Bulgaria - Agricultural Sector Bulgaria-Agricultural-Sector
Overview
Bulgarian agricultural and food imports from the U.S. continue to increasingly resemble the profile of U.S. exports to other EU countries heavily weighted toward intermediate and consumer-oriented products. Both categories of products, in 2018, accounted for 16 percent and 44 percent of the market, respectively.
Policy and promotion of U.S. agricultural exports is the goal of the Sofia office of the Foreign Agricultural Service (FAS)/U.S. Dept. of Agricultural (USDA). Despite unfavorable exchange rate (U.S. dollar to euro), U.S. agricultural exports to Bulgaria grew by 4.2 percent in 2018. FAS Sofia found that U.S. agricultural exports to Bulgaria in 2018 were substantially higher when transshipments through other EU countries were counted. Bulgarian customs data reports that U.S. agricultural exports to Bulgaria in 2018 were USD 69 million compared to 2017 when this trade was at USD 65 million, or an annual growth of 6 percent. The EU transshipments were 55 percent of total U.S. agricultural exports to Bulgaria, at USD 38 million.
The business environment for U.S. exports to Bulgaria is characterized by the following:
- more efficiencies as Bulgaria adopts more EU norms
- a shift from direct to indirect imports through EU-based wholesalers/importers with longstanding links with U.S. suppliers enabling Bulgarian importers to source smaller quantities at affordable prices
- growing investment and rising demand for animal feed and feed additives, bovine and other animal genome material, live animals, planting seeds, planting materials, and raw materials such as cotton, wool, powdered milk, and egg powder
- increased output of local products resulting from rising foreign direct investment (FDI) in the agricultural sector
USDA/FAS Sofia assembles reports about local market prospects and developments in the agricultural and food sectors.
See: http://gain.fas.usda.gov/Lists/Advanced%20Search/AllItems.aspx
Sub-Sector Best Prospects:
Distilled spirits
Total imports of distilled spirits (whiskey HS#220830) in 2018 were USD 70.0 million for 4,600 MT, a 10 percent increase compared to 2017 in value terms and 17 percent growth in volume terms. The market showed an increased preference towards higher value products. In the first five months of 2019, whiskey imports were stable at one percent growth in value although it showed a marginal decline of 3 percent in volume due to about 5 percent increase in the average import price.
Imports of U.S. distilled spirits in 2018 were at USD 7.1 million, 8 percent higher than in the previous year. However, data for 2019 (January-May) shows a drop of 41 percent and 23 percent in value and in volume, respectively, due to higher import duties on U.S. spirits which began to impact the market. (Source: World Trade Atlas/WTA report).
The market is stable, likes an assortment of brands, and prospects for increased imports are strong, especially if there are no trade barriers to the U.S. products.
Since June 20, 2017, the EU imposed a 25 percent import tariff on U.S. whiskey (HS#22083011, 22083019, 22083082). Competition is strong as EU producers are likely to benefit in the short term from lower (zero) duties than those for the U.S. exporters.
Nuts/Tree Nuts
U.S. exports are stable at around USD 8.0 million in the last four years. In 2018, U.S. exports decreased temporarily to USD 7.8 million from USD8.5 million in 2017. High demand for U.S. almonds and U.S. pistachios exists. In the first five months of 2019, U.S. almond exports had 5 percent growth. (Source: USDA GATS report) Pistachio exports had a breakthrough year in 2017 to meet the growing domestic demand. In 2018 and the first five months of 2019, U.S. exports of pistachio have marginally declined. U.S. peanuts exports had a substantial growth in 2018 from 2017 by 80 percent to USD 1.2 million. In the first five months of 2019, the trend has continued, and the U.S. peanut exports grew by an impressive 101 percent. (Source: USDA GATS report) Growth is expected due to increased food service outlets, rising tourism, a growing middle-class, favorable tariffs and regulatory regime, as well as a lack of local competition
Plant Genetics/Planting Seeds
U.S. plant genetics is a thriving agricultural sector, but U.S. products are limited due to EU regulatory barriers. In 2018, Bulgaria imported USD 57.6 million of planting seeds (excluding sunflower planting seeds) which represented 5 percent annual growth over 2017 (Source: GTA/WTA, PG Planting Seeds). In the first five months of 2019, imports skyrocketed by 19 percent.
Demand for U.S. planting confectionary and oil-bearing sunflower planting seeds is increasing. In 2018, Bulgaria imported USD 63 million of sunflower planting seeds of which most is from the U.S., mainly via transshipments via Romania, Italy and France. The demand was driven by expanding production as well as by the search for better genetics.
Wine
Bulgaria’s wine market (2015-2018) was characterized by steady growth, increased diversity and an increase in high-end imports. Wine imports (HS#2204) increased in 2018 to a record of USD 23.3 million (8.6 million liters) registering a growth of 10 percent in value and a slight decline in volume terms. In the first five months of 2019, wine imports were flat (in volume terms).
Imported wines have a stable presence in the Bulgarian market due to a robust and mature distribution system, improving consumer income, active promotions, and increased tourism. Imported wines compete well against local wine products. In the retail sector, U.S. wines have a limited presence. While not large, the wine market is highly competitive with wines originating from Italy, Chile, Spain, France, and South Africa.
Pulses
Bulgaria’s pulse market is well developed with both good demand and a high per capita consumption. Dry beans and lentils, both traditional Bulgarian foods, have receded in the wake of less expensive and higher quality imports. Total pulses imports in 2017 peaked to USD 21.2 million and 26,000 MT while in 2018 imports were stable in volume and slightly lower in value (USD 19.3 million) (source: World Trade Atlas, PG Pulses).
