Thanks to its location and relatively large size among European countries, Romania has become a grain exporter competing with its neighbours on the Black Sea. Constanta port is the main gate for agricultural transportation, the storage capacity in the port expanding continuously. However, wheat production is forecast to fall from 8.6 MMT in 2019/20 season to 8.3 MMT in MY 2020/21, a 3.5-percent decline.
Romania is a traditional agricultural country and plays a unique and important part in European agriculture. The soil is fertile and the climate is favorable for agriculture, animal husbandry and horticulture. With a total area of 238,000 sqm, Romania is one of the countries of the most pronounced agrarian profile in the European Union. Having about 15 million ha of farmland, of which more than 9 million ha devoted to arable crops, Romania owns almost 1/3rd of the total agricultural land in the EU.
Both crop production and animal production in Romania follow an upgrowing trend. Main locally produced agriculture products are wheat, corn, barley, sugar beets, sunflower seed, potatoes, grapes, pork, poultry, milk, wool and eggs.
The contribution of agriculture to the GDP formation in Romania fluctuates between 4% – 6%, as agricultural production is highly dependent on weather conditions, the sector counting over 25% of the working population, figures which are high above the EU average.
The agricultural land is fragmented into millions of plots which does not allow intensive agriculture. Romania’s agriculture is still a subsistence and semi-subsistence one, practiced in small farms which do not allow horizontal and vertical integration in the production chain. Therefore the modest performance of the Romanian agriculture sector places Romania far from having the agricultural competitiveness of the other EU member states. Farms with more than 100 hectares, or 250 acres, make up a very small proportion of Romania’s farms. However, commercial farms are investing to increase productivity.
In Romania agriculture is a significant contributor towards national economic performance. The significant share of the agricultural sector in the Romanian economy also results in its products being exported worldwide. In 2016 the total external trade in agricultural products, mainly wheat and corn followed by sunflower seeds and oil, rapeseeds, barley, live sheep and goats, chicken meat, and live cattle, amounted to 6.2 billion Euro, more than 9% of total Romanian exports. Romania is ranked 1st in the EU for growth of agricultural exports.
Romania is consolidating its position in the European Union in terms of grains and oilseeds production. Romania’s share in total EU planted area rose to 9% in 2018 while the share in the EU’s harvested production stagnated at about 5% due to low yields. In 2018, total grain production rose by 6%, supported by favorable weather conditions over the course of development.
Thanks to its location and relatively large size among European countries, Romania has become a grain exporter competing with its neighbours on the Black Sea. Constanta port is the main gate for agricultural transportation, the storage capacity in the port expanding continuously.
According to USDA Foreign Agricultural Service’s (FAS) report released on 14th May, Romania’s grain production is forecast down by 2.6 percent in marketing year (MY) 2020/21 from MY 2019/20. Dry weather conditions will reduce current MY winter crop yields. Soil moisture levels remain low in eastern and southeastern regions, but are more favorable in western and southwestern regions. Rains in early May helped winter crops partially recover and provided a strong boost to recently planted spring crops. Corn exports are expected to reach record levels in MY 2019/20.
Romania’s area planted for grain ranges between 5.3 and 5.6 million hectares (HA), depending on the total oilseed acreage. Wheat and corn cover about 85 percent of the total grain area. The mild 2019/20 winter prompted wheat and barley out of winter dormancy earlier than usual. Mid-March frost came unexpectedly after above-normal temperatures. As spring unfolded, plants became more stressed because of increasingly dry conditions, particularly in the south and southeastern regions. In some instances, farmers had to operate irrigation systems as early as of March. Precipitation and soil moisture levels have been more favorable in Romania’s western and southwestern regions. The mild winter and dry conditions also increased the risk of pressure from pests.
Based on fall planting and weather conditions, Romanian grain production is forecast to decline in MY 2020/21 by 2.6 percent, despite the 2.2 percent increase in the area planted. As a result, total grain exports are projected to decline by 5.5 percent in MY 2020/21, after MY 2019/20’s estimated 9.5 percent increase. Amid fears that grain and oilseed stocks would run low, the Romanian Government suspended temporarily oilseed and grain exports to non-EU markets in mid-April.
According to Ministry of Agriculture data, as of April 2020, Romania had just over 1 million HA of irrigable land, with 844,000 HA under irrigation contracts. However, the irrigated area as of late April 2020 was around 200,000 HA, less than 10 percent of the total area planted. Water costs associated with irrigation are covered by the Romanian Government. Funding availability, irrigation infrastructure development, and farmers’ access to irrigation equipment remain ongoing issues.
