Crop yield for wheat, maize and sunflower has dropped by 40% to 70% this year, causing the prices of raw materials to double.
Romania is now faced with the most serious decline in agricultural output since 1990, which resulted in losses worth billions of euros and caused imports to skyrocket, according to the National Statistics Institute data.
The most severely affected crops were sunflower and wheat. Sunflower output fell 68% (from 1.6 billion tonnes to 522 thousand tonnes) and wheat output by 44% (from 5.6 billion tonnes to 3 billion tonnes). The main factors behind the decline were a decrease in farmed land and, in particular, the drought and the temperature differences that producers were faced with.
In the first seven months of the year, food and livestock imports rose by 28% compared with the same time last year, and reached 1.37 billion euros, while exports of these products amounted 289 million euros. The highest increases were for grain, where imports amounted to 165 million euros, up 120% on the same time in 2006.
As a result, the deficit in food and livestock trade contributed 10% to Romania's trade deficit in the first seven months of the year, which amounted to 11.4 billion euros.
Overall, the agricultural output (both vegetable and animal) is estimated to go down by 11% in real terms this year, compared with the 3.3% increase last year. Agriculture's share in the Gross Domestic Product (GDP) will stand at just 6.5% (compared with 8% in 2006). Ten years ago, agriculture accounted for 18% of the GDP, while its share of the GDP in 1990 stood at nearly 22%. This year, the impact of the drought on the economy (through the decline in production and increased imports) is estimated to be worth more than one billion euros.
According to data provided by the Ministry of Agriculture and Rural Development, this year's estimates point to a sunflower output that will not exceed 522,000 tonnes. "Output has fallen by three times compared with last year and the low amounts of sunflower coupled with high prices (double those last year) have made business owners in the vegetable oil industry resort to importing seeds and raw oil," stated Viorel Zichil, chairman of the Association of Oil Business Owners, Ulprod.
Sunflower prices have risen quickly this year reaching the current 1.4 RON per kilo against 0.7 RON per kilo at the same time of 2006.
The low amount of raw materials has led to players in the vegetable oil industry importing sunflower seeds from EU countries, as well as raw oil. "We need 400,000 tonnes of seeds or oil equivalent, which we started to take from the EU countries," explained Robert Arsene, Agricover general manager.
The repercussions are indicated clearly in the shelf prices of products, where prices for vegetable oil have doubled compared with the first few months of last year.
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