Required Report - public distribution

**Date:** 8/31/2004

**GAIN Report Number:** RO4014

RO4014

**Romania**

**Livestock and Products**

**Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Brian Goggin

U.S. Embassy Bucharest

**Prepared by:**

Cristina Cionga

**Report Highlights:** Swine inventories in 2004 have slightly
diminished compared to the previous year, after the very severe drought
in the summer of 2003, which dramatically raised feed prices. Although
live cattle are a major agricultural export item of Romania, the country
remains a net importer for both beef and pork, including from US. The
current production subsidies are anticipated to result in some recovery
of the livestock sector in 2005, evolution to which the upward trend in
consumption prices is also contributing.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Unscheduled Report

Sofia \[BU1\]

\[RO\]

Table of Contents

[Production 3](#production)

[Production, Supply and Demand Table
4](#production-supply-and-demand-table)

[Production, Supply and Demand Table
5](#production-supply-and-demand-table-1)

[Production, Supply and Demand Table
5](#production-supply-and-demand-table-2)

[Production, Supply and Demand Table
6](#production-supply-and-demand-table-3)

[Consumption 6](#consumption)

[Graph 1. Meat Consumption Preferences
7](#graph-1.-meat-consumption-preferences)

[Trade 8](#trade)

[Export Trade Matrix 8](#export-trade-matrix)

[Import Trade Matrix 9](#import-trade-matrix)

[Import Trade Matrix 10](#import-trade-matrix-1)

[Import Trade Matrix 10](#import-trade-matrix-2)

[Table 1. Romanian Bindings vs. Applied Tariffs in 2004 (percent)
11](#table-1.-romanian-bindings-vs.-applied-tariffs-in-2004-percent)

[Domestic Support 12](#domestic-support)

[Table 2. "Green Box"-type measures of support, budgetary allocations in
2004
12](#table-2.-green-box-type-measures-of-support-budgetary-allocations-in-2004)

[Table 3. Product-Specific Aggregate Measurement of Support: Market
Price Support
12](#table-3.-product-specific-aggregate-measurement-of-support-market-price-support)

[Prices 12](#prices)

[Prices Table 13](#prices-table)

[Prices Table 13](#prices-table-1)

# 

# Production

Romania's swine inventories reached, in the beginning of the MY2004,
5.14 million heads, representing a 1.7 percent increase from the
previous year, although sow stocks were 8 percent down. This situation
(attributed to the extremely severe drought that affected the grain and
feed sector in 2003) partly explains the decline in livestock numbers in
the first the first half of the year 2004, with over 400,000 hogs less
than in January-June 2003, and likely to continue shrinking swine herds
until the end of December. However, a wide range of governmental
programs meant to support livestock population and production (described
in more detail below), if not discontinued after the November 2004
elections, are expected to result in some recovery in 2005. The majority
of this swine population (a steady 75 percent) is held in individual
households, while only 23 percent of the animals are bred in large farms
(of over 3,000 commercial hogs). Nonetheless, some new commercial
operations, developed by private investors, are emerging. As an example,
the largest Romanian (and one of the largest by worldwide standards)
integrated operation, located the western part of the country, has been
recently acquired by a major multinational.

Cattle inventory was steady throughout 2003 and no significant changes
are expected by the end of 2004. A trait of the bovine sector in Romania
is that there are no differences in feed ration formulation for dairy
cows versus beef cows. In fact, there are no statistical registrations
to make the distinction between the two categories of animals. Cattle
and calves on feed stood at roughly 2.9 million heads in the beginning
of 2004 and some increase was registered during the first half of the
year (in absolute terms, with 2,000 animals) as against the same period
of 2003. Even though bovine growers are eligible for different GOR
subsidy schemes, recovery in the sector is very slow, due to both the
long production cycle and the structural deficiencies that are
characteristic to the Romanian agriculture, where market-oriented
operations coexist with small subsidence farms, requiring deep
restructuring. This means that most production continues to come from
small farms. Households holding 1-2 cows count for the majority of dairy
cows inventories (about 80 percent). Less than 40 percent of the
domestic beef production (i.e., 142,000 MT, on a liveweight basis) goes
to meat processing units, while 26 percent are self-consumed in rural
households and the remaining 35 percent supplied to the retail market.

