Forced Buying-Up

Although Bozovic forbids the farmers to "make good the damage", they suffered during Markovic's policy of "import competition", he cynically added that he has to cure the effects of federal policy and that these measures "do not affect the primary production, primarily the farmers' sector, but that these prices only imply the existence of the internal economy within the manufacturing industry". Since the Serbian government has decided that "the entire surplus of the agricultural products should be bought up by the republic department for stocks, at market prices or prices from the declaration" - the farmers and consumers have realized that "the starvation era is before us".

At the trade exchange in Novi Sad between January 23 and 29, it had been noticed that the gap between demand and supply has broadened in the following sectors: wheat, corn, wheat flour, potatoes, sugar and cooking oil as well as at the cattle market for pigs and young beef. The buyers are being left empty handed, while the prices are sky rocketing from day to day. During the last week, at this market 4500 tons of wheat were offered for sale and the demand amounted to 35100 tons. Only 1000 tons of wheat at a 10,5 dinars per kilo were agreed on. That practically refers to the first 1000 tons of wheat which this year "passed" through the trade exchange in Novi Sad, so it is impossible to say anything about the short-term price tendencies, except that the decrease of flour price, imposed by the government, is far from realistic.

Zoran Kozarevic, the director of the trade exchange in Novi Sad, says that the considerable discrepancy between the demand and supply can be explained by the fact that the stocks of all staples have now been turned into "cash money", since the trade, as a rule, is being conducted through "advance payments". Since inflation is obviously rising, the producers are buying only the necessary quantity to satisfy the demand for cash. Corn, which has traditionally served to protect the farmers from inflation (since it can be stored for long periods), has now become the hero of a strange story. First a record harvest was forecast, and then the farmers have started using it as for heating instead of expensive coal. Corn is slowly becoming known as "yellow gold". Last year in Novi Sad it had been sold at a 50% higher price than the price of wheat, at a price between 14 and 15,5 dinars per kilo.

The high price of corn is directly related to the shortage of cattle. The supply of both sugar and oil at the trade exchange in Novi Sad was considerably lower than the demand.

It would be interesting to note that the compensation deals, which are practically the only ones being concluded between the Yugoslav republics, are almost non-existent in the last few days. For main barter agricultural products at the trade exchange in Novi Sad the following products were offered: 5000 tons of coal, 1000 tons of salt, 500 tons of soda, 3000 tons of cement, 100 tons of plums and 2500 tons of chemicals. None of the deals have yet been concluded. It would be difficult to assess why nobody is taking these goods, but it is probably due to the fact that hardly anyone can get the permission to export food to Bosnia. There are reports of great shortages in Bosnia. It is estimated that this republic needs 260 000 tons of wheat and the same quantity of corn. The same is with oil and sugar. Macedonia is in big trouble as well. The retail price of oil has reached 187 dinar per liter in Macedonia, and sugar costs 120 dinar per kilo. If Bozovic succeeds in keeping the price of oil in Serbia at 100 dinars, and the price of sugar at 60 dinars, we can expect very soon that Macedonia will be better supplied than Serbia.