World Grain - November 2012 - 24

COUNTRYFOCUS

Focus on Romania
Eastern European country’s grain production drops due to poor growing conditions
by Chris Lyddon

Key Facts
Capital: Bucharest Population: 21,848,504 (July 2012 est.) Religions: Eastern Orthodox (including all sub-denominations) 86.8%, Protestant (various denominations including Reformate and Pentecostal) 7.5%, Roman Catholic 4.7%, other (mostly Muslim) and unspecified 0.9%, none 0.1% (2002 census). Location: Southeastern Europe, bordering the Black Sea, between Bulgaria and Ukraine. Government: Republic. Chief of state: President Traian Basescu (since Aug. 27, 2012); head of government: Prime minister Victor-Viorel Ponta (since May 7, 2012). Economy: Romania, which joined the E.U. on Jan. 1, 2007, began the transition from Communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country’s needs. The country emerged in 2000 from a punishing three-year recession thanks to strong demand in E.U. export markets. Domestic consumption and investment fueled strong GDP growth but led to large current account imbalances. Romania’s macroeconomic gains have only recently started to spur creation of a middle class and to address Romania’s widespread poverty. Corruption and red tape continue to permeate its business environment. Inflation rose in 2007-08, driven by strong consumer demand and high wage growth, rising energy costs, a nation-wide drought, and a relaxation of fiscal discipline. As a result of the global financial crisis, Romania’s GDP fell more than 7% in 2009, prompting Bucharest to seek a $26 billion emergency assistance package from the IMF, the E.U., and other international lenders. Drastic austerity measures, as part of Romania’s IMF-led agreement, led to a 1.3% GDP contraction in 2010. The economy returned to positive growth in 2011 due to a strong export performance, but in a deflationary environment caused by bountiful crops and weak domestic demand. In March 2011, Romania and the IMF/EC/World Bank signed a 24-month precautionary stand-by agreement, worth $4.9 billion, to promote compliance with fiscal targets, progress on structural reforms, and financial sector stability. GDP per capita: $12,600 (2011 est.); inflation: 5.8% (2011 est.); unemployment: 5.1% (2011 est.). Currency: lei (RON): 3.527 RON equals 1 U.S. dollar (2011 est.). Exports: $62.68 billion (2011 est.): machinery and equipment, metals and metal products, textiles and footwear, chemicals, agricultural products, minerals and fuels. Imports: $73.12 billion (2011 est.): machinery and equipment, chemicals, fuels and minerals, metals, textile and products, agricultural products. Major crops/agricultural products: Wheat, corn, barley, sugar beets, sunflower seed, potatoes, grapes; eggs, sheep. Agriculture: 7.9% of GDP and 30% of the labor force Internet: Code: .ro; 2.702 million (2010) hosts and 7.787 million (2009) users.
Source: CIA World Factbook

Romania, in south Eastern Europe, plays a major role in E.U. grains production. But in 2012, it’s been affected dramatically by poor growing conditions. With a former Romanian farm minister in charge of piloting through planned reforms to the E.U.’s Common Agricultural Policy, Romania also has assumed a central role in shaping the legislative background to grains production in Europe. In September, the International Grains Council (IGC) cut its estimate for Romanian grains production in 2012-13 to 12.9 million tonnes from a previous estimate, made a month earlier, of 14.5 million, which was already well below the 19.2 million tonnes produced in 2011-12. The cut in the IGC’s wheat estimate, however, was small, from 5 million tonnes in August to 4.9 million in September. Romanian wheat production was 6.7 million tonnes in 2011-12. Maize took the big hit, with the IGC’s crop estimate reduced to 6.5 million tonnes in September from 8 million in August, down from a 10.5-million-tonne crop in 2011-12. SLOVAKIA The IGC left its barley production estimate UKRAINE MOLDOVA unchanged at 900,000 tonnes, compared HUNGARY with the previous year’s 1.5 million. According to the U.S. Department of AgriROMANIA A culture (USDA) attaché, wheat harvesting in A Romania this year ﬁnished nearly a month earYUGOSLAVIA lier than normal. In a report published recently, BULGARIA BU the attaché put wheat production at 4.95 million tonnes, down from 7.1 million in 2011. “Wh “Wheat exports are expected to fall to 1.6 million tonnes, about 25% lower than the previous year,” the attaché said. “Romania’s price competitiveness remains strong, however, as in September it was awarded contracts for about 300,000 tonnes of wheat for Egypt.” The attaché put the maize crop at 6.1 million tonnes, down 42%, adding that the agriculture ministry has not released any ofﬁcial preliminary ﬁgures to avoid creating any local market disturbances. “The rapeseed crop was drastically affected by the harsh win24

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