We anticipate that pig meat production in 2004 will be down by some 5
percent, because of a drop in the number of animals slaughtered,
although this may be partly compensated by some increases in the average
carcass weight. For the first half of the year, the official Ministry of
Agriculture statistics show that the average liveweight at slaughtering
was 105 KG (versus 103 KG in January-June 2003) for hogs and,
respectively, 359 KG (versus 346 KG) for bovine cattle, reportedly
attributed to improved feed and forage practices at farm level. In 2004,
only about 32 percent of domestic pork supply was delivered to
processors, while the share of self-consumption remained very high, at
about 60 percent, with the balance directly sold on the retail market.
This is insufficient to cover the local processing demand, so that
significant amounts of pork cuts (almost balancing the domestic
supplies) are annually imported.

It is generally assessed that after Romania will become an EU member
(optimistically scheduled for 2007), only the few farms currently
equipped with competitive technologies will remain operational. The
recently issued EU position paper, referring to the completion of
negations on agriculture with Romania, stressed the importance of the
accession preparations considering all aspects of food safety along the
production chain, including primary production, the production of animal
feed and consumer safety. Although the EU meat industry is subject to
strict sanitary regulations, according to the document, Romania was
granted a transition period until December 31, 2009 for modernizing and
re-vamping its slaughtering and meat processing units, in compliance
with the Community requirements, while products from establishments
subject to transitional arrangements will not be sold to other Member
States and will be clearly identified. In absolute numbers, this is how
the Romanian industry is foreseen to look in 2010: out of the existing
meat processing capacity (totaling 728,000 MT/year for slaughtering and,
respectively, 777,000 MT/year strictly for processing), about 30 percent
will be shut down. This means that, out of the total of 561
slaughterhouses registered in 2004, only 4 are EU-requirement compliant,
14 are to be revamped by 2007, 20 will be modernized by 2010, while the
remaining 523 are listed to be closed. A similar situation is in
processing[^1]: 5 plants are EU-compliant, 52 will be revamped by 2007,
17 by 2010, while 507 are likely to be shut down.

## Production, Supply and Demand Table

  ------------------ ----------- ------------- ----------- -------------- ----------- -------------- ---------
  **Romania**                                                                                        

  **Animal Numbers,                                                                                  
  Cattle**                                                                                           

                     **2003**    **Revised**   **2004**    **Estimate**   **2005**    **Forecast**   **UOM**

                     **USDA      **Post        **USDA      **Post         **USDA      **Post         ** **
                     Official    Estimate      Official    Estimate       Official    Estimate       
                     \[Old\]**   \[New\]**     \[Old\]**   \[New\]**      \[Old\]**   \[New\]**      

  **Market Year                  01/2003                   01/2004                    01/2005        MM/YYYY
  Begin**                                                                                            

  **Total Cattle     2878        2878          2890        2897           2910        2890           (1000
  Beg. Stks**                                                                                        HEAD)

  **Dairy Cows Beg.  1738        1759          1776        1757           0           1760           (1000
  Stks**                                                                                             HEAD)

  **Beef Cows Beg.   0           0             0           0              0           0              (1000
  Stocks**                                                                                           HEAD)

  **Production (Calf 1430        1410          1434        1408           0           1420           (1000
  Crop)**                                                                                            HEAD)

  **Intra EC         0           0             0           0              0           0              (1000
  Imports**                                                                                          HEAD)

  **Total Imports**  24          1             28          1              0           2              (1000
                                                                                                     HEAD)

  **TOTAL Imports**  24          1             28          1              0           2              (1000
                                                                                                     HEAD)

  **TOTAL SUPPLY**   4332        4289          4352        4306           2910        4312           (1000
                                                                                                     HEAD)

  **Intra EC         0           0             0           0              0           0              (1000
  Exports**                                                                                          HEAD)

  **Total Exports**  60          152           62          120            0           115            (1000
                                                                                                     HEAD)

  **TOTAL Exports**  60          152           62          120            0           115            (1000
                                                                                                     HEAD)

  **Cow Slaughter**  1060        960           1060        1000           0           1005           (1000
                                                                                                     HEAD)

  **Calf Slaughter** 40          38            40          41             0           40             (1000
                                                                                                     HEAD)

  **Other            224         180           224         200            0           195            (1000
  Slaughter**                                                                                        HEAD)

  **Total            1324        1178          1324        1241           0           1240           (1000
  Slaughter**                                                                                        HEAD)

  **Loss**           58          62            56          55             0           57             (1000
                                                                                                     HEAD)

