Corn reserves spent, if tax goes bankrupt in Kosovo

Kosovo has imported wheat to the largest extent from Serbia, but since November 2018, when the Kosovo government imposed the 100 per cent customs fee for imports from Serbia, the purchase of wheat from this country has dropped completely. While securing wheat as the first material for producing flour from other countries in the region and the European Union has raised costs, including the cost of transport, Kosovo millers' association say.

Kosovo has never managed to provide the needs of the wheat-productive population. It is constantly dependent on import, which mainly came from the state of Serbia.

Meanwhile, from the time the customs tax is implemented for imports from Serbia and Bosnia and Herzegovina, mills in Kosovo are no longer competitive with the countries of the region, especially North Macedonia.

Currently, according to Kosovo Customs data, the import of flour for the first two months of this year from Northern Macedonia to Kosovo has reached over 340 thousand euros, while in the same period in 2018, that amount has been around 3000 thousand euros.

Bashkim Zanullahu, chairman of the Kosovo miller association in a campaign for Radio Free Europe, shows 98 flour factories operating in Kosovo. Currently, according to him, 50 have already stopped activity, while more than 40 are working on smaller grain reserves.

The Kosovo flour industry will not survive. Reservations are close or zero. We are under enormous obligation to citizens who have deposited grain in mills for processing. The reserves that have been collected from last year's harvests have already been spent. Most mills are bankrupt for this, and the rest are expected to disappear very quickly”, Zejnullah said.

Representatives of the Gruri Manufacturers Association also confirm that local grain reserves have been spent too early, while businesspeople have worked more import from Serbia and other countries in the region. The chairman of this association, Paul Djurovic, told Radio Free Europe that there is currently no import of wheat from Serbia, while flour is being imported from countries in the region and Europe. He says that after the customs fee is imposed, the price of flour has been expensive from 28 euros per 100kg to 38 euros per 100kg.

For the needs of the Republic of Kosovo, for one year it needs 410 thousand tons of wheat, while in the most successful years we have produced 260 thousand tons. What it means is that Kosovo has consistently needed 141,000 tonnes imported. So we have imported most from Serbia, because it is known that Serbia has large grain reserves. Farmers have already surrendered and are buying flour ready, instead of having ready-to-reserved”, Djurovic points out.

Because of the lack of wheat in the market, Bashkim Zejulah says flour in Kosovo's market is entering from Northern Macedonia, at a much cheaper price than the country's final flour product.

Northern Macedonia, according to him, the first subject -- or wheat -- provides it in Serbia, processes it and packs it in Macedonia. But the Kosovo market is cheaper. According to him, flour from Kosovo to the market is presented as much as 15 per cent more expensive than flour from Northern Macedonia.

“Macedonia is not wheat producer, but are already exporters for Kosovo. They buy wheat in Serbia, work in Macedonia because they have trade rights, but export flour to Kosovo. Macedonia does not have that spending of 20 or 30 euros, which we have from the highest countries. And the application of this tax, I don't know, Serbia's product is entering Kosovo, but in another form”, Zejnullah said.

Zejnullahu shows that the milling factories in Kosovo cannot be competitive with the final product, flour, since, according to him, supply from other wheat countries due to transport, on the Kosovo market is more expensive for 20 euros in 100kg than flour coming from North Macedonia.

On the other hand, businesspeople who handle this event in northern Macedonia agree that the amount of flour exports in Kosovo has increased, but not at high percentages.

Ramadan Veyseli, owner of the Mullyr Fabric “Balkan” in Tetovo, simultaneously chairman of the milling group in Northern Macedonia's North-Western Odead, in a conversation for Radio Free Europe, said that the export of flour from Northern Macedonia to Kosovo has increased by up to 30 per cent.

The 400th and 500th type Michael in Kosovo has mostly been introduced by Serbia, and after the tax is imposed, import from Macedonia has begun to rise, but not in the percentages being trumpeted in Kosovo. I don't believe that even 30 per cent enter Kosovo flour from Macedonia, compared to the period before the tax is imposed”.

The largest subx0> is local (of North Macedonia), while the other amount is imported from Hungary, Serbia, Austria and Croatia. The import most of all depends on Serbia, because it is closer to”, Veyseli says.

In Kosovo in 2016, 37 million pounds [37 million kg] of flour worth 8 million euros have been imported, and during 2017, Serbia's state in Kosovo, 22 million pounds [22 million kg] of flour, exceeding 4m euros.

The Kosovo government on November 6th last year had initially imposed a 10 per cent customs duty on products imported from Serbia and Bosnia and Herzegovina. This customs tax rose 100 percent on November 21.

The European Union and the United States of America are calling on the official Pristina to suspend this tax so that the continued possibility of dialogue in Brussels, between Kosovo and Serbia.

Serbia's president, Aleksandar Vuciq, has said he will not participate in the dialogue, without taxes being removed.

But, Kosovo Prime Minister Ramush Haradinaj is insisting that the tax will be lifted only when Serbia recognises Kosovo's independence.