Банкеръ Weekly



By mid-February 2004 import of flour to Bulgaria will reach 10,000 tons, a representative of JBL - one of the big importers of the commodity from neighbouring Turkey, announced. It has been negotiated that the quantity should be discovered within 30 days. According to data of the customs, a little over 2,000 tons were delivered during the first two weeks of the year at prices of BGN390-410/ton. Wholesale offers have already been registered on the commodity exchanges in Plovdiv and Sofia at BGN600-620/ton after VAT. For comparison, Bulgarian flour could be had on the domestic commodity exchanges as of the beginning of 2004 at BGN650-700/ton after VAT. Flour prices will continue to go down, bakers claim. As of January 15 Bulgarian mills reduced their wholesale prices by BGN20-30/ton. However, this is not sufficient for competing efficiently with importers, according to traders. Most mills operate at a minimum trade surplus and are not able to decrease the prices below BGN640/ton, considering that they buy the wheat at BGN340/ton before VAT. According to Peter Hristov from the Union of Millers in Bulgaria, if the import of flour continues after February as well, about 30% of the mills should be closed down. At present they manage to load their production capacities which exceed three times the country's needs. Meanwhile, the State is artificially creating unfair competition of Bulgarian producers, which will result in the bankruptcy of smaller firms. Moreover, the imported flour could be dangerous to consumers, representatievs of the Union of Millers believe. Mostly low-quality flour (Type 650) comes into the country at low prices, without inscriptions in Bulgarian on the sacks, and with whitening substances in order to look better. The retail flour market is relatively calm, data of the System for Agricultural Market Information (SAMI EOOD) show. Flour in 1-kg packs is sold at BGN0.87, and in some regions it could be even bought at BGN0.80. The population does not buy excessively to hoard the commodity, dealers from Sofia and Plovdiv claim. Consumption in the first two weeks of January was within last year's volume.Flour Retail Prices in BGN/kg as of January 20, 2004Blagoevgrad 0.83Varna 0.87Veliko Tirnovo 0.88Gabrovo 0.88Lovech 0.88Pleven 0.89Pernik 0.90Haskovo 0.90Sofia 0.85Shoumen 0.91Note: Data by SAMI OOD

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