Latvia's exports have grown due to good harvest, say experts

Latvia's exports have grown during the third quarter. However, the future does not  look as optimistic, Latvian Radio reported November 22.

More than half of the total export of goods is provided by agricultural products this autumn: wheat and rapeseed. In the near future, farmers will have sold their harvests, and the export forecasts are being made worse by the fact that, due to the pandemic, there is no success in selling services outside.

For the second year in a row, weather conditions have been favorable so that farmers can talk about record high harvests of grain. Moreover, the level of knowledge and technological provision for farmers has increased significantly, says Edgars Ruža, Chairman of the co-op Latraps Board.

Local consumption is constant every year and around 80% of the harvest is exported this year. The chief executive of Latraps estimates that export figures on wheat and rapeseed will show growing trends later this month, but these indicators will slow down.

The reason for this is that harvest records are reached faster than farmers' capacity to build storage facilities, so the majority should be realized immediately after harvest.

But prices also bring joy this year. For example, at the beginning of the season, wheat could be traded at EUR 170 per ton on the stock exchange.

“At one point, the numbers climbed well above two hundred – 210 and even 215. But these are stock prices. Transport needs to be calculated, and the quality of grain, which is better this year than last year, has grown in average bread quality, with the largest demand in the Middle East, Arabia, Africa, where bread grain itself cannot be grown," Ruža said, adding that most of the harvest has already been sold.

The head of the Ministry of Economics Analytics service Janis Salmanis said:

“As far as the future is concerned, there is a great deal of uncertainty with the spread of the virus, as it is clear that the second wave has come to Europe. Our export capacity will therefore be dependent on what happens in our partner countries with the epidemiological situation. Returning to the strict limits that were in the spring, demand in our export markets falls. Consequently, it will be more difficult to sell Latvia's product,” said analyst Salmanis.

Riga Technical University's Institute of Business Engineering and Management said Talis Laizāns believes that Latvia's exports show a continuing and slightly growing trend in the longer term.

However, at least in the coming year exports are not ready to grow, said Laizans: “Because we don't have such programmes, we haven't planned anything seriously and done anything for industries to suddenly become export masters.” Therefore, in the expert's view, our most serious export partners could prove very unserious in crisis situations.

 

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