Corn is still holds the largest share in the profits of farmers, according to figures from the Ministry of Agriculture and Food. In a harvest of 4.328 million tonnes and wheat priced at around 315 levs per tonne and the average sales price difference or the profit of wheat producers came to 350 million levs. These are average figures and some manufacturers profit per tonne significantly more than the average about 80 lev. The figures are primarily for marketing wheat of the second B group, and according to the Agriculture Ministry, this formed around 43% of total production in 2012. Best results are achieved by grain producers who sold quantities for export, said brokers on the Sofia Stock Exchange. According to them until the end of 2012 the country exported 1.3 million tonnes and there is a grain surplus remaining in the warehouses of about 900,000 tonnes. This quantity will surely be exported in spring, as winter exports are limited due to poor weather conditions.
Producers of sunflower, soybean and canola cannot complain either. In this segment the volumes are not that great but revenue per hectare is higher. This is especially true for sunflower where late last year, prices of sellers exceeded 1100 levs per tonne. This happened in the presence of a a surplus, estimated to be about 800 thousand tonnes, after deducting the necessary amount for domestic consumption.
Grain production is the most thriving industry, and is generating the largest revenue not only in Bulgaria but also in the entire European Union. According to Eurostat data best achievements are shown by producers of basic agricultural crops, especially of large farms with large areas and modern technologies of cultivation. On average, a worker in the plant growing sector in the EU get about 74,400 euros in gross income per year, which is more than the peak figure back in 2007. In Bulgaria, things are different when it comes to financial results, but its share in total agricultural production is a match. A tenant with 10,000 decares of land in the good grain regions as Dobrudja and production of about 400 kg per decare has generated an average profit of nearly 320,000 levs, after deducting production costs and land lease costs. This, of course, is the highest rate of profit, while in smaller farms and in other areas things are not so good, but give reason to anticipate new investment in the grain-producing regions and cultures.
As for the grain trade on commodity exchanges in the country the end of 2012 was calm. Despite some revival, registered in the last two trading sessions, there were no significant changes in prices. In Plovdiv a week before New Year’s day a bids for the purchase of 11 thousand tonnes wheat was submitted under the Public Procurement Act. The maximum quoted buy price was at 420 levs per tone, VAT excluded, including transportation to the buyer’s warehouse. Quotations sell reached 480 levs, which leaves a price gap of 60 lev per tonne. Brokers found this price reasonable, but probably for after a month.
In Sofia the commodity exchange closed 2012 at unchanged prices. Sellers want 530 levs per tonne of wheat from the second B group, but at this level there is no demand. Corn is available for 520 lev per tonne, while demand is much lower – at about 400 lev per tonne, and this clearly shows that it is not likely a deal to be reached soon.
The BANKER
