Voluntary Report - public distribution

**Date:** 11/18/2004

**GAIN Report Number:** BK4025

BK4025

**Bosnia-Hercegovina**

**Exporter Guide**

**Annual Report**

**2004**

**Approved by:**

![](media/image1.wmf)Sarah Hanson

U.S. Embassy

**Prepared by:**

Sanela Stanojcic

**Report Highlights:**

Bosnia and Herzegovina (BiH) imports around two thirds of its overall
food needs. The market for processed foods focuses on value rather than
quality as consumers seek to obtain the most for their money. Food
import tariffs are low compared to other countries in the region.
Challenges to exporters include a complicated dual system of government,
low incomes, and poor infrastructure. This report contains marketing
tips, information on importing foods, and important points of contact.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Vienna \[AU1\]

\[BK\]

##### I. Market Overview 

***Economic situation***

The economy in Bosnia and Herzegovina (BiH)[^1] is still recovering from
the 1992-1995 war and from the transition from a socially planed to a
market economy. In recent years the economy has been driven by donations
from the international community and Gross Domestic Production (GDP)
growth reflected more the inflow of external assistance than an increase
of domestic production. Per capita GDP in 2003 has been estimated at
approximately US\$ 1,822, with a total estimated nominal GDP of
approximately US\$ 7 billion. The real GDP growth rate in 2003 was
estimated at 3.5%, according to official figures. The IMF projection for
2004 real GDP growth is approximately 5%. According to official figures,
BiH ran a current account deficit of approximately \$US 2 billion in
2003, or roughly 30 percent of the country's GDP. The average net
monthly wage in the first part of 2004 was \$308 (this figure is higher
in the Federation than in the Republika Srpska).

A degree of macro-economic stability has been achieved with the
introduction of a Central Bank, adoption of the currency board and
creation of a single currency, the Konvertabilna Marka (Convertible
Mark, KM). The currency board ensures that KM is fully backed by hard
currency or gold, and the exchange rate is fixed at approximately 2 KM
to the Euro. Therefore, prices in BiH have remained stable since the
introduction of the KM. Inflation in 2003 was only 0.6%, a rate that has
remained steady in 2004.[^2]. At the end of 2003 the entities ceded
authority over all indirect taxes to the State-level government, which
will ultimately result in a single Value-Added Tax (VAT) for the whole
country.

***Structure of the economy***

The structure of the BiH economy is changing quite slowly. GDP
composition by sector in 2001 was: agriculture 13%, industry: 40.9%,
services: 46.1%. Industrial production growth rate in 2003 was around
5%.

Although there has been a significant growth in the number of registered
micro, small and medium enterprises, economic activity is still
characterized by the existence of large state owned enterprises. These
large enterprises operate with significant losses, at less than full
capacity, and with out-dated technology and management techniques.

The official unemployment rate remains high, above 40%. It is estimated
that an actual unemployment is around half of it, because of the black
economy existence.

***Business environment***

BiH is composed of two entities with significant differences with regard
to the business environment. Although there has been an effort to create
a single market in BiH, significant legislative, regulatory and
institutional differences between the Entities persist. Between the two
entities, factors such as business registration requirements and most
taxation are separate and different. The creation of a single economic
space is a precondition for the regeneration of the post-war Bosnian
economy, the transformation from a planned to a market economy, and
greater integration into European and world trade structures.
Significant barriers to internal and external trade and foreign direct
investment remain, and there are weaknesses in the legal base related to
competition, public procurement, financial services, standards and
regulations, and the regulation of essential services.

***Foreign Trade***

In 2003, for every dollar of exports, BiH took in more than three
dollars in imports. Total exports grew from \$758 million to **\$**1.678
mil. from 1998 to 2003, while imports rose from **\$**4.319 million to
**\$**6.078 million in the same period. Agricultural imports represent
about 30% of total imports, and about 10% of total exports. Efforts have
been made recently to liberalize trade, especially within the Southeast
European region. Free trade agreements have been signed with many
countries in the region (Croatia, Serbia and Montenegro, FYR Macedonia,
Slovenia, Albania, Romania, Bulgaria, Moldova and Turkey) in the
framework of an intra-regional trade co-operation. The principal trading
partners are the European Union (EU) and the countries of ex-Yugoslavia.

  --------- -- ----------------- ---------- ---------- ---------- ---------- ---------- ----------
               **Macroeconomic                                                          
               data**                                                                   

  **Trade                        **1998**   **1999**   **2000**   **2001**   **2002**   **2003**
  volume,                                                                               
  million                                                                               
  \$**                                                                                  

  Exports                        758        991        1.557      1.610      1.484      1,678

  Imports                        4.319      4.921      5.368      5.850      5.959      6.078
  --------- -- ----------------- ---------- ---------- ---------- ---------- ---------- ----------

Source: FIPA and Central Bank of BIH

Major BiH trade partners (year 2003):

**EXPORT\
**![](media/image2.wmf){width="3.602777777777778in"
height="2.09375in"}*Source:* Central Bank of BiH

**IMPORT\
**![](media/image3.wmf)*Source:* Central Bank of BiH

Croatian, Slovenian, German, Serbian, Hungarian and Italian, and
processed food products dominate the market. The most imported food
products in 2003 were beverages (alcoholic and non-alcoholic) and
mineral water, grains, tobacco products, sugar and dairy products.