  **Ending           2890        2897          2910        2890           0           2900           (1000
  Inventories**                                                                                      HEAD)

  **TOTAL            4332        4289          4352        4306           0           4312           (1000
  DISTRIBUTION**                                                                                     HEAD)

  **Calendar Yr.     0           0             0           0              0           0              (1000
  Imp. from U.S.**                                                                                   HEAD)

  **Calendar Yr.     0           0             0           0              0           0              (1000
  Exp. to U.S.**                                                                                     HEAD)
  ------------------ ----------- ------------- ----------- -------------- ----------- -------------- ---------

## Production, Supply and Demand Table

  --------------------- ----------- ------------- ----------- -------------- ----------- -------------- ----------
  **Romania**                                                                                           

  **Meat, Beef and                                                                                      
  Veal**                                                                                                

                        **2003**    **Revised**   **2004**    **Estimate**   **2005**    **Forecast**   **UOM**

                        **USDA      **Post        **USDA      **Post         **USDA      **Post         ** **
                        Official    Estimate      Official    Estimate       Official    Estimate       
                        \[Old\]**   \[New\]**     \[Old\]**   \[New\]**      \[Old\]**   \[New\]**      

  **Market Year Begin**             01/2003                   01/2004                    01/2005        MM/YYYY

  **Slaughter           1324        1178          1324        1241           0           1240           (1000
  (Reference)**                                                                                         HEAD)

  **Beginning Stocks**  0           0             0           0              0           0              (1000 MT
                                                                                                        CWE)

  **Production**        202         190           204         205            0           210            (1000 MT
                                                                                                        CWE)

  **Intra EC Imports**  0           0             0           0              0           0              (1000 MT
                                                                                                        CWE)

  **Total Imports**     5           3             3           4              0           3              (1000 MT
                                                                                                        CWE)

  **TOTAL Imports**     5           3             3           4              0           3              (1000 MT
                                                                                                        CWE)

  **TOTAL SUPPLY**      207         193           207         209            0           213            (1000 MT
                                                                                                        CWE)

  **Intra EC Exports**  0           0             0           0              0           0              (1000 MT
                                                                                                        CWE)

  **Total Exports**     1           0             0           1              0           2              (1000 MT
                                                                                                        CWE)

  **TOTAL Exports**     1           0             0           1              0           2              (1000 MT
                                                                                                        CWE)

  **Human Dom.          159         150           158         160            0           161            (1000 MT
  Consumption**                                                                                         CWE)

  **Other Use, Losses** 47          43            49          48             0           50             (1000 MT
                                                                                                        CWE)

  **TOTAL Dom.          206         193           207         208            0           211            (1000 MT
  Consumption**                                                                                         CWE)

  **Ending Stocks**     0           0             0           0              0           0              (1000 MT
                                                                                                        CWE)

  **TOTAL               207         193           207         209            0           213            (1000 MT
  DISTRIBUTION**                                                                                        CWE)

  **Calendar Yr. Imp.   0           0             0           0              0           0              (1000 MT
  from U.S.**                                                                                           CWE)

  **Calendar Yr. Exp.   0           0             0           0              0           0              (1000 MT
  to U.S.**                                                                                             CWE)
  --------------------- ----------- ------------- ----------- -------------- ----------- -------------- ----------

# 

## 

## Production, Supply and Demand Table

  --------------------- ----------- ------------- ----------- -------------- ----------- -------------- ---------
  **Romania**                                                                                           

  **Animal Numbers,                                                                                     
  Swine**                                                                                               

                        **2003**    **Revised**   **2004**    **Estimate**   **2005**    **Forecast**   **UOM**

                        **USDA      **Post        **USDA      **Post         **USDA      **Post         ** **
                        Official    Estimate      Official    Estimate       Official    Estimate       
                        \[Old\]**   \[New\]**     \[Old\]**   \[New\]**      \[Old\]**   \[New\]**      

  **Market Year Begin**             01/2003                   01/2004                    01/2005        MM/YYYY

  **TOTAL Beginning     5058        5058          5196        5145           5321        5070           (1000
  Stocks**                                                                                              HEAD)

  **Sow Beginning       359         362           362         335            0           340            (1000
  Stocks**                                                                                              HEAD)

  **Production (Pig     6210        5600          6320        5200           0           5440           (1000
  Crop)**                                                                                               HEAD)

  **Intra EC Imports**  0           0             0           0              0           0              (1000
                                                                                                        HEAD)

