The wave of large increases in a number of commodities, such as bread, milk, cheese, eggs and meat, due to disruptions in global supply chains and, in particular, the spike in feed prices, is coming to a halt. according to estimates, which raises further concerns among consumers.
Brussels is giving a lifeline until the cost of buying feed is passed on to the consumer, through their decision to enable the Member States to provide financial support to farmers with national resources. The decision taken yesterday at the Agriculture Council meeting in Luxembourg comes at the right time for Cyprus, where due to the rapid rise in feed prices farmers have found themselves in a difficult position, while the difficulties that existed due to the pandemic still exist by reducing the tourist flow.
The Minister of Agriculture, Rural Development and Environment, Costas Kadis, speaking to “F” referred to the two separate proposals submitted to the Council of Ministers and which Cyprus supported along with 18 other states.
The first proposal came from Belgium and concerned the pork crisis. In most Member States there is an increase in production, while a decrease in the producer price. Due to this situation in Cyprus, there is a decrease in the slaughter of local pigs and a vertical increase in imports of frozen. The Minister of Agriculture, in his intervention, referred to the many factors that contribute to the deterioration of the sector. As he said, in Cyprus there is a dangerous combination of parameters, such as the low price of pork, the increase in the price of feed and the decrease in demand due to the reduced tourism activity brought by the coronavirus pandemic, which make the pig sector unsustainable. . Mr. Kadis claimed that other sectors of Cypriot livestock are facing similar problems and called on the Commission to take urgent measures to address the problem.
The second proposal came jointly from Hungary and Austria to extend the temporary framework for state support measures. Cyprus also supported this proposal, taking into account the multiple problems created by the coronavirus pandemic, but also other factors, such as the increase in production costs, especially in the livestock sector.
According to the minister, the actions taken by a group of countries, including Cyprus, paid off, as it seems that the Commission is oriented towards extending the temporary framework for providing state support measures for at least another six months.
According to Mr. Kadis, this extension for the first half of 2022, will enable Cyprus to provide assistance to farmers with the tools of the Commission so that it is not considered an intervention. At the same time, he pointed out that the entire supply chain should shoulder the increase in the price of feed and not just farmers.
He noted that a group of technocrats in the ministry has already been instructed to submit proposals for support measures for each sector separately, in order to provide temporary assistance until the market is self-regulated.
The agrarian movement is concerned
In the last few days, agricultural organizations have been holding rallies in the presence of stockbreeders and receiving the message of the lack of grain in the market, the sharp rise in feed prices, as well as the problems caused to domestic production by the prolonged drought.
The agricultural movement understands the problem of the smooth transport of grain to Cyprus, but argues that not all farmers are served when they need it. At the same time, they call on the Ministry of Agriculture to find mechanisms for monitoring grain prices, so that there is no scandal on the occasion of the 50% increase in international prices.
Importers meet the needs in cereals
Due to the coronavirus pandemic, there are delays in container shipments, while at the same time there is a vertical increase in transport costs. As a result, part of this increase is passed on to the prices of products and raw materials and ultimately to the consumer. At the same time, according to grain traders, many of the old ships are now sold for scrap, to ship recycling units that pay high prices. This, they point out, caused a shortage of ships, but the market was covered with new ships, which, however, have more than doubled their fares. For example, the cost of the fares of a specific ship from Romania for the transport of grain cost on 16/7/20 $ 15 per ton, while the chartering of the same ship on 9/9/21 cost $ 49. At the same time, the charter of a ship from Argentina for the transport of soybean meal on 14/1/21 was $ 39.50 per ton, while eight months later on 14/9/21 the charter amounted to $ 89.
The Feed Association claims that there is enough grain in the market. Specifically, he points out that by October 15, 42,000 tons of feed materials will arrive, a quantity that adequately covers all the needs of the place.
Further, importers are committed to meeting the needs of troubled breeders who do not have closed orders, with cuts from others who have closed large batches. They emphasize that after October 15 there is expected to be a continuous flow of goods to meet the orders and needs of breeders, but at increased prices.
In a meeting with the Minister of Agriculture, the feed importers asked the officials of the Ministry of Agriculture to contact the five agricultural organizations and give them a list of the farmers who do not have to feed and they in turn pledged to serve them from the ships coming at current prices. According to the importers, the officials gave only one person whom they served immediately.
With regard to strategic stocks, the Ministry of Agriculture collects statistics to decide how stocks will be held in accordance with the law. According to feed importers, if there were strategic stocks and there was a proven shortage at this time and the state decided to release quantities to cover the shortage, it would have absolutely no effect on the price, because according to the law and its regulations EU stocks should be released at the current replacement price which today is at least € 20- € 30 higher than the prices of orders placed on imports and which closed 4-6 weeks ago.