1. Best agricultural year of the last five years
Romania had its best agricultural year of the last five years in 2011, as wheat, corn and sunflower crops were 20% or 30% higher than in 2010. The money that entered the economy from these crops made its mark in the third quarter of the year when the sector helped the economy grow by 4.5%.
The sector will remain top contributor to this year’s economic growth and will also increase its share of the gross domestic product to 7.5%, according to ZF estimates, considering the other sectors did not perform as well.
2. Reverse taxation
The government introduced the reverse taxation for grain and technical crop trade. This step, which is valid for the trade in wheat, rye, barley, corn, soy, rapeseed, sunflower and sugar beet will remain in force for two years until May 31, 2013.
It entails elimination of the value added tax for every link of the producer-intermediary-trader-processor chain; this tax will be paid by the final buyer of the products.
The representatives of the government hope to see this measure reduce tax evasion in this business. More traders at the time announced it would give a certain boost to their business, but said that some of the small farmers would suffer as a result, because they would not be able to get the VAT back from the government.
3. Record farming year brings out surprise competitors
Jean Valvis, the man who created the Dorna and LaDorna brads, or brothers Ioan and Viorel Micula, who own the European Drinks group are among the country’s top ten corn farmers this year, according to a ranking of cultivated land sent to ZF by the Agricultural Payments Agency.
Jean Valvis was fifth in this ranking, followed by Micula brothers. The number one this year is TCE 3 Brazi, owned by Culita Tarata, followed by Agro Chirnogi and Maria Trading, companies controlled by Lebanese businessmen.
4. Second highest corn harvest in the EU
Romania ranked second among corn farmers in the European Union, with an output estimated at more than 11 million tons, behind France, whose output stood at 15.9 million tons, according to data provided by Cocereal, a grain trader association.
Moreover, Romania is ending the year among the top ten corn farmers in the world for the second time, leaving behind major producers like Russia and India. Corn output has been on the rise in the last four years, gaining 2.6 million tons in the process. Moreover, this year’s crop is 15% higher than last year.
5. Porumboiu, Tarata and Anghel made EUR60 million from wheat
Adrian Porumboiu, Culita Tarata and Mihai Anghel, three of the leading agricultural producers in Romania got record high wheat harvests this year, 330,000 tons. The total output of the three farmers is worth EUR60 million, calculated at a EUR180 quote on international markets.
6. Mihai Anghel has EUR2.5 million to spend on land
Mihai Anghel, owner of Cerealcom Dolj and Olt, farming businesses that posted EUR60 million and EUR11.4 million revenue last year, took out a EUR2.5 million loan from BCR to buy land. The businessman will use the money to buy 2,500 hectares of land, ZF has estimated based on an average price of EUR1,000 per hectare. In all, the businessman farms 25,000 hectares rented in Dolj County (southern Romania).
7. Drought in the fall raises doubts about 2012 rapeseed harvest
The overly long drought this fall will drive up the costs farmers will have to incur for the 2012 crops, could lead to lower output and could also compromise the entire rapeseed harvest next year.
Although unlikely, if the entire rapeseed crop were lost next summer, Romania would stand to lose about EUR350 million at the current prices on international markets.
8. Cargill bought a silo and a feed business
Cargill, the largest grain trader in Romania, bought a 44,000 ton silo in Drobeta-Turnu Severin (SW of the country) from Westgrain, owned by Micula brothers, who also own European Drinks group.
Cargill is also in advanced talks to buy Provimi livestock feed producer, which has operations in Romania, as well, where its revenue stands at EUR60 million.
9. Alfred Toepfer announces huge investment plan
Alfred Toepfer in turn announced a huge expansion plan for Romania, which entails increasing the silo network to 16 by investment in six silos by the Danube and in one in the western part of the country. The trader has already bought several barge fleets and has plans to build an export terminal in Constanta harbor. It bought a silo in western Romania in the first half of this year for which it paid EUR2.8 million.
10. Ameropa enters fertilizer market
Ameropa Grains has been active in terms of acquisitions this year. The Swiss trader is waiting to get all the necessary approvals from the Romanian authorities to complete the acquisition of Azomures Targu Mures, one of the largest chemical fertilizer producers in the country. The deal is put at over EUR100 million.
(English version by Loredana Fratila-Cristescu)