Imports of U.S. consumer oriented products and seafood products to BiH
from 1997- 2003 were minor. Imports of U.S. origin bulk commodities
(mostly wheat and sunflower seed oil) are part of a U.S. food donation
program to BiH.

BiH is not a member of the World Trade Organization (WTO) but has
started accession negotiations. BiH's Working Party was established in
July 1999 and a draft Memorandum on Foreign Trade Regime was submitted
to the WTO in August 2002. The first working party session was held in
November 2003 and the second one is scheduled for December 2004.

***Size and Growth of Consumer Foods Market***

Unfortunately, there has been no information on size and growth of the
market.

***Market Opportunities for High-Value Consumer Foods/Beverages and
Edible Fishery Products***

*Challenges to Marketing High Value U.S. Foods in BiH:*

· The weak economy affects consumer-purchasing power. An average net
wage is lower than in any country in the region and the unemployment
rate is high. Therefore, people are more interested in price than in
quality.

· Quality control among locally produced and imported products if often
poor in part because BiH government laboratories work with out-dated
technology and are ill-equipped. Therefore, labeling requirements are
often not met and low-quality products may be found on market at that
undercut other products.

· There is still a lot of smuggling.

· Fraud and corruption are still a problem, especially in relation to
taxation and import duties.

However, high quality U.S. products could find small, but growing market
due to the fact that consumers awareness is improving and eventually
will result in spending more money on high quality food products.
Californian wines (lower quality) and almonds are already present on the
market

######## **Food Expenditures and Consumption**

It is estimated that a four-person family spends around \$3,500 annually
(2003 est.) on a 'basket' of basic food products. However, the general
opinion is that the actual figure is being much higher and there are no
reliable official statistics on food consumption. Officially, changes in
food expenditures are not significant because the 'basket' of basic food
products is always the same and the retail prices are quite stabile.

Since an average monthly income is around \$300, an average pension
around \$100 (2003), with the official unemployment rate around 40%,
many do not have enough money to buy food. According to World Bank's
poverty reduction strategy paper, one fifth of total BiH population is
on the edge of poverty.

***Demographic Developments and Impact on Consumer Buying Habits***

BiH has a population of around 4 million and an average BiH household is
composed of 3.6 members. A single parent heads slightly over one in ten
households. The population growth rate is about 1.38% (2001 est.).

The rural population decreased significantly as the result of the war.
Most of the rural population moved to urban areas or went to other
countries as refugees and have been slow to return. In some areas,
landmines remain a barrier to agricultural production although there is
a significant international demining effort.

The number of single households has not increased significantly because
many of young people live with their parents. People are also waiting
longer before they have children because of difficult economic situation
and housing problems.

***Advantages and Challenges for the U.S. Exporters***

  ---------------------------------- ------------------------------------
  Advantages                         Challenges

  Insufficient domestic food         Long distance, bad transportation
  production, imports nearly three   conditions, absence of highways,
  times larger than exports          limited railway service

  Increased urban population         Weak economy affects consumer
                                     purchasing power, low average net
                                     wage, high unemployment rate

  High quality of U.S. products      Consumers more interested in price
                                     than in quality

  Import duties low if compared to   Illegally imported and low-quality
  other counties in the region       products compete with legitimately
                                     imported foods

  Relatively low costs for           Different distribution systems in
  introduction and promotion of new  the two Entities, different taxation
  products using local broadcast and system; difficulties in finding a
  print media or in-store promotions reliable and capable local partner
                                     to carry out marketing and
                                     distribution

  Increasing number of large retail  Domestic market flooded with
  supermarkets                       products imported from ex-Yugoslavia
                                     neighboring countries (FTAs) and EU
                                     countries

  Fascination with American culture  Reservations towards GM foods due to
  (language, music, TV shows,        a lack of consumer education on the
  fashions) carries over to American subject and a desire to meet EU
  food, such as famous "Coca Cola"   requirements
  ---------------------------------- ------------------------------------

##### II. Exporters Business Tips

####### 

####### ***Local business customs*** 

Importers/wholesalers/distributors provide transportation, product
storage, market information, financing, and some insurance.

Finding an agent and/or distributor is the most effective way to market
consumer goods. The U.S. Foreign Commercial Service can help you locate
qualified distributors. For more information, please see:
http://www.buyusa.gov/bosniaandherzegovina/en/

The distribution systems are different for the F BiH and the RS because
of differing legal frameworks. There have been efforts lately to
harmonization rules between the two entities and currently the
differences are related mostly to the Entities' tax regimes. It is often
necessary to develop relations with distributors in both Entities in
order to cover the whole country.

