Sunflower Price: 40 Dinars Stays, Millers Vow More
Oil mills announced a final sunflower price for Monday at a meeting with the Serbian government, higher than the advance 40 dinars, but farmers say no deal was reached.
The advance purchase price for sunflower in Serbia stands at 40 dinars per kilogram excluding value added tax, or 44 dinars including it, and farmers have been delivering their crop at that rate since the start of the season. At a meeting held at the Serbian government, oil mill representatives announced that they would publish a final, significantly higher price on Monday. Nedeljko Savic, president of the Stig farmers’ association, says no agreement was actually reached.
As we reported ahead of the meeting, that advance price of 44 dinars including tax was precisely the starting point for the talks, which the government called at the producers’ request.
Who sat at the table and what was agreed
The meeting was attended by Prime Minister Djuro Macut, Agriculture Minister Dragan Glamocic and Trade Minister Jagoda Lazarevic. On the other side of the table were representatives of the Stig, Kikinda and Klub 100P plus associations, the Association of Milk Producers of Sumadija and Pomoravlje, the Nase mleko association, and representatives of oil mills and other sunflower buyers.
According to a government statement, it was agreed that the dialogue would continue in the coming days in the same format. Prime Minister Macut said he understood the challenges farmers face because of large price swings from year to year.
“The state cannot dictate market prices, which depend on supply and demand, but it can and must use the mechanisms available to help make the relationship between producers, buyers and processors more stable and predictable,” Macut said.
Minister Glamocic called the meeting productive and said it was a significant step forward that several oil mill representatives announced they would soon publish final purchase prices.
“Although this is not an easy topic, we approached it as a team together with the minister of internal and foreign trade, opened the question of a systemic, long-term solution to this problem, and agreed to continue the talks in the same format,” Glamocic said.
How much sunflower was worth last year, sources disagree
There is a discrepancy between sources over last year’s price. Agrofin, citing a statement Nedeljko Savic gave to the Beta news agency, reports that last year’s advance sunflower price was around 62 dinars per kilogram. Biznis.rs, in a conversation with the same source held later the same day, cites a different figure: around 54 dinars per kilogram plus value added tax at the buyer, or around 56 dinars excluding tax for sunflower sold through the exchange. Neither figure has been officially disputed, and the gap most likely comes down to whether the price at the buyer or the price achieved on the exchange is being compared.
Savic argues that the offered 40 dinars does not cover production costs and that the price should track the world market.
“No agreement of any kind was reached at the meeting. The fact that the price will be somewhat higher does not mean much to us, because it will not be a market price in any case, and it started from 40 dinars plus VAT. If the price of crude oil is 1,350 dollars per ton, there is no reason for sunflower seed to be below 550 euros per ton, which is exactly the price on the Paris exchange,” Savic said.
According to him, the world price of sunflower and palm oil has climbed from around 800 to around 1,200 dollars per ton, while the domestic sunflower purchase price has stayed at last season’s level or fallen below it. One oil mill representative announced that the final purchase price would be published on Monday, after which farmers would meet again to decide on their next steps.
Fertilizer costs up, wheat parity disrupted
Savic also raised the issue of rising production costs at the meeting. Mineral fertilizer, he said, cost 62 dinars last year and now costs 80. Seed wheat sells for 80 dinars per kilogram, while commercial wheat goes for around 20 dinars, a ratio of four to one against the earlier parity of two to one.
“Last year mineral fertilizer cost 62 dinars, and now it is 80. Seed wheat costs 80 dinars, while commercial wheat is 20 dinars. That is a ratio of four to one. Previously that parity was two to one. The parities are completely disrupted,” Savic said.
The gap also shows up against world grain prices. Domestic wheat sells in Serbia for around 20 dinars per kilogram, while foreign exchanges price it at around 240 euros per ton. Corn is bought in Serbia at 19 to 20 dinars per kilogram, against around 250 euros per ton on the international market.
Three oil mills control purchasing, producers describe a monopoly
Sunflower purchasing in Serbia is controlled by three large oil mills, a position producers describe as a monopoly. A further problem is that sunflower, unlike grain, cannot be stored on the farm, since it heats up and spoils in storage, and must be sold right after harvest, while the oil mills have the capacity to dry, process and hold it throughout the year.
The price of milk also came up at the meeting. Predrag Veljkovic, president of the Association of Milk Producers of Sumadija and Pomoravlje, said milk purchase prices have been cut several times since the start of the year, with dairies citing large stockpiles as the reason. According to him, drought and a shortage of livestock feed in Serbia and across Europe mean milk prices are expected to rise in the coming period.
What happens next
The meeting proposed setting up a standing body for cooperation between producers, buyers and processors, possibly through existing mechanisms of the Serbian Chamber of Commerce. Farmers’ association representatives also called for greater transparency in how purchase prices are set.
In the view of the Stig association’s president, no concrete agreement was reached at the meeting, and the state has not shown it has a mechanism to influence the level of the purchase price. For now, the practice of buying at an advance price, with no final price published, continues. The next date both sides mention is Monday, when the oil mills are due to publish the figure that will show just how meaningful the promised increase really is.