  **Total Imports**     230         116           215         95             0           100            (1000
                                                                                                        HEAD)

  **TOTAL Imports**     230         116           215         95             0           100            (1000
                                                                                                        HEAD)

  **TOTAL SUPPLY**      11498       10774         11731       10440          5321        10610          (1000
                                                                                                        HEAD)

  **Intra EC Exports**  0           0             0           0              0           0              (1000
                                                                                                        HEAD)

  **Total Exports**     0           0             0           0              0           0              (1000
                                                                                                        HEAD)

  **TOTAL Exports**     0           0             0           0              0           0              (1000
                                                                                                        HEAD)

  **Sow Slaughter**     369         0             360         0              0           0              (1000
                                                                                                        HEAD)

  **OTHER SLAUGHTER**   5386        5200          5512        4950           0           5080           (1000
                                                                                                        HEAD)

  **Total Slaughter**   5755        5200          5872        4950           0           5080           (1000
                                                                                                        HEAD)

  **Loss**              547         429           538         420            0           430            (1000
                                                                                                        HEAD)

  **Ending              5196        5145          5321        5070           0           5100           (1000
  Inventories**                                                                                         HEAD)

  **TOTAL               11498       10774         11731       10440          0           10610          (1000
  DISTRIBUTION**                                                                                        HEAD)

  **Calendar Yr. Imp.   0           0             0           0              0           0              (1000
  from U.S.**                                                                                           HEAD)

  **Calendar Yr. Exp.   0           0             0           0              0           0              (1000
  to U.S.**                                                                                             HEAD)
  --------------------- ----------- ------------- ----------- -------------- ----------- -------------- ---------

## Production, Supply and Demand Table

  --------------------- ----------- ------------- ----------- -------------- ----------- -------------- -----------
  **Romania**                                                                                           

  **Meat, Swine**                                                                                       

                        **2003**    **Revised**   **2004**    **Estimate**   **2005**    **Forecast**   **UOM**

                        **USDA      **Post        **USDA      **Post         **USDA      **Post         ** **
                        Official    Estimate      Official    Estimate       Official    Estimate       
                        \[Old\]**   \[New\]**     \[Old\]**   \[New\]**      \[Old\]**   \[New\]**      

  **Market Year Begin**             01/2003                   01/2004                    01/2005        MM/YYYY

  **Slaughter           5755        5200          5872        4950           0           5080           (1000 HEAD)
  (Reference)**                                                                                         

  **Beginning Stocks**  14          0             12          0              8           0              (1000 MT
                                                                                                        CWE)

  **Production**        435         433           443         412            0           420            (1000 MT
                                                                                                        CWE)

  **Intra EC Imports**  0           0             0           0              0           0              (1000 MT
                                                                                                        CWE)

  **Total Imports**     50          102           38          90             0           95             (1000 MT
                                                                                                        CWE)

  **TOTAL Imports**     50          102           38          90             0           95             (1000 MT
                                                                                                        CWE)

  **TOTAL SUPPLY**      499         535           493         502            8           515            (1000 MT
                                                                                                        CWE)

  **Intra EC Exports**  0           0             0           0              0           0              (1000 MT
                                                                                                        CWE)

  **Total Exports**     0           0             0           0              0           0              (1000 MT
                                                                                                        CWE)

  **TOTAL Exports**     0           0             0           0              0           0              (1000 MT
                                                                                                        CWE)

  **Human Dom.          423         470           426         442            0           455            (1000 MT
  Consumption**                                                                                         CWE)

  **Other Use, Losses** 64          65            59          60             0           60             (1000 MT
                                                                                                        CWE)

  **TOTAL Dom.          487         535           485         502            0           515            (1000 MT
  Consumption**                                                                                         CWE)

  **Ending Stocks**     12          0             8           0              0           0              (1000 MT
                                                                                                        CWE)

  **TOTAL               499         535           493         502            0           515            (1000 MT
  DISTRIBUTION**                                                                                        CWE)

  **Calendar Yr. Imp.   0           2.3           0           10             0           0              (1000 MT
  from U.S.**                                                                                           CWE)

  **Calendar Yr. Exp.   0           0             0           0              0           0              (1000 MT
  to U.S.**                                                                                             CWE)
  --------------------- ----------- ------------- ----------- -------------- ----------- -------------- -----------

# 

# 

# Consumption

Per capita meat consumption in Romania is about half of the EU average
(92 KG). Romanians show a strong preference for pork (Graph 1), though
chicken meat's share in the average diet is increasing.