Some foreign companies have established a representative office in order
to control distribution channels (e.g. P&G and Wrigley's). Wrigley's
relies on three distributors and a number of small jobbers to penetrate
the market. The company also has sales offices across the country to
coordinate marketing efforts. Some companies rely on strong local
companies to control distribution channels. Local companies prefer to do
business with people they know well. Business friendships are highly
valued. Establishing a local presence and employing local people signal
long-term commitment to the market, and are well received (Country
Commercial Guide).

######### General Consumer Tastes and Preferences 

Generally speaking, most consumers view price as the primary factor in
their food purchasing decision. Preferences tend toward large packages
at lower prices. Shopping centers are becoming an increasingly popular
retail food sales point. Most of people usually buy nonperishable foods
at large supermarket centers once or twice a month. Perishable foods,
fruits, vegetables, bread and fresh meat are usually bought at small
grocery stores, specialized stores or green markets.

Consumption of red meats is relatively high. There are ongoing outbreaks
of animal diseases such as Q fever and classical swine fever although
these outbreaks do not appear to have shaken consumer confidence. BSE
and FMD have not been reported in BiH. Traditionally, consumption of
beef and veal is the higher than poultry, pork or lamb. Pork consumption
is much higher in the RS than in the F BiH because of F BiH's large
Muslim population.

A typical Bosnian meal is composed of either red or white meat, potatoes
and some other vegetables. Rice is a common dish that on average is
eaten once a week. Apples are the most popular fruit. There are only few
ethnic restaurants (e.g., Italian, Chinese, Mexican). Fish consumption
is traditionally low (around 2 kilograms/year).

The demand for organic foods is quite low. Imported organic foods are
usually sold in specialized stores, and are consumed by the ex-patriot
community and as a pseudo-medicinal treatment for the sick.

Consumers generally dislike genetically modified (GM) foods. Advanced
consumers think that they don't have enough information to be pro or
against biotech products, and that they need more education in order to
decide whether or not they'll consume them. More information could
change consumer attitudes towards biotechnology in a positive direction.
Additionally, more knowledgeable consumers say they would eat biotech
foods after proper testing and labeling, so they could decide whether
they want to buy such a product.

In general, most people prefer to prepare meals at home from fresh food
items than buy ready-to-eat and frozen meals. There is the belief that
fresh cooked food is healthier and that frozen ready to eat foods are
overpriced. Supermarkets do offer ready to eat meals but at relatively
high prices.

There is a small but well off market segment made up of all of the
foreigners in BiH (especially in Sarajevo and Banja Luka) that work for
foreign humanitarian and military organizations.

#### *Food Standards and Regulations* 

# Please refer to FAIRS Report [BK 4018]{.underline} (this report may be downloaded from http://www.fas.usda.gov/scriptsw/attacherep/default.asp.

###### *General Import and Inspection Procedures*

Foreign exporters can import food products into BiH using a locally
registered office or a local company/shipping agency registered for
import activities. It is common for agents to help with food import
regulations.

Prior import approvals and licenses are required for live animals and
animal products and seeds and pesticides. For animals and certain animal
products the State Veterinary Administration (SVA) provides prior
approvals and final approval for live animals, embryo and semen is
provided by the Ministry of foreign Trade and Economic Relations
(MOFTER). For seeds, planting materials and pesticides the entities'
agriculture ministries provide prior approvals and MOFTER issues import
licenses. Forms are available at the SVA and the Ministries (see Key
Contacts and Further Information). It is important to note that
requirements for prior import approvals differ between the two Entities.

All food products must be accompanied with standard documents that
follow each shipment and by health certificates issued by relevant
authorities of exporting countries (e.g. veterinary certificate for meat
and meat products, phyto-sanitary certificates for fruits, vegetables,
seeds etc.) and are subject to veterinary and phyto-sanitary inspections
at border crossings and sanitary and market inspections at customs
points.

Sanitary inspectors visually inspect all food for sanitary wholesomeness
prior to customs clearance visually and take samples for laboratory
tests (Appendix II). Imported goods are held at the customs point until
testing is complete.

Market inspectors issue the quality certificates at inspection points
(see Appendix I). Quality control inspections are done at the
exporter/importer's written request, which should be received at least
24 hours prior to the customs clearance. The request for quality control
must be accompanied with basic documents that follow each shipment,
translated into Bosnian/Croatian for the F BiH or into Serbian for the
RS. The following information must be provided in the documents: type
and name of product, country of origin, exporter's name, manufacturer's
name, type and number of transport means, port of loading and unloading,
total pieces, packaging unit, gross and net weigh and product's quality
basic data. If the same product is imported again, at it has been tested
within 90 days, only visual check up is done. Both Entities have
officially recognized laboratories to test imported food products

.

If a market inspector rejects an importer's request, goods are stored
until the procedure is complete - the inspector can order the return or
destruction of goods if necessary at the cost of importer, or can order
certain changes prior to customs clearance.

