July 17 (Bloomberg) -- Serbia’s corn harvest may be halved this year because of drought and the damage could be even worse unless the crop gets sufficient rain in the coming weeks, the national association of grain exporters and producers said.
Corn was sown to around 1.25 million hectares (3.1 million acres), according to official statistics and “only a month ago it was in great condition and our estimates were for a harvest of around 7 million tons,” Vukosav Sakovic, the head of Zita Srbije, told Bloomberg news in a phone interview today.
“Following 40 days of high temperatures and drought, the output will probably be between 3.5 million and 4.0 million tons” as bad weather “came too early for corn, during the pollination stage,” he said, adding that a week ago, the “damage would have been estimated at 30 percent.”
Corn, along with wheat and other grains, is among Serbia’s top export earners, which generated 293.8 million euros ($360.8 million) worth of revenue in the first five months of 2012, or 37.6 percent more than last year. Grains accounted for about 8 percent of Serbia’s total five-month exports this year.
Rainfall could stop further declines in expected output while a new period of high temperatures and drought can only make things worse, Sakovic added. “Unfortunately, no weather forecast indicates significant rains.”
The drought has not affected wheat, as this year’s harvest is expected at 1.9 million tons, in line with the Statistics Office’s estimates, and combined with 100,000 tons in rollover stock, Serbia could have about 400,000 tons of wheat for exports, he said. Serbia requires 3.5 million tons of corn and 1.6 million tons of wheat for its own needs.
Following last week’s increase, grain prices in Serbia retreated this week “mainly on speculation that an export ban could be imposed,” Sakovic said, adding that “it is difficult to track where the speculation came from, but it worked.”
Corn, which traded at 25 dinars ($0.26) per kilo at the Novi Sad Commodity Exchange last Thursday and Friday, now trades at no more than 23.5 dinars and the “trend we see is completely different to that in neighbouring countries, or the rest of the world, where prices are on the rise,” he said.
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