The cash shortage reduced grain transactions significantly, considering that wheat production was not very good this year, amounting to 5.22 million tons, down more than one fifth year-on-year. Moreover, traders had stocks, and supply is rather large on the international market.
Viorel Matei, President of the National Federation of Agricultural Producers in Romania, told Business Standard that one kilogram of wheat now costs up to RON 0.4 (€0.09), not including VAT, compared to RON 0.46-0.48 (€0.11) one month ago. On the foreign market, wheat trades at €110 per ton, plus transport expenses, which means RON 0.43-0.44 (€0.10) per kilogram. The price of corn, however, is rising, as there is no supply on the domestic market, and countries such as Hungary and Serbia are offering lower prices, currently of some RON 0.36-0.38 (€0.08-0.09) per kg. A 10 percent increase is expected for January-February 2010 at the international level.
“We are talking about a lack of transactions, and quantities sold are low. Due to a cash shortage, purchases are within the limit of available amounts. The pressure is on agricultural producers who cannot sell their crops,” said Mihai Anghel, owner of Cerealcom Dolj, a major grain producer in Romania.
Anghel said that the fact that the “First Silo” program is not operational adds to the deadlock. This program, initiated by the government, consists in issuing certificates of deposit for storing production in licensed silos, with which producers will be able to obtain bank loans. The businessman added that the largest banks were not interested in the program.
With a total surface of 14.7 million hectares of farm land, of which only 9.4 million hectares are arable land, Romania ranks second, after Poland, among Central and Eastern European countries and seventh in the EU 27, after France, Spain, Poland, Germany, Italy, and the United Kingdom, with a share of eight percent in total used farm land.