**III. Market Sector Structure and Trends**

######## **Domestic Industrial Capacity** 

Before the war, the food industry was concentrated into large
state-owned companies that were also involved in primary agricultural
production, processing and wholesale and retail operations. However, at
the end of the war, the agro-processing industry was operating at less
than 10% of its pre-war capacity due to heavy damage to buildings and
equipment. In addition, the raw material supply and sales channels had
been disrupted. The agricultural production and the food industry
continued to suffer during the transition from a planned to a market
economy. Many of pre-war companies are still being privatized and are
racking up losses. There are still a few companies that have rebuilt
successful fruit, vegetable, and meat processing operations.

In general, the BiH food industry is still too small and inefficient to
compete with large foreign industries. Domestic food production is
insufficient and covers approx. 30 -- 35% of total needs.

######## **Food Retail Sector** 

In general, small retailers are slowly losing out to large wholesalers
with developed retail operations. Lately, appearance of shopping centers
(malls) has been significant and has introduced big changes in the
retail market. There are yet not many foreign retail chains, except
Slovenian "Mercator", French Interex (discount house that attracts
price-concerned consumers), Croatian "Velpro" (cash and carry) and
Serbian C Market. Those centers import and distribute food and offer a
great variety of fresh fruits and vegetables, fresh meat, exotic and
new-to-market foods, and ready-to-eat foods. They also provide good
professional service, restaurants with ready meals at favorable prices
and lots of fun (performances for kids, clowns, and win prize games/
lottery). Quite often, they organize in-store promotions and tasting of
products and provide small gifts with purchased products. A special
discount is offered to faithful customers. Food items are also sold in a
number of small independent groceries and open markets.

***Hotel, Restaurant and Institutional (HRI)***

Total turnover in catering 1998 --2002[^3]

  ------- ------------- ----------------- --------------- ----------------
          F BiH                           RS              

  Year    Total         Food and          Total turnover  Food and
          turnover (000 beverages share   (000 KM)        beverages share
          KM)           (%)                               (%)

  1998    68.831        51.37             41.996          74.27

  1999    66.794        54.98             50.566          72.11

  2000    68.900        50.70             54.584          69.69

  2001    60.784        N/A               48.312          70.58

  2002    71.010        N/A               47.917          68.00

  2003    76.270        N/A               N/A             N/A
  ------- ------------- ----------------- --------------- ----------------

HRI prepare meals themselves. They buy ingredients from various
suppliers, from small grocery stores and green markets to big producers,
retail centers and wholesalers, depending on their size and the number
of meals.

Tourism, tourism promotion, and the hospitality and catering industry
have been regulated at the Entity level. This has resulted in
business-inhibiting differences in requirements for companies and
individuals working in the sector, differences in the way funding for
tourism promotion is collected and distributed, and differences in the
way accommodation is classified.

Lately, there has been a growing consensus that tourism can be a major
source of job growth and foreign exchange earnings for Bosnia and
Herzegovina. According to foreign experts, BiH has a large potential in
niche market tourism and tapping into the world tourism market could
have huge benefits for the BiH economy.

#### *Promotional and Marketing Strategies* 

Advertising that used to be the single marketing tool in BiH is now
combined with direct marketing (door-to-door contacts, material
distribution and special offers). The most popular advertising media are
television, radio, newspapers and magazines. In addition, outdoor
advertising is becoming more and more popular (billboards, bulletins,
and displays on in urban areas and frequent roads). Recent data
indicates that 68 percent of adverting is conducted through TV, followed
by 20 percent through outdoor advertising, while radio and print media
account for 6 percent each (Country Commercial Guide 2004). Also, cable
television is rapidly developing in urban areas of BiH. Radio is the
most popular marketing tool at the local level. Direct mailing is also
becoming popular advertising tool (leaflets placed under car windshield
wipers, mailbox brochures, or advertising materials placed in
newspapers). Quite often, in-store promotions and informal gatherings
are used for presentations of the products. Supermarkets often deliver
flyers, informing on their products, prices and special discounts

Trade events and fairs are good way to market products and services to
BiH and to locate partners and distributors. The trade fair sector in
BiH has been growing rapidly lately. Fairs provide opportunities for
local and foreign companies to establish business connections. Trade
events are held throughout BiH. The Sarajevo "Agro-food" fair is the
most popular in the F BiH and for the RS the Banja Luka "Food and
Beverages" fair. Regional centers like Zenica, Tuzla, Mostar and Bihac
are very active in trade promotion.

Less than 3% of the BiH population uses the Internet regularly, and food
sales, if any, are very small.

