There will be no shortage, possibly higher prices

The representatives of the bakery industry requested a new meeting with the Government, while the Ministries of Agriculture and Economic Development asked bakers and traders to provide them with data on their current stocks and needs for the next three months.

The topics of the meeting, which will probably be held at the beginning of next week, should be the administrative support of the Government in the future procurement of flour and grains, because they are announcing a ban on exports from Serbia, while they will introduce quotas for the countries of the region as much as each country can export. They will also discuss the future definition of prices due to the drastic increase in the prices of grain, flour and fuel on international markets, as well as the possibilities for the state to reduce duties or otherwise help bakers in order to avoid a major increase in prices. One of the topics will be the announced functioning of future state commodity reserves.

Traders and flour importers still have certain stocks, but they have been reduced in recent days due to irrational and abundant purchases from citizens.

The price of a kilogram of wheat on the Novi Sad stock exchange yesterday was about 37 dinars, which is about 30 cents. The price of a kilogram of flour including transport costs to Montenegro, customs, VAT... in wholesale is now around 50 cents. On international exchanges, prices continue to rise due to the Ukrainian crisis, so in France, a kilogram of wheat is already over 40 cents. Russia and Ukraine have already restricted grain and oilseed exports, which affects stock prices.

"Vijesti" interlocutors said that there can be no shortages, but that prices may rise, which will depend on the future decisions of the Government of Serbia on the export ban and the quotas that will be set for the countries of the region. Serbia introduced similar bans at the beginning of the pandemic crisis two years ago, but abandoned them after ten days. Exporters from Serbia hope that this will happen now.

Only one mill remained in operation in Montenegro, "Šajo" in Danilovgrad, while the others stopped working even earlier. One of the reasons for the near shutdown of the Montenegrin milling industry is the government's lack of concern for this activity and the wrong tax policy. The VAT on flour is seven percent and on wheat is 21 percent, which made it impossible for millers to earn money. The high rate of grain imports also prevents the development of animal feed production.

According to "Vijesti" information, "Mlin Šajo" ordered 1.800 tons of wheat from Serbia in three train compositions earlier. One train was loaded and the customs procedure was initiated, but the procedure was stopped due to the export ban and pending quotas.

The association of the mill, bakery and pasta industry of Serbia "Žitounija" sent a request yesterday to the Ministry of Agriculture and the Chamber of Commerce of Serbia in which they oppose the export ban, and in particular they ask that flour be exempted from the ban because they have more than enough of it in their stocks.

"The export of flour should not be banned, we have it, we don't know what to do with it. We ask that such a decision not be made, and if it is made, that it be canceled immediately," said the president of that association Zdravko Šajatović, and the newspaper "Danas" reports.

He added that the stocks of wheat should be checked and if they are judged to be insufficient, export should be banned, but the introduction of quotas should be considered because the new harvest will begin in four months.

Šajatović said that the reasons for the enormous stocks of flour are multiple, because in the last 13 years consumption has been falling because the number of inhabitants in Serbia is decreasing, and for several years the export of flour has been in constant decline.

The price of oil started to fall yesterday

The price of oil on international exchanges started to fall yesterday, from $127 per barrel the previous day to around $110.

However, it is still a significantly higher price than ten days ago, when prices were adjusted in Montenegro.

Analysts see the reasons for this decline in the repeated request of the United States of America and some other large consumers, the association of producing countries OPEC, to significantly increase production.

Yesterday, the authorities in Washington created a paradox in their diplomatic practice, because Venezuela, which has been under their sanctions for years because of its anti-American government, sent an offer to lift the sanctions if this country exports its oil to them. This offer was made a day after the US imposed sanctions on the import of Russian oil. Of the total oil consumption in the USA, about eight to ten percent was oil from Russia, so now the plan is to replace it with Venezuelan oil, as well as to buy less from OPEC countries from the Persian Gulf.

Venezuela has large oil reserves, and is one of the major producers, but due to sanctions, they had problems with placement.

All this, according to analysts' opinions, could influence Arab countries to increase production, so stock market traders began to lower prices.