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Romania’s fruit and vegetables industry, record level in 2020, risk of increasing imports dependence

March 30, 2022

The turnover of the Romanian fruits and vegetables industry increased by 17.4%, reaching an all-time high of 24.4 billion lei in 2020. By sub-segments, trade registered the largest advance, of 19% (with a turnover of 20.8 billion lei), the processing activity increased by 12% (with a turnover of 1.4 billion lei), and the turnover of fruit and vegetable cultivators increased by 5% from 2019, at 2.1 billion lei in 2020, as per the KeysFin analysis launched upon participating in the Modern Buyer RO Fruits & Vegetables Show. “The pandemic has brought an obvious change in consumer behaviour towards basic products, including fruits and vegetables. For 2021, we estimate the continuation of the growth trend that began in 2014 and the record level of 28 billion lei based on the increase of consumption, but also of the related inflationary pressures of approximately 10% last year“, said Diana Florescu, KeysFin economic analyst. The number of employees increased by 1.9% compared to 2019 and was 21% above the 2016 level, at 27.5 thousand employees in 2020. The labour force in trade and processing increased by 7% each, at 15.7 thousand employees and 4.3 thousand employees in 2020, while the cultivators had 10% fewer employees than in 2019, respectively 7.5 thousand in 2020.  The number of companies increased by 3.5% compared to 2019 and was 24.5% above the 2016 level, at 8.6 thousand companies in 2020. The distribution by sub-segments shows a balanced industry: 43% of the companies were active in trade, the same percentage in cultivation, while the rest in the processing of fruits and vegetables in Romania in 2020. The net result of the fruits and vegetables industry exceeded for the first time the level of one billion lei, after an advance of 42% from 2019 and up 332% when compared to 2016, at 1.3 billion lei in 2020. By sub-segments, the net result of fruits and vegetables processors increased by 33%, that of traders by 42% and on the cultivation side by 50% in 2020 when compared to the year before the pandemic. According to data provided by the Trade Register in the Insolvency Proceedings Bulletin, in 2021 there were 110 insolvencies in the fruits and vegetables industry, 20% more than the minimum of the last 15 years of 92 insolvencies registered in 2020, and at the same time 67% less than the peak of the indicator reached in 2013, of 337 insolvencies. In the context of the overall uncertainty arising from the pandemic, it is appropriate for managers to verify the companies they intend to do business with, to prevent commercial risks such as the risk of default of payments, insolvency, bankruptcy, etc. Business information solutions are increasingly being used by the big players in the market, whether they are entrepreneurs, investors, managers, or creditors, they are changing their perception and practice in mitigating risks, precisely because sudden changes in the market can destabilize a company, especially if the information in making a decision with a major business impact is incomplete. According to data from the National Institute of Statistics, in 2020, the imports of fruits and vegetables reached an all-time high of 1.2 billion euro, after an annual advance of 1.6% and an increase of 252% from 2011. Exports of fruits and vegetables increased by 9.3% compared to 2019, but were up only 40% compared to 2011, at 173 million euro in 2020. The trade deficit of fruits and vegetables (Exports minus Imports) increased by 0.3% compared to 2019 and was 374% above the 2011 level, at the highest level in history, of over one billion euro in 2020. In the medium term, KeysFin analysts expect an increased dependence on food imports in general, and implicitly on fruits and vegetables in the context of rising commodity and utilities prices, but especially in the absence of a well-targeted national support program (agricultural infrastructure, access to financing for the development and automation of production capacities – Agriculture not benefiting from a direct allocation in the National Recovery and Resilience Plan), through which the authorities may help the managers of the local fruits and vegetables industry to face the external competition, to reduce the dependence of the local economy on imported products and to ensure healthy and quality products to the Romanian consumer.

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