**IV. Best High-Value Products Prospects**[^4]

+----------------------+---------------+---------------+---------------+
| PRODUCT              | 2001 IMPORTS  | 2002 IMPORTS  | 2003 IMPORTS  |
|                      |               |               |               |
|                      | (in million   | (in million   | (in million   |
|                      | KM)           | KM)           | KM)           |
+----------------------+---------------+---------------+---------------+
|                      |               |               |               |
+----------------------+---------------+---------------+---------------+
| Tobacco products     | 98            | 152           | 153.4         |
+----------------------+---------------+---------------+---------------+
| Beverages and        | 96.6          | 106.6         | 110.3         |
| mineral water        |               |               |               |
+----------------------+---------------+---------------+---------------+
| Beef                 | 64.7          | 79.9          | 98            |
+----------------------+---------------+---------------+---------------+
| Bear                 | 63.6          | 73.4          | 72            |
+----------------------+---------------+---------------+---------------+
| Chocolate            | 58.3          | 77.9          | 84.2          |
+----------------------+---------------+---------------+---------------+
| Coffee               | 52.3          | 42            | 45.7          |
+----------------------+---------------+---------------+---------------+
| Cheese               | 35.4          | 32.5          | 35.7          |
+----------------------+---------------+---------------+---------------+
| Biscuits and cookies | 30.7          | 36            | 43.5          |
+----------------------+---------------+---------------+---------------+
| Sauces and spices    | 30            | 29.2          | 30.9          |
+----------------------+---------------+---------------+---------------+
| Fish and Seafood     | 22.2          | 41.9          | 40.6          |
+----------------------+---------------+---------------+---------------+
| Wine                 | 14            | 16.5          | 19.9          |
+----------------------+---------------+---------------+---------------+
| Ice-cream            | 10.3          | 11.2          | 13.9          |
+----------------------+---------------+---------------+---------------+
| Walnuts, almonds,    | 4.5           | 9.1           | 13.7          |
| hazelnuts,           |               |               |               |
| pistachios, peanuts  |               |               |               |
+----------------------+---------------+---------------+---------------+

Currency note: US\$1 = KM 1.50 on 17/11/04

V. Key Contacts and Further Information

> FAS/USDA
>
> US Embassy to BiH
>
> 71000 Sarajevo
>
> Bosnia and Herzegovina
>
> Tel.: +387 33 445 700, x2099
>
> Fax:+387 33 212 692
>
> Contact person: Sanela Stanojcic

E-mail: Sanela.Stanojcic-Eminagic@usda.gov

> State Veterinary Office
>
> Radiceva 8/II
>
> 7100 Sarajevo
>
> Contact person: Darko Cobanov
>
> Bosnia and Herzegovina
>
> Tel. +387 33 258 840
>
> Fax +387 33 265 620
>
> E-mail: info@vet.gov.ba

<http://www.vet.gov.ba/>

Ministry of Foreign Trade and Economic Relations

Musala 9

71000 Sarajevo

Contact person: Marijo Perc

Tel. +387 33 663 863 (ext. 239)

Fax: +387 33 220 546

E-mail: perc@bih.net.ba

American Chamber of Commerce in Bosnia and Herzegovina

Ms. Dzenita Becic, Executive Director

Zmaja od Bosne 4, 71000 Sarajevo

Tel: 387-33-269-230 Fax: 387-33-269-232

Email: <amcham@lsinter.net>

BiH Chamber of Economy

Branislava Djurdjeva 10

71 000 Sarajevo

Tel. +387 33 663 370 and 663 636

Fax: +387 33 663 632

Email: presidoffice@komorabih.com

http://www.komorabih.com/

F BiH Chamber of Economy

Branislava Djurdjeva 10

71 000 Sarajevo

Tel. +387 33 663 370 and 667 940

Fax: +387 33 663 632 and 663 635

E-mail: webmaster@komorabih.com

http://www.kfbih.com/eng/index.htm

> RS Chamber of Commerce

Djure Danicica 1/II

78 000 Banja Luka

Tel. +387 51 301 908 and 301 838

Fax: +387 51 301 838

http://www.pkrs.inecco.net/

FIPA - Foreign Investment Promotion Agency

> Mr. Mirza Hajric, Director
>
> Phone: 387-33-278-080
>
> Fax: 387-33-278-081
>
> Email: hajric@fipa.gov.ba
>
> Branilaca Sarajeva 21/lll
>
> 71000 Sarajevo
>
> Bosnia and Herzegovina
>
> Web Site: www.fipa.gov.ba

Institute for Accreditations of Bosnia and Herzegovina

> Mr. Zarko Petrovic, Director
>
> Hamdije Cemerlica 2/7
>
> 71000 Sarajevo
>
> Phone/Fax: 387-33-715-540

APPENDIX I. STATISTICS[^5]

