Romania – the largest granary market in SEE, report says

Southeast Europe’s grain industry grows despite stormy couple of years.

The granaries of Southeast Europe – Bulgaria, Moldova, Romania and Serbia – have faced significant challenges over the last couple of years, from a global pandemic that put food security at the forefront of concerns to a war whose effects are still reverberating on the grain market. Despite this, all four countries posted double-digit revenue growth rates in 2021, according to the most recent industry report by business intelligence and news provider SeeNext.

The report covers 2,369 companies engaged in crop cultivation across Bulgaria, Moldova, Romania, and Serbia. It includes an in-depth financial analysis for the three-year period between 2019 and 2021, providing valuable insights into the market dynamics and regional performance within each country. In addition, SeeNext lists the most significant investment projects and mergers and acquisitions deals in each country over the last three years. A special analysis on the import and export of grain within the four countries seeks to shed light on the
significance of Ukrainian grain and whether it can indeed disrupt markets.

Operating revenue surges by 36% in 2021, Romania leads
Grain producers in the four markets generated an impressive aggregate operating revenue of EUR 7.55 billion in 2021, a 36% year-on-year jump. Romania emerged as the largest market, boasting operating revenue of EUR 3.288 billion, which is up by 43% from the previous year. Bulgarian companies grew their revenue by 37%, contributing EUR 2.17 billion to the industry’s turnover, while Serbia generated EUR 1.52 billion, or 17.4% more than in 2020. Moldova, although the smallest market, experienced the fastest growth of 52%.

Headcount declines, Romania and Bulgaria have the largest employee base
Despite the positive revenue growth in 2021, the grain industry witnessed a continuous decline in headcount in the 2019-2021 period. The total number of employees in 2021 amounted to 48,000, representing a 1.5% decrease compared to the previous year.
The majority of employees were concentrated in Romania and Bulgaria, with the West and North-West regions of Romania being the only ones to experience an increase in full-time equivalent (FTE) numbers in 2021.
Similarly, in Bulgaria, the Southwest and Southern Central were the two regions to witness an increase in employment within the sector.
Serbia’s grain production was concentrated in the Vojvodina region, accounting for over 90% of the industry’s revenue, employing 6,500 out of the total 6,900 FTEs in the country.
In Moldova, employee numbers were more evenly distributed across the three regions.

Costs increase by 16% in 2021, Moldova and Serbia experience significant growth
The grain industry’s total labour, material, and amortisation expenses reached EUR 2.8 billion in 2021, indicating a 16% annual increase. All four countries experienced notable expense growth, with Moldova and Serbia leading the way at 28% and 21%, respectively. Romania had the largest market size in terms of operating expenses, at EUR 1.2 billion, followed by Bulgaria at EUR 868 million. Within Romania, several regions exceeded the EUR-100-million threshold, with South-Muntenia recording overall expenses of EUR 330 million. The Vojvodina region in Serbia generated 95% of the total costs, while in Moldova, the aggregate operating expenses per region varied between EUR 61 million and EUR 192 million.

Fivefold increase in net profit, Bulgaria leads in net margin and return on land
The grain industry in the four countries generated an aggregated net profit of EUR 1.2 billion in 2021, marking an almost fivefold increase compared to the previous year. Romania experienced a remarkable eightfold increase in bottom line performance, and Moldova’s net financial result turned positive. The industry’s total net profit margin surged to 15.3% in 2021 from 4.3% in the previous year. Bulgaria maintained its first-place position for the third consecutive year, boasting a net margin of 23.2%, followed closely by Moldova at 17.6%. Return on land also experienced significant growth, with Bulgaria and Romania being the main contributors to the sector’s success in 2021. The total return on land
across the four markets reached an impressive 48%, a considerable increase from the 10% recorded in 2020.

Bulgaria and Serbia outperform peers in arable land capitalisation
In terms of yield per hectare, Bulgaria ranks first among all analysed markets with its wheat and maize output, while Serbia tops the list with sunflower and rapeseed, data from the countries’ statistical offices reveals. In a broader context, Serbia and Bulgaria’s average yields of sunflower seeds during 2022 also outperform European averages by 20.5% and 7%, respectively.
Ukrainian grain sows unease among farmers
Inflow of Ukrainian-grown cereals in the four markets has surged following the Black Sea Grain Initiative and the establishment of solidarity lanes. In Romania, wheat imports from Ukraine skyrocketed from a cumulative quantity of 338 kg in the three years prior to Russia’s invasion of Ukraine to 505,442 tonnes in 2022. Maize imports jumped approximately 585 times, reaching 745,968 tonnes, while sunflower imports increased over 65 times to 359,182 tonnes, and rapeseed imports soared almost 60 times to 320,835 tonnes. Bulgaria witnessed a nearly 27-fold increase in maize imports from Ukraine, reaching 17,255 tonnes in 2022. Wheat imports rose almost five times to 19,695 tonnes, while sunflower imports surged nearly four times to 943,402 tonnes. Moldova significantly strengthened its partnership with Ukraine, with rapeseed imports recording a 664-fold increase to 9,298 tonnes, sunflower imports growing over 25 times to 87,091 tonnes, maize imports jumping 14.5 times to 74,884 tonnes, and wheat imports increasing almost five times to 24,673 tonnes. Serbia’s imports from Ukraine were insignificant
over the period in review.

grain marketgranariespandemicRomaniaSeeNextSoutheast Europukrainewar
Comments (0)
Add Comment