This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 8/17/2017

Overview

Agribusiness is one of Macedonia's most promising sectors.  In 2016, agribusiness (including agriculture, forestry, and fisheries) accounted for 7.7 percent of GDP and 16.6 percent of the total number of persons employed in Macedonia.

Exports of agriculture and food products in 2016 constituted 12.25 percent of Macedonia’s total exports.  The top markets for agriculture and food products are the EU and Western Balkan Countries (Serbia, Kosovo, Albania, and Bosnia and Herzegovina), accounting for (approximately 82.3 percent of the total exports).  The main export products from Macedonia are fresh and processed vegetables and fruits (34.8 percent of total agricultural exports), tobacco (24 percent), grains (13.5 percent), and beverages (12 percent).  The main import products are meat (beef, poultry, and pork accounted for 20 percent of total agriculture imports), fruits and vegetables, grains, coffee, tea, and spices.

Macedonia-U.S. trade in agricultural products dropped from USD 25 million in 2014 to USD 22 million in 2015.  The U.S. share of Macedonia’s agricultural imports increased from 0.7 percent in 2013 to 0.9 percent in 2014.  The share of Macedonia’s agricultural exports going to the United States increased to 6.2 percent in 2016, primarily due to the increased exports of tobacco.
 
Food and beverage processing are significant industries in Macedonia, as well as fresh fruits and vegetables.  Processed foods include both semi-finished products (including frozen, dried, and concentrate) and finished products (canned and preserved).  Over 75 percent of the processed foods are exported, mostly to the EU and to neighboring countries. Most of the food-processing facilities are in private hands.

In 2014 the Government of Macedonia adopted a six-year National Strategy for Agriculture and Rural Development 2014 - 2020 to strengthen the ability of Macedonia’s agricultural sector to compete in the EU and other regional markets and to promote sustainable development of rural areas.  The strategy, which is a pre-requisite for receiving EU Instrument for Pre–accession Assistance (IPA) II assistance in agriculture, also aims at improving the marketing of agricultural products and implementation of minimum quality standards according to the EU approximated Law on quality of agricultural products and respective by-laws.  Consequently, the total agriculture budget (including financial support to agriculture development and subsidies to farmers) has increased from USD 49.3 million in 2007 to USD 176 million in 2017 (exchange rate USD 1 = 55 MKD), and accounted for around 4.58 percent of the national budget in 2017.  The government has promoted agriculture as one of the most important sectors for the development of the economy in Macedonia and adopted and amended several agriculture related laws to comply with EU requirements.
 
As of January 1, 2009, in accordance with the Law on Veterinary Public Health and the Rule Book on sanitary and hygiene conditions for food production, every establishment that is involved in production and/or trade of food products has to implement HACCP standards in order to be able to operate.
 

 

2014

2015

2016

2017 (Estimated)

Total Local Production

1.858 bl$

1.581 bl$

n/a

n/a

Total Exports

642.33 ml$

537.56 ml$

583.86 ml$

n/a

Total Imports

857.42 ml$

773.82 ml$

790 ml$

n/a

Imports from the US
 

 

 

 

 

Total Market Size

2.073 bl$

1.817 bl$

n/a

n/a

Exchange Rates

46.4

55.5

55.7

n/a

(total market size = (total local production + imports) - exports)

Leading Sub-Sectors

Wine production:  Macedonia produces approximately 1 million hectoliters of beer, mostly for domestic consumption, and approximately 1 million hectoliters of wine annually in 75 wineries.  Though Macedonia exports much of its wine in bulk, an emerging number of smaller private wineries are starting to export quality bottled wine.  In 2016, export of bulk wine further dropped from 66 to 64 percent in favor of bottled.  Over 80 percent of domestic wine production is exported, mainly to the EU, former Yugoslav countries, China, Canada, Japan, and the United States.  Export opportunities exist for U.S. companies for equipment that will increase the volume of wine bottled in Macedonia and technology and supplies that will stimulate grape production.

Organic production:  In 2009, Macedonia adopted a new Law on Organic Agricultural Production, which is harmonized with EU regulations.  Organic farming is an area of expected development and interest both by domestic and foreign markets.  In the past three years, there was a noticeable trend of growth, both in terms of surface of the arable land certified for organic production, and the number of entities.  In 2016, there were 529 registered entities in the system of organic agricultural production in the country, and they produce meat, dairy, honey, cereals, industrial oil crops, wine, fruits, and vegetables.

Fresh vegetables production:  Vegetable production is export oriented.  Almost 80 percent of the vegetable production is exported either as fresh, preserved, or processed vegetables.  The production of vegetable crops is concentrated in the southern and eastern parts of the country, due to the favorable climate.  Over 75 percent of the production is in open fields, 20 percent in plastic tunnels, and the rest in glass greenhouses.  The top five vegetable crops are potatoes, peppers, tomatoes, cabbage and melons.

Preserved fruits and vegetables:  The food processing industry in Macedonia consists of 50 companies with a processing capacity of approximately 120,000 tons of vegetables and fruits per year.  Ninety-one percent of them process vegetables and 9 percent process fruits.  The most significant raw materials are red peppers, industrial tomatoes, sour cherries, apples, and plums.  Although the industry is export oriented, with over 80 percent of the production going to EU and neighboring markets, there is a traditionally low level of utilization of the production capacity.  This mainly reflects the discontinuity in the supply of quality raw materials and steady contracts with suppliers, lack of skilled workers, and difficult access to financing.

 

Opportunities

U.S. food exporters should focus on establishing their business relationship with a reliable and efficient importer and distributor. It is also important to identify the appropriate distribution and sales channels.

The Government of Macedonia considers agriculture a target area for future investments, growth and development, including increased foreign direct investment. The key weaknesses of the agriculture sector are the lack of modern equipment and lack of investment into processing facilities.

Domestic production of agricultural machinery is minimal, and the market relies on imports.  There are substantial opportunities for U.S. companies in the agribusiness area for equipment that will add value to the food processing sector, such as bottling, packaging, and refining equipment.  Experts have also identified problems in waste treatment and waste disposal, hygiene, and in meeting environmental standards.

Macedonia is net importer of meat and grains.

Meat:  Macedonia has insufficient meat production, and the number of farm animals is dropping yearly.  Macedonia satisfies over 50 percent of its meat consumption through imports.  The poultry industry is focused on egg production.  There is a surplus of eggs, but poultry meat production is insufficient to satisfy the local fresh meat market.  The domestic pork industry satisfies 90 percent of the market for fresh meat, but the processing industry imports almost 100 percent of its needed quantities.  There is a significant lack of beef, as most of the cattle are dairy cows.

Grain market:  Macedonia imports most of its grains.  There is insufficient domestic production of corn.  The country imports one-third of its wheat needs annually.  There is no production of soya beans; most U.S.-origin soybean meal is purchased from Greece, Serbia, and Hungary by large farms and concentrate producers.  Higher protein meal is in demand, but the market is price sensitive.  In 2013 Macedonia changed its legislation to prevent use of genetically engineered commodities in animal feed.

Web Resources

Ministry of Agriculture, Forestry and Water Economy
 
Food and Veterinary Agency of Republic of Macedonia
 
Food and Agriculture Organization of the United Nations Macedonia country profile

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Macedonia Agribusiness Trade Development and Promotion