+-----------------------------------------------------+-------+--------+
| ###### TABLE A. KEY TRADE & DEMOGRAPHIC INFORMATION | YEAR  | VALUE  |
+-----------------------------------------------------+-------+--------+
| Agricultural Imports From All Countries (\$Mil) /   | 2003  | 224/ 3 |
| U.S. Market Share (%) ^1/^                          |       |        |
+-----------------------------------------------------+-------+--------+
| Consumer Food Imports From All Countries (\$Mil) /  | 2003  | 389/ 1 |
| U.S. Market Share (%)^1/^                           |       |        |
+-----------------------------------------------------+-------+--------+
| Edible Fishery Imports From All Countries (\$Mil) / | 2003  | 17/ 1  |
| U.S. Market Share (%)^1/^                           |       |        |
+-----------------------------------------------------+-------+--------+
| Total Population (Millions) / Annual Growth Rate    | 2002/ | 3,828/ |
| (%)                                                 |       | 1.3%   |
|                                                     | 2001  |        |
+-----------------------------------------------------+-------+--------+
| Urban Population (Millions) / Annual Growth Rate    | n/a   | n/a    |
| (%)                                                 |       |        |
+-----------------------------------------------------+-------+--------+
| Number of Major Metropolitan Areas ^2/^             | 2002  | 0      |
+-----------------------------------------------------+-------+--------+
| Size of the Middle Class (Millions) / Growth Rate   | n/a   | n/a    |
| (%)                                                 |       |        |
+-----------------------------------------------------+-------+--------+
| Per Capita Gross Domestic Product (U.S. Dollars)    | 2003  | 1.822  |
+-----------------------------------------------------+-------+--------+
| Unemployment Rate (%)                               | 2003  | 42%    |
+-----------------------------------------------------+-------+--------+
| Per Capita Food Expenditures (U.S. Dollars) ^3/^    | 2003  | 875    |
+-----------------------------------------------------+-------+--------+
| Percent of Female Population Employed               | 2000  | 34.5%  |
+-----------------------------------------------------+-------+--------+
| Exchange Rate                                       | 10/   | US     |
|                                                     | 29/04 | \$1.00 |
|                                                     |       | = 1.54 |
|                                                     |       | KM     |
+-----------------------------------------------------+-------+--------+
| Footnotes:                                          |       |        |
+-----------------------------------------------------+-------+--------+
| ^1/^ Data from FAS' web-enabled UNTrade database    |       |        |
| (HS 6-digit option; Import Market Share BICO 3-Year |       |        |
| format)                                             |       |        |
+-----------------------------------------------------+-------+--------+
| ^2/^ There are no metropolitan areas with           |       |        |
| population in excess of 1,000,000                   |       |        |
+-----------------------------------------------------+-------+--------+
| ^3/^ The figure presents food expenditures for a    |       |        |
| basket composed of necessary food products.         |       |        |
+-----------------------------------------------------+-------+--------+

TABLE B. CONSUMER FOOD & EDIBLE FISHERY PRODUCT IMPORTS

  ------------------------------- --------- ------ ------ --------- ------ ------ -------- ------ ------
  Bosnia-Hercegovina Imports      Imports                 Imports                 U.S.            
                                  from the                from the                Market          
                                  World                   U.S.                    Share           

  (In Millions of Dollars)        2001      2002   2003   2001      2002   2003   2001     2002   2003

  BULK AGRICULTURAL TOTAL         NA        NA     57     NA        NA     6      0        0      11

  Wheat                           NA        NA     26     NA        NA     6      0        0      22

  Coarse Grains                   NA        NA     1      NA        NA     0      0        0      0

  Rice                            NA        NA     3      NA        NA     0      0        0      0

  Soybeans                        NA        NA     1      NA        NA     0      0        0      0

  Other Oilseeds                  NA        NA     1      NA        NA     0      0        0      0

  Cotton                          NA        NA     1      NA        NA     0      0        0      0

  Tobacco                         NA        NA     9      NA        NA     1      0        0      3

  Rubber & Allied Gums            NA        NA     1      NA        NA     0      0        0      0

  Raw Coffee                      NA        NA     9      NA        NA     0      0        0      0

  Cocoa Beans                     NA        NA     1      NA        NA     0      0        0      0

  Tea (Incl. Herb Tea)            NA        NA     1      NA        NA     0      0        0      0

  Raw Beet & Cane Sugar           NA        NA     3      NA        NA     0      0        0      0

  Pulses                          NA        NA     4      NA        NA     1      0        0      3

  Peanuts                         NA        NA     1      NA        NA     0      0        0      0

  Other Bulk Commodities          NA        NA     1      NA        NA     0      0        0      0

                                                                                                  

  INTERMEDIATE AGRICULTURAL TOTAL NA        NA     167    NA        NA     1      0        0      0

  Wheat Flour                     NA        NA     1      NA        NA     0      0        0      0

  Soybean Meal                    NA        NA     1      NA        NA     0      0        0      0

  Soybean Oil                     NA        NA     1      NA        NA     0      0        0      0

  Vegetable Oils (Excl. Soybean   NA        NA     37     NA        NA     1      0        0      0
  Oil)                                                                                            

  Feeds & Fodders (Excl. Pet      NA        NA     8      NA        NA     0      0        0      0
  Foods)                                                                                          

  Live Animals                    NA        NA     45     NA        NA     0      0        0      0

  Hides & Skins                   NA        NA     4      NA        NA     0      0        0      0

  Animal Fats                     NA        NA     1      NA        NA     0      0        0      0

  Planting Seeds                  NA        NA     3      NA        NA     0      0        0      0

  Sugars, Sweeteners, & Beverage  NA        NA     46     NA        NA     0      0        0      0
  Bases                                                                                           

  Essential Oils                  NA        NA     8      NA        NA     0      0        0      0

  Other Intermediate Products     NA        NA     12     NA        NA     0      0        0      0