## Graph 1. Meat Consumption Preferences

![](media/image2.wmf)

## 

Animal protein intake continues to be relatively low in the consumption
pattern (about 19 percent), although we forecast an increase in 2005, in
tandem with higher incomes resulting from a stable economic growth (of
an average of 5 percent over the past 4 years and another 5.3 forecast
for 2005). Continued strong consumption growth has been one of the
driving factors to GDP expansion, but this translated less in food
consumption in the beginning of the 5-year economic growth period. The
expenditure structure was heavily influenced by the fact that population
started receiving access to individual loans and thus preferred to buy
dwellings or household durable goods.

Production of processed meat products was in 2003 only 155,430 MT,
because of the relatively modest domestic consumption (of only 8-9
KG/year/capita). Meat and meat products consumption pattern reveal some
seasonality, with peak periods in May-June and September-October.

The estimated meat products market reached in 2003 EUR 300 million. In
terms of geographical distribution, the largest processors are located
in the southern Romania.

More than half of the meat-processed products are sold in bulk, while
domestic products are preferred to the imported ones. Romanian consumers
prefer "tasty" fresh products and, though fat content and additives are
not yet an issue, there is a trend towards buying more expensive higher
quality products.

Consumers are not devoted to a single brand, but product availability
(i.e., good distribution through supermarkets and smaller points of
sale) plus an acceptable price/quality ratio are factors that influence
consumption of a certain brand.

Currently, the market is in the growing phase. The top five
meat-processing companies account for roughly 40 percent of the market,
while consolidation is expected to continue. Important foreign players
are expected to enter, because of the still relatively low labor cost
and the proximity of the country to EU and Russia. Lately, due to the
rapid appreciation of pork prices in Europe and US, as well as the
limited domestic supplies, many producers reportedly turned to black
market operations, which, according to the estimates of the meat
processing association, reached an alarming 60 percent of the total
market.

Though the meat and meat processed products market are not foreseen to
expand rapidly in terms of volume in the near future, the market value
is expected to raise, since domestic consumers are shifting to higher
value added and quality products. As of today, circumstances are quite
favorable to multinationals to make takeover bids for local producers
and, in fact, Polish, German and Dutch producers have expressed interest
in investing in the Romanian meat processing industry.

## 

# 

# Trade

In 2003 and 2004 Romania remains a net exporter of live animals (one of
the most traded agricultural products), especially cattle and sheep.
About 152,000 heads of bovine animals (mainly fattening calves to be
finished in the country of destination) were shipped in 2003 to Middle
East and Mediterranean countries (Syria, Greece, Italy, Libya) or EU
states. During the first five months of 2004, another 60,000 heads went
to the same destinations, totaling \$21 million.

## Export Trade Matrix

+----------------+-----------------------+------------+---------------+
| ###### Countr  | Romania               |            |               |
| y {#country-1} |                       |            |               |
+----------------+-----------------------+------------+---------------+
| **Commodity**  | Animal Numbers,       |            |               |
|                | Cattle                |            |               |
+----------------+-----------------------+------------+---------------+
| Time Period    |                       | Units:     | Heads         |
+----------------+-----------------------+------------+---------------+
| Exports for:   | 2003                  |            | **Jan-May     |
|                |                       |            | 2004**        |
+----------------+-----------------------+------------+---------------+
| U.S.           |                       | U.S.       |               |
+----------------+-----------------------+------------+---------------+
| Others         |                       | Others     |               |
+----------------+-----------------------+------------+---------------+
| Croatia        | 52269                 |            | 18094         |
+----------------+-----------------------+------------+---------------+
| Syria          | 40830                 |            | 14384         |
+----------------+-----------------------+------------+---------------+
| Greece         | 38891                 |            | 17180         |
+----------------+-----------------------+------------+---------------+
| Italy          | 10507                 |            | 5578          |
+----------------+-----------------------+------------+---------------+
| Libya          | 3507                  |            | 505           |
+----------------+-----------------------+------------+---------------+
| Spain          | 2030                  |            | 1045          |
+----------------+-----------------------+------------+---------------+
| Germany        | 1951                  |            | 1476          |
+----------------+-----------------------+------------+---------------+
| Jordan         |                       |            | 434           |
+----------------+-----------------------+------------+---------------+
|                |                       |            |               |
+----------------+-----------------------+------------+---------------+
|                |                       |            |               |
+----------------+-----------------------+------------+---------------+
| Total for      | 149985                |            | 58696         |
| Others         |                       |            |               |
+----------------+-----------------------+------------+---------------+
| Others not     | 1531                  |            | 301           |
| Listed         |                       |            |               |
+----------------+-----------------------+------------+---------------+
| Grand Total    | 151516                |            | 58997         |
+----------------+-----------------------+------------+---------------+