U.S. exports of pulses to Bulgaria are around USD 0.5 million annually although there was a temporary decline in 2018 due to higher import duties on the U.S. products. Beginning on June 20, 2018, the EU imposed a new import tariff on U.S. kidney beans (HS#17133390) of 25 percent. Prospects remain very good due to interest in product diversification, the development of consumer tastes, an increase in higher-value pulses, and new products.
Seafood
A net importer of fish and seafood, the Bulgarian import market reached a new record of USD 120 million in 2018; registering a 5 percent growth over 2017. (Source: WTA/PG Fish and Seafood Products Group, WTA). Imports in volume reached 42,200 MT, slightly lower than in 2017. More than 80 percent of total imports are frozen fish. In the first five months of 2019 imports continued to grow by 2 percent in value and by 11 percent in volume.
U.S. seafood exports, from 2012-2018, experienced an increase and consisted of frozen fish: pink and chum salmon, loligo squid, hake, mackerel, as well as lobster and other higher-end seafood products. In 2018, U.S. exports reached a new record of USD 0.7 million or 16 percent growth compared to 2017. Imports from the U.S. are higher that reported by U.S. Customs due to transshipments through other EU countries, mainly via Greek and Romanian ports.
Prospects for seafood imports remain very good due to a steady development of the market and expansion of retail and food service outlets which sell consumer-ready, and ready-to-eat products. On the other hand, the EU trade regime provides a preferential tariff treatment to exporters from South America, Canada and some other countries which creates challenges for U.S. exporters.
Prepared food
U.S. prepared food exports experienced good, stable growth in 2015-2018. In 2018, these exports to Bulgaria increased to USD 1.2 million. In the first five months of 2019, U.S. exports to Bulgaria have an impressive growth of 89 percent. This category includes products such as processed peanuts, soups, mixes for dough, pastry, gelatin and others. Growth is related to the development of the local food industry and especially the convenient food segment. Prospects are good and a moderate growth is expected soon.
Bovine genetics
The Bulgarian dairy farm industry significantly increased its demand for high quality genetic materials, both for live animals, imported mainly from the EU, and for semen and embryos (HS#051110), imported from the U.S.
The market for bovine dairy genetics is dominated by imported semen, which account of more than 90 percent of sales. Leading suppliers include the United States, Germany, the Netherlands and Canada. Total 2018 Bulgarian animal genetics (HS#051110) imports were flat at USD 600,000 compared to 2017 in value terms. However, during the first five months of 2019, imports had a growth of 10 percent in value and 25 percent in volume over 2018.
In 2018, U.S. bovine-genetic exports to Bulgaria stagnated, however, during the first five months of 2019, U.S. exports continued to expand with 46 percent growth in value terms and 60 percent in imported doses over 2018. Germany and Canada remain as the main U.S. competitors. Reportedly, some, or most, of the Canadian and German product is of U.S. origin.
Currently the size of the market is not large but the potential for growth is substantial. High-tech dairy and beef cattle genetics from gnomically tested bulls are showing increased demand. This sub-sector is characterized by: a trade regime with no import duties; favorable veterinary requirements; and an increase in local demand.
Snacks/Cereals
U.S. companies face stiff competition from EU producers in the snack food sector. Snack foods generally are sourced from other EU member states or are produced locally as the result of foreign direct investment (FDI). Bulgaria does not have a tradition of producing or consuming high-quality and/or price-competitive snack foods. Consumption, however, has been growing, thanks to changing consumer tastes resulting from foreign travel, marketing by snack foods companies, rising incomes, and expanding tourism.
Bulgaria’s imports of snack foods in 2018 reached a new record at USD 91 million or 19 percent more than in 2017. Romania and Poland were the main competitors on this market, followed by Germany, Turkey and Greece (source: WTA, PG Snack Foods NESOI – HS#1704 and HS#1905)). In the first quarter of 2019, these imports had a slight decline of 3 percent.
U.S. snack foods exports in 2018 increased from USD 0.2 million in 2017 to USD 0.3 million. Popcorn comprises the bulk of U.S. snack food imports. Prospects for 2019 remain good. Local production of confectionery products continues to grow as a result of investment by EU-based companies. U.S. products are perceived as being of high quality and competitively priced. U.S. microwave popcorn, breakfast cereals, and some types of confectionery products are the most popular.
Soft drinks/waters/juices
The soft drinks market is one of the country’s most dynamic. In 2018, soft drink imports reached a new record of USD 139.2 million compared to USD 114.2 million in 2017 or a growth of 143 percent. (HS# 2201; 2202; 2009) (Source: WTA). The trend continues in the first five months of 2019 with growth rates between 10 and 55 percent in different categories. Major EU competitors have more than 80 percent of market share. Water, juice and energy drink consumption continues to increase in parallel with the rapid development of the hotel/restaurant sector. The Association of Soft Drinks Producers projects local consumption will continue to increase over the next several years. U.S. producers successfully compete with juice concentrates of which most are imported concentrates. Cranberry juice and other frozen juices would be popular with Bulgarian consumers if they were price competitive.
Web Resources
http://en.bsda-bg.org/ (Beverage & Soft Drink Association of Bulgaria);
Ms. Zhana Velichkova, Executive Director,
bsda@tecno-link.com; tel: 359-2-983-2422
U.S. Foreign Agriculture Service Sofia Contact Information
Mila Boshnakova, Senior Agricultural Specialist, Mila.Boshnakova@fas.usda.gov
Alexander Todorov, Marketing Specialist, Alexander.Todorov@fas.usda.gov
U.S. Department of Agriculture
Phone: +359-2-939-5720
www.fas.usda.gov
http://gain.fas.usda.gov/Pages/Default.aspx (GAIN reports)