Moldova People Profile 2012

Reference Date: 28-May-2011

Crop prospects for 2011 are favourable

Growing conditions for cereal crops are overall satisfactory so far following adequate precipitation since the beginning of the cropping season last autumn. The area planted to winter crops decreased by 6 percent compared with the same season of 2009. However, the bulk of the cereals are sown in the spring. The increases in spring plantings are estimated to have compensated the lower winter area planted. In particular, the area planted to the main maize crop is expected to have increased by 5-7 percent. As a result of good weather conditions and higher total plantings, the aggregate cereal production (winter and spring seasons) is forecast at some 2.5 million tonnes, slightly above last year’s production and 15 percent higher than the five-year average.

Imports of cereals continues to decline in marketing year 2010/11 (July/June)

The country needs to import cereals, mainly wheat due to the poor quality of local production. The share of wheat import has been declining during last three marketing years 2008/09-2010/11(July/June) to about 3 percent of total domestic needs and 11 percent of food needs. In early 2011, the Government had concerns about the acceleration of wheat exports and introduced an export wheat ban to prevent increases in bread prices. This ban was lifted at the beginning of May 2011 on account of the good prospects for this year’s cereal harvest.

Food prices of staple products are increasing

Inflation has accelerated since July 2010, reaching 6.5 percent for the period of April 2010-April 2011 due to increasing food prices, including oil (41.7 percent), dairy (27.9 percent), sugar (10 percent), vegetables (9 percent) and bread (11 percent). The acceleration of the food inflation mainly reflects higher international prices in the agricultural commodity markets as well as higher fuel prices. In January-March 2011 wholesale prices of crop products rose by an average of 31.3 percent compared with the same period last year, including considerable increases in grain prices: wheat price (excluding seed variety) - by almost 68 percent, maize (except seed variety) - by 43 percent. The increased wholesale prices of agricultural commodities in the country put a pressure on retail prices. The government is taking measures to stabilize wheat flour and bread prices by releasing strategic food reserves. It has also made amendments to the regulations of food wheat distribution from state reserves for re-allocation of grain among bread factories.