Romania and the EU reciprocally granted customs duty exemptions for
beef, under the "Double zero" agreement, as follows:

  ----------------------- ----------------------- -----------------------
  Product                 Romania's export duty   EU's export duty free
                          free quota (MT) to EU   quota (MT) to Romania

  Bovine meat             4,000                   4,000

  Beef offalls, fresh or  100                     100
  preserved                                       

  Bovine meat             500                     500
  preparations                                    
  ----------------------- ----------------------- -----------------------

In 2003, Romania imported almost 3,500 MT of beef, mostly from EU member
states, but almost did not make use of its TRQ, especially because of
the very reduced number of plants approved to ship to EU destinations.
However, because of BSE concerns, very few countries are admitted to
export live cattle/beef to Romania: Australia, Canada, Paraguay,
Denmark, Austria, Hungary, France.

Imports of US beef are banned in Romania, because of the December BSE
outbreak, although the veterinary authorities from the two countries are
currently making efforts to reach consensus on a mutually acceptable
language in the health certificate for beef products to be shipped to
Romania (especially on specific risk material --SRM --statements). Other
products (casings, beef tripe) are allowed, and, in fact, US is the main
source for such products imported into Romania.

## Import Trade Matrix

  ------------------ --------------------- -------------- ----------------
  **Country**        Romania                              

  **Commodity**      Meat, Beef and Veal                  

  Time Period                              Units:         MT

  Imports for:       2003                                 **Jan-May 2004**

  U.S.                                     U.S.            

  Others                                   Others         

  Austria            2165                                 650

  Hungary            973                                  423

  France             170                                  50

  Denmark            122                                   

  Australia          7                                     

  Germany                                                 235

                                                           

                                                           

                                                           

                                                           

  Total for Others   3437                                 1358

  Others not Listed  11                                   20

  Grand Total        3448                                 1378
  ------------------ --------------------- -------------- ----------------

For both live swine animals and pork Romania remains a net importer. Up
to May 2004, when Poland, Hungary and the Czech Republic joined the EU,
these were the most important sources for swine/pork products,
especially because their subsidized exports were able to successfully
compete with the local suppliers. In an attempt to protect the domestic
market from cheap Polish and Hungarian sales of swine meat, safeguard
measures against the two countries were introduced in July 2003,
respectively March 2004, until they became full EU members. However, the
interest of these former CEFTA trading partners to export to Romania may
diminish in the short run, as reportedly they currently seek
opportunities in Western Europe, a "market with an unquenchable
appetite". Thus, FAS Bucharest forecasts that, for the balance of the
year, as well as for 2005, pork imports from EU will diminish.

Demand for swine meat, nonetheless, remains high in Romania and thus US
can be very competitive. Using the duty suspension for pork cuts (Table
1), US pork exporters started identifying some opportunities, especially
shoulder cuts, trimmings and offal used in processing industry. In 2003,
2240 MT of pork cuts were originated from US, while another 1500 came in
January-May 2004.

## Import Trade Matrix

  ----------------- ------------------------ ----------- -----------------
  **Country**       Romania                              

  **Commodity**     Animal Numbers, Swine                

  Time Period                                Units:      Heads

  Imports for:      CY2003                               **Jan-May 2004**

  U.S.              0                        U.S.        0

  Others                                     Others      

  Hungary           94123                                39898

  The Czech Rep.    17774                                7303

  Austria           1736                                 13

  Poland            850                                  1300

  Spain             721                                  94

  France            560                                  676

  Italy             395                                   

  The Netherlands                                        354

  Germany                                                20

                                                          

  Total for Others  116159                               49658

  Others not Listed 36                                    

  Grand Total       116195                               49658
  ----------------- ------------------------ ----------- -----------------

## 

## 

## 

## 

## Import Trade Matrix

  -------------------- -------------- ---------------- -------------------
  **Country**          Romania                         

