Consolidation of the Agricultural Sector in 2022 Following the Best Year in History

The turnover of Romanian agricultural companies registered the highest growth rate in the last 10 years of over 30%, reaching the historical maximum of lei 58.1 billion in 2021, being 35% higher than in 2017, according to the annual KeysFin study “Romanian Agricultural Sector”.

For 2022, KeysFin analysts estimate the consolidation of the sector by approaching or even surpassing the 2021 record level, of lei 58 billion, based on inflationary pressures and subsidies granted by the authorities, factors that will counterbalance the decrease in crop production of 12%, forecasted by the European Commission in July 2022, the second largest annual decline among member states, to 26 million tons.

“The turnover of agricultural companies in Romania rose by a third in the post-pandemic year, above the initial estimates, based on the increase in the prices of grains and raw materials internationally and the subsidies allotted to farmers. Although for 2022 we estimate the consolidation of the sector, we point to the need to prioritize investments in infrastructure and modernization of this sector, so that Romania remains a net exporter of agricultural products*, after in the year of the pandemic it was a net importer for the first time in the last 10 years. As a strategic direction, we should follow the example of Poland, namely, to invest in processing, so that in the long term we have a positive balance of international trade with agri-food products, which has a higher added value“, said Diana Florescu, economic analyst KeysFin, one of the most important providers of business information solutions in Romania.

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Regarding the top of the largest agricultural companies, REGIA NAȚIONALA A PADURILOR ROMSILVA occupied the leading position in 2021, after an annual turnover increase of 25%. On the 2nd and 3rd places, by turnover, were PROMAT COMIMPEX SRL with lei 1.2 billion and PLANTAGRO-COM SRL with lei 672 million in 2021.

The biggest increase in the top 20 was recorded by COMCEREAL SA, which after an annual advance of 182% in turnover entered in the last top 20 position in 2021.

AN ALMOST 4-FOLD INCREASE OF THE NET RESULT IN 2021

According to Keysfin specialists, the number of companies that reported their financial results in 2021 remained very close to that of the previous year, namely close to 26.5 thousand companies (based on data extracted in September 2022).

As a direct effect of the post-pandemic recovery, the net result increased by 267% compared to 2020 and was 81% above that of 2017, to the record level of over lei 8 billion in 2021.

Of the 26.5 thousand companies that reported their financial results, about 17 thousand made a profit (64%), 6.5 thousand were at a loss (24.7%) and the rest recorded a zero result in 2021.

LOCAL CROP PRODUCTION FROM AN EUROPEAN PERSPECTIVE

Crop production in the European Union increased by 11% in 2021 compared to the previous year, according to data from the National Institute of Statistics: sunflower (+13.8%), wheat (+9.2%), grain maize (+5%), rape (+1.8%) and soya beans (+0.9%).

Romania had the second highest increase in the value of crop production in the European Union, of 40.2% and rose to 6th place in the EU, with 6.3% of the total, surpassing Poland which recorded 5.6% of total in 2021.

Regarding wheat production at the EU level, Romania climbed 2 positions in the ranking, reaching 4th place, with 7.5% of the total and a harvest of 10.4 million tons in 2021.

Romania continued to be the leader in terms of the cultivated area of corn among the member states of the European Union, and in the post-pandemic year the production recorded was of 14.8 million tons, becoming a leader in the European hierarchy.

In addition, Romania managed to remain the largest sunflower producer in the EU, with a harvest of 2.8 million tons in 2021.

VALUE OF AGRICULTURAL PRODUCTION IN ROMANIA IN 2021, UP 14%

The Romanian agricultural production value increased by 14% in 2021 compared to the previous year, according to data from the National Institute of Statistics.

Also, crop production increased by 22%, whereas animal production and agricultural services decreased by 0.2% and 0.7%, respectively, in 2021 compared to the previous year.

The Romanian Agricultural Sector study covers all companies that reported their annual results to the Ministry of Finance and had as their main area of activity one of the following NACE groups: Plant and animal husbandry – 011, 012, 013, 014, 015, 016, 017; Fisheries – 031, 032 and Forestry – 021, 022, 023, 024.

2021p – the data was extracted in September 2022 and may be subject to change by the end of the year.