This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 2/18/2019

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 2017 constituted 10.71 percent of Macedonia’s total exports.  The top markets for agriculture and food products are the EU (50.5 percent of total exports, including Greece 16.6, Germany 13.7, and Croatia 13 percent), and CEFTA countries (31.31 percent).  The main export products from Macedonia are tobacco, confectionary products, fresh and processed vegetables and fruits, and wine.  The main import products are meat (poultry, beef and pork accounted for 20 percent of total agriculture imports), chocolates and confectionary, processed foods, and grains.

Macedonia-U.S. trade in agricultural products dropped from USD 44.5 million in 2016 to USD 40.5 million in 2017.  The U.S. share of Macedonia’s agricultural imports increased from 0.7 percent in 2016 to 1.0 percent in 2017.  The share of Macedonia’s agricultural exports going to the United States were 6.2 percent in 2016, but dropped to 5 percent in 2017, primarily due to the decreased 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 (frozen, dried, and concentrates) and finished products (canned and preserved).  Over 75 percent of processed foods are exported, mostly to the EU and to neighboring countries. Most food-processing facilities are private companies.

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 was a pre-requisite for receiving the EU Instrument for Pre–accession Assistance (IPA) II in agriculture, also aims to improve the marketing of agricultural products and implementation of minimum quality standards so they are aligned with EU laws on the quality of agricultural products.  Consequently, the total agriculture budget (including financial support to agricultural 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 a result of financial support to the agriculture sector, the number of family farms in 2017 increased by 10,000 compared to 2016, bringing the total number of registered farm holdings in the State Farm Register to 160,000.

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.

 2014201520162017 (Estimated)
Total Local Production1.858 bl$1.581 bl$1.532 bl$n/a
Total Exports642.33 ml$537.56 ml$583.86 ml$630.56 ml$
Total Imports857.42 ml$773.82 ml$790 ml$905.26 ml$
Imports from the US
 
  507 ml$9.05 ml$
Total Market Size2.073 bl$1.817 bl$n/an/a
Exchange Rates46.455.555.750

(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 76 wineries. It is a net exporter of wine, a strategic export product for the country.  Approximately 65 percent of wine exports are in bulk and 35 percent are 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.

Tobacco production:  Tobacco was the top industrial crop in 2016, planted on 16.379 hectares or 80 percent of the total area for industrial crops.  Although the area dedicated to tobacco decreased by about 10 percent in comparison with 2015, the production of tobacco (25.443 tons) increased by 5 percent.  Almost the whole quantity of raw tobacco production is contracted by multinational companies through registered branches in the country and exported as fermented tobacco.  The largest export market is the EU, followed by the United States and neighboring countries.

Organic production:  Organic farming is an area for development.  Over the past three years the amount of arable land certified for organic production and the number of companies involved grew.  In 2017, there were 654 registered entities in the system of organic agricultural production in the country.  They produce meat, dairy, honey, cereals, industrial oil crops, wine, fruits, and vegetables.
 
Fresh fruit and vegetable production:  Fresh fruit and vegetable production contributes 45.8 percent of the agriculture output in the country and is export oriented.  Almost 80 percent of the production is exported either as fresh, preserved, or processed.  The production of crops is concentrated in the southern and eastern parts of the country, due to the favorable climate.  Over 75 percent of vegetable production is in open fields, 20 percent in plastic tunnels, and the rest in glass greenhouses.  The top three vegetable crops are potatoes, peppers, and tomatoes, while top fruit crops are apples, plums, sour cherries, and peaches.

Preserved fruits and vegetables:  The food processing industry in Macedonia consists of 50 companies with a processing capacity of approximately 180,000 tons of fruits and vegetables per year.  The most significant raw materials are red peppers, industrial tomatoes, sour cherries, apples, and plums.  The industry is export oriented, with over 80 percent of the production going to the EU and neighboring markets as fresh for further processing.  The low amount of food processing in Macedonia due to problems with the supply of quality raw materials and unsophisticated suppliers, lack of skilled workers, and difficulty accessing financing.

Opportunities

U.S. food exporters should focus on establishing their business relationship with a reliable and efficient importer and distributor, with access to 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 government provided significant financial support to farmers over the past 5 years.  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.

Meat:  Macedonia is net importer of meat and grains.  Macedonia has insufficient meat production, and the number of farm animals continues to decrease.  Macedonia meets 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 almost 90 percent of the market for fresh meat; all of the needs for the meat processing industry comes from imports. There is a significant lack of beef, as most of the cattle are dairy cows.  Lamb meat is the only net exported livestock product from the country.  Around 85 percent of Macedonian lamb is exported to EU countries, mainly Greece and Italy, mostly around Christmas and Easter.

Grain market:  Macedonia imports most of its grains.  There is insufficient domestic production of corn.  The country imports one-third of its wheat 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

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Macedonia Agribusiness Trade Development and Promotion