                                                                                                  

  CONSUMER-ORIENTED AGRICULTURAL  NA        NA     389    NA        NA     2      0        0      1
  TOTAL                                                                                           

  Snack Foods (Excl. Nuts)        NA        NA     48     NA        NA     0      0        0      0

  Breakfast Cereals & Pancake Mix NA        NA     2      NA        NA     0      0        0      0

  Red Meats, Fresh/Chilled/Frozen NA        NA     19     NA        NA     0      0        0      0

  Red Meats, Prepared/Preserved   NA        NA     24     NA        NA     0      0        0      0

  Poultry Meat                    NA        NA     8      NA        NA     0      0        0      0

  Dairy Products (Excl. Cheese)   NA        NA     42     NA        NA     0      0        0      0

  Cheese                          NA        NA     16     NA        NA     0      0        0      0

  Eggs & Products                 NA        NA     1      NA        NA     0      0        0      0

  Fresh Fruit                     NA        NA     39     NA        NA     0      0        0      0

  Fresh Vegetables                NA        NA     11     NA        NA     0      0        0      0

  Processed Fruit & Vegetables    NA        NA     18     NA        NA     1      0        0      0

  Fruit & Vegetable Juices        NA        NA     2      NA        NA     0      0        0      0

  Tree Nuts                       NA        NA     4      NA        NA     1      0        0      7

  Wine & Beer                     NA        NA     31     NA        NA     0      0        0      0

  Nursery Products & Cut Flowers  NA        NA     6      NA        NA     0      0        0      0

  Pet Foods (Dog & Cat Food)      NA        NA     1      NA        NA     0      0        0      0

  Other Consumer-Oriented         NA        NA     115    NA        NA     2      0        0      2
  Products                                                                                        

                                                                                                  

  FOREST PRODUCTS (EXCL. PULP &   NA        NA     38     NA        NA     1      0        0      0
  PAPER)                                                                                          

  Logs & Chips                    NA        NA     1      NA        NA     0      0        0      0

  Hardwood Lumber                 NA        NA     1      NA        NA     0      0        0      0

  Softwood and Treated Lumber     NA        NA     1      NA        NA     0      0        0      0

  Panel Products (Incl. Plywood)  NA        NA     22     NA        NA     0      0        0      0

  Other Value-Added Wood Products NA        NA     13     NA        NA     1      0        0      0

                                                                                                  

  FISH & SEAFOOD PRODUCTS         NA        NA     17     NA        NA     1      0        0      1

  Salmon                          NA        NA     1      NA        NA     1      0        0      3

  Surimi                          NA        NA     1      NA        NA     0      0        0      0

  Crustaceans                     NA        NA     1      NA        NA     0      0        0      0

  Groundfish & Flatfish           NA        NA     3      NA        NA     1      0        0      0

  Molluscs                        NA        NA     1      NA        NA     1      0        0      6

  Other Fishery Products          NA        NA     13     NA        NA     1      0        0      0

                                                                                                  

  AGRICULTURAL PRODUCTS TOTAL     NA        NA     613    NA        NA     8      0        0      1

  AGRICULTURAL, FISH & FORESTRY   NA        NA     669    NA        NA     8      0        0      1
  TOTAL                                                                                           

  Source: FAS\' Global                                                                            
  Agricultural Trade System using                                                                 
  data from the United Nations                                                                    
  Statistical Office                                                                              
  ------------------------------- --------- ------ ------ --------- ------ ------ -------- ------ ------

TABLE C. TOP 15 SUPPLIERS OF CONSUMER FOODS & EDIBLE FISHERY PRODUCTS

#### CONSUMER-ORIENTED AGRICULTURAL TOTAL 

  ---------------------------------- ----------- ----------- --------------
  Reporting Country:\                Import                  
  Bosnia-Hercegovina\                                        
  Top 15 Ranking                                             

                                     2001        2002        2003

                                     1000\$      1000\$      1000\$

  Croatia                            0           0           104,308

  Slovenia                           0           0           70,315

  Austria                            0           0           28,171

  Germany                            0           0           27,067

  Italy                              0           0           26,807

  Poland                             0           0           18,656

  Netherlands                        0           0           18,330

  Ecuador                            0           0           17,512

  Hungary                            0           0           13,601

  Turkey                             0           0           6,997

  Spain                              0           0           6,878

  Serbia & Montenegro                0           0           6,134

  Areas NES                          0           0           5,021

  Czech Republic                     0           0           4,060

  France                             0           0           3,481

  Other                              0           0           31,498

  World                              0           0           388,861
  ---------------------------------- ----------- ----------- --------------