Positive developments in grain yield over recent years are partially due to better access to inputs, such as fertilizers. Total fertilizer usage has grown spectacularly in Romania, with potassium-based fertilizers used 230 percent more than 2010, followed by phosphor with 86 percent, and nitrogen with 62 percent in 2018 versus 2009. For organic fertilizers, the ten-year growth levels were 37 percent in terms of area and seven percent in terms of volume.
WHEAT YIELDS TO DECLINE
USDA post estimates the MY 2020/21 planted area for wheat at 2.2 million HA, a 5.2-percent increase over the previous year. The higher wheat area is partially attributed to the decline in Romania’s rapeseed area. Yields are expected lower this MY due to continued dry weather, notably in some of Romania’s most productive counties in its southeastern and eastern regions. Potential production increases in other areas are not expected to offset these reductions. Average wheat yields are forecast to decline by eight percent in MY 2020/21 from the previous year, which would be a five-year low in average yields. Total wheat production is forecast to fall from 8.6 MMT in MY 2019/20 to 8.3 MMT in MY 2020/21, a 3.5-percent decline. This estimate may be further adjusted, pending weather upcoming conditions.
Imports are forecast to increase by 10 percent, while exports are projected to be stagnant. Egypt, which was the leading wheat buyer during the first seven months of the MY 2019/20, increased its purchase from Romania by 10 percent. Jordan (500,000 MT) ranked second, followed by South Korea, Sudan, and Thailand outside EU. Only 20 percent of Romanian wheat exports are shipped to other EU countries, with Spain and Italy as Romania’s main markets.
CORN HARVEST TO REACH 14.0 MMT
The MY 2020/21 corn area planted is forecast to remain at 2.65 million HA following last year’s sharp eight percent increase. The corn area may see a marginal uptick if some farmers convert winter wheat and/or barley acres into corn, similar to last year’s corn displacement of the rapeseed area. Some corn may also displace sunflower acres, given this year’s lack of a neonicotinoid derogation for sunflower. Although farmer organizations pushed hard for additional sunflower and corn neonicotinoid derogations, in January 2020 the Ministry of Agriculture approved a derogation only for corn.
The spring 2020 corn planting season is complete. Given current weather conditions and assuming similar precipitation levels to last year, corn yields are anticipated to decline only marginally. The corn harvest is forecast to reach 14.0 MMT in MY 2020/21, slightly below last season.
Corn exports in MY 2019/20 are forecast to decline somewhat from 2019/20’s record of 7.1 MMT. Romania will likely ship nearly half that much to other EU countries. Domestic feed consumption is forecast to remain relatively stable.
Romanian’s corn area increased by about 10 percent year-on-year (250,000 HA) in MY 2019/20, as poor conditions for rapeseed incentivized some farmers to convert rapeseed acres into corn. Total corn production reached an estimated 14.3 MMT in MY 2019/20, a 2.14-percent increase over previous year’s crop. Considering the large harvest, corn exports are forecast to expand by 22 percent. The higher prices in earlier calendar year 2020 boosted exports. During the first four months of MY 2019/20, exports to non-EU markets doubled, while deliveries to EU countries grew by 20 percent.
Romania’s main non-EU corn markets are Turkey, Egypt, South Korea, and Lebanon. Spain, Italy, and the Netherlands are its primary export markets within the EU. About half of corn exports will be delivered to non-EU markets. Domestic feed consumption is expected slightly lower, due largely to the continued presence of African swine fever.
Barley remains mainly an export crop. Although winter barley planting conditions in fall 2019 were difficult because of the drought, they were better than conditions for winter rapeseed, which should translate into a marginally higher area for barley. Like wheat, the barley crop was in good condition until about mid-March, when weather conditions began to negatively affect plant development. Dry weather is expected to lower yields by seven percent, especially in eastern and southeastern areas. Based on the current crop conditions and area, total barley production is forecast at 1.55 MMT, a threepercent decline from 1.6 MMT in MY 2019/20. Exports are forecast to marginally lower due to the forecast shorter harvest, with 85 percent of Romanian barley exports shipped to non-EU markets.
MY 2019/20 barley production increased by three percent and exports are forecast to grow marginally. During the first seven months of MY 2019/20, barley exports grew by 10.6 percent. Saudi Arabia remains Romania’s top market, followed by Libya and Turkey. EU deliveries accounted for under 20 percent of exports, with Spain and the Netherlands as major buyers.