it has been on the agenda for so long, not just of our state, unfortunately, but of our farmers, who from time to time go out into the streets and, among other things, raise the issue of market regulation, the establishment of a commodity exchange.

Galetin points to a disorganized market as a major hurdle for Serbian farmers. He argues that the state needs to address this issue, which has been a long-standing demand of farmers who have protested for market regulation and the establishment of a commodity exchange. "We live in conditions where our agricultural producers and buyers, due to market disorganization, have practically become arch-enemies instead of partners," Galetin stated.

He explained that Serbian farmers often lack market control, unable to freely dispose of their goods or implement strategic sales plans. Galetin recalled a past law on public warehousing that allowed farmers to use commodity warrants for their goods, providing security and market control through tradable securities. This system, he noted, is no longer in place.

“

We live in conditions where our agricultural producers and buyers, due to market disorganization, have practically become arch-enemies instead of partners.

The absence of a true commodity exchange, particularly a futures exchange for hedging against market risks, is another significant problem. Galetin highlighted that while Novi Sad has a spot market, it lacks the futures market crucial for risk management. This forces farmers, especially those growing crops like sunflowers that require immediate processing, to sell to a small number of buyers who then dictate prices. "Farmers then hit a wall, encountering an oligopolistic market with few buyers and many sellers. They simply agree, form a so-called cartel agreement, and offer a shamefully low price," Galetin said.

“

Farmers then hit a wall, encountering an oligopolistic market with few buyers and many sellers. They simply agree, form a so-called cartel agreement, and offer a shamefully low price.