+-----------------------------------------------------------------------+
| NA - Data not available (not reported)       Data: Harmonized Tariff  |
| Schedule (HS 6 Digit)                                                 |
+-----------------------------------------------------------------------+
| Source: FAS\' Global Agricultural Trade System using data from the    |
| United Nations Statistical Office                                     |
+-----------------------------------------------------------------------+
| #### FISH & SEAFOOD PRODUCTS                                          |
|                                                                       |
| +---------------------------------------+-------+-------+--------+    |
| | ##### Reporting Count                 | ##    |       |        |    |
| | ry: Bosnia-Hercegovina Top 15 Ranking | ### I |       |        |    |
| |                                       | mport |       |        |    |
| +---------------------------------------+-------+-------+--------+    |
| |                                       | ##### | ##### | ####   |    |
| |                                       |  2001 |  2002 | # 2003 |    |
| +---------------------------------------+-------+-------+--------+    |
| | #####                                 | ##    | ##    | #####  |    |
| |                                       | ### 1 | ### 1 | 1000\$ |    |
| |                                       | 000\$ | 000\$ |        |    |
| +---------------------------------------+-------+-------+--------+    |
| | ##### Croatia                         | ###   | ###   | #####  |    |
| |                                       | ## NA | ## NA |  7,425 |    |
| +---------------------------------------+-------+-------+--------+    |
| | ##### Argentina                       | ###   | ###   | #####  |    |
| |                                       | ## NA | ## NA |  2,487 |    |
| +---------------------------------------+-------+-------+--------+    |
| | ##### Italy                           | ###   | ###   | #####  |    |
| |                                       | ## NA | ## NA |  1,789 |    |
| +---------------------------------------+-------+-------+--------+    |
| | ##### Slovenia                        | ###   | ###   | #####  |    |
| |                                       | ## NA | ## NA |  1,336 |    |
| +---------------------------------------+-------+-------+--------+    |
| | ##### Spain                           | ###   | ###   | #####  |    |
| |                                       | ## NA | ## NA |  1,291 |    |
| +---------------------------------------+-------+-------+--------+    |
| | ##### Thailand                        | ###   | ###   | #####  |    |
| |                                       | ## NA | ## NA |  1,240 |    |
| +---------------------------------------+-------+-------+--------+    |
| | ##### Areas NES                       | ###   | ###   | ###    |    |
| |                                       | ## NA | ## NA | ## 311 |    |
| +---------------------------------------+-------+-------+--------+    |
| | ##### Germany                         | ###   | ###   | ###    |    |
| |                                       | ## NA | ## NA | ## 208 |    |
| +---------------------------------------+-------+-------+--------+    |
| | ##### Denmark                         | ###   | ###   | ###    |    |
| |                                       | ## NA | ## NA | ## 160 |    |
| +---------------------------------------+-------+-------+--------+    |
| | ##                                    | ###   | ###   | ###    |    |
| | ### Falkland Islands (Islas Malvinas) | ## NA | ## NA | ## 158 |    |
| +---------------------------------------+-------+-------+--------+    |
| | ##### Peru                            | ###   | ###   | ###    |    |
| |                                       | ## NA | ## NA | ## 129 |    |
| +---------------------------------------+-------+-------+--------+    |
| | ##### Turkey                          | ###   | ###   | ##     |    |
| |                                       | ## NA | ## NA | ### 99 |    |
| +---------------------------------------+-------+-------+--------+    |
| | ##### United States                   | ###   | ###   | ##     |    |
| |                                       | ## NA | ## NA | ### 92 |    |
| +---------------------------------------+-------+-------+--------+    |
| | ##### Estonia                         | ###   | ###   | ##     |    |
| |                                       | ## NA | ## NA | ### 79 |    |
| +---------------------------------------+-------+-------+--------+    |
| | ##### France                          | ###   | ###   | ##     |    |
| |                                       | ## NA | ## NA | ### 74 |    |
| +---------------------------------------+-------+-------+--------+    |
| | ##### Other                           | ##    | ##    | ###    |    |
| |                                       | ### 0 | ### 0 | ## 416 |    |
| +---------------------------------------+-------+-------+--------+    |
| | ##### World                           | ##    | ##    | #####  |    |
| |                                       | ### 0 | ### 0 | 17,301 |    |
| +---------------------------------------+-------+-------+--------+    |
|                                                                       |
| #####                                                                 |
|                                                                       |
|   ------------------------------------------------------------------  |
|   NA - Data not available (not reported)       Data: Harmonized       |
|   Tariff Schedule (HS 6 Digit)                                        |
|                                                                       |
|   Source: FAS\' Global Agricultural Trade System using data from the  |
|   United Nations Statistical Office                                   |
|   ------------------------------------------------------------------  |
+-----------------------------------------------------------------------+

[^1]: According to the Dayton Peace Agreement signed in December 1995,
    Bosnia and Herzegovina (BiH) is divided into two Entities: the
    Federation of Bosnia and Herzegovina (F BiH) and Republika Srpska
    (RS). There is also the Brcko District with a special administrative
    status. Understanding this dual governmental structure is important
    to doing business in the country.

[^2]: Sources: Central Bank of Bosnia and Herzegovina and Country
    Commercial Guide

[^3]: Sources : F BiH and RS Institutes for Statistics

[^4]: Source: Entities' statistical institutes

[^5]: Sources: BiH Agency of Statistics, FBiH and RS Institutes of
    Statistics