  **Commodity**        Meat, Swine                     

  Time Period                         Units:           MT

  Imports for:         2003                            **Jan-May 2004**

  U.S.                 2239           U.S.             1506

  Others                              Others           

  Poland               33887                           4196

  Germany              13069                           6820

  Hungary              10929                           5880

  France               8334                            3962

  Italy                7666                            3382

  Austria              6519                            1759

  Spain                5000                            2054

  Canada               3990                            1834

  Belgium              2738                            700

  The Czech Rep.       1130                            1231

  Total for Others     93262                           31818

  Others not Listed    8485                            3403

  Grand Total          101747                          35221
  -------------------- -------------- ---------------- -------------------

Romania is not allowed to export swine animals/meat to either EU or US,
because it has not countrywide discontinued inoculating against
classical swine fever. Nonetheless, the veterinary authorities are
strictly implementing a program agreed with EU, which started in August
2003, and which would give Romania permission to export pork from 2006.

Applied import duties for products of interest are given in Table 1
below.

## Table 1. Romanian Bindings vs. Applied Tariffs in 2004 (percent)

  ------------ -------------------------------- -------- --------- ---------------------
  HS Code                                       WTO      2004      Special EU preference
                                                bound    applied   
                                                tariff   duty      

  0102         Live bovine animals                                 

  0102.1030    Heifers for reproduction, pure   270      0         
               breeds                                              

  0102.9051    Heifers for slaughtering, over   270      25        18.8
               300 kg                                              

  0103         Live swine animals                                  

  0103.1000    For breeding                     3        0         

  0103.91, 92  For slaughtering                 270      15-20 (2) 0 for
                                                                   0103.9190,0103.9290

  0201         Bovine meat, fresh or chilled    288      20        0 for TRQ (1)

  0202         Bovine meat, frozen              315      20        0 for TRQ (1)

  0203         Meat of swine, fresh, chilled or 333      20        
               frozen                                              

               -Fresh or chilled                333                

               \--Carcasses and half carcasses: 333                

  0203.11.90   \-\--Other                       333                

               Hams, shoulders, and cuts                           
               thereof, bone in:                                   

                                                                   

  0203.12.90   \-\--Other                       333      0         

  0203.19.90   \-\--Other                       333      0         

               -Frozen (3)                                         

               \--Carcasses and half carcasses: 333      45        

  0504.00      Animal casings and tripe,        100      10 (4)    0
               whether or not cut, fresh,                          
               chilled or frozen, salted, in                       
               salted water, dried or smoked                       
               (casings)                                           
  ------------ -------------------------------- -------- --------- ---------------------

(1) TRQ for bovine meat (fresh and frozen) is 4000 MT.

(2) The CEFTA preference to Hungary was suspended until April 30, 2004,
    as the country, prior to become a full EU member from May 1, was
    currently subsidizing exports of swine animals and pork. Customs
    duty for live swine imported from Hungary was raised to 35%.

(3) Duty exemptions for pork cuts were introduced in October 2003 and
    will continue through June 30, 2004. This is because domestic
    supply, though slightly increasing, is not able to balance
    consumption in the short run. Pork carcass duty rate was increased
    to 45 percent (from 20 percent) until April 30, basically to protect
    the domestic market from cheap Polish and Hungarian sales of swine
    meat.

(4) Casings are tax exempted.

# 

# 

# Domestic Support

In order to stimulate livestock population and production, the budgetary
effort was increased in 2004, but outlays structure was pretty much
similar to the one in 2003. Some of the support programs qualify as
Green Box"-type and are measures exempted from the reduction commitment
(Table 2), while others count in the Aggregate Measurement of Support,
but are below the "de minimis level" (Table 3):

## Table 2. "Green Box"-type measures of support, budgetary allocations in 2004 

  ----------------- --------------------------------------- -------------
  Measure type      Description of measure                  Monetary
                                                            value
                                                            (billion lei)

  Direct payments   Budgetary allocations in order to       448.5
  to producers      stimulate increase in livestock         
                    numbers:                                

                    -for 252,650 calves kept for more than  131
                    6 months                                

                    -for 59,050 pregnant heifers            80

                    -for 59,000 pregnant sows               132.5

                    -for breed improvement                  50

                    -for artificial insemination (450,000   55
                    for bovines and 150,000 for swine       
                    animals)                                

  Animal disease    Parasites and epizootic control.        620
  control                                                   
  ----------------- --------------------------------------- -------------

Source: Ministry of Agriculture, Forests and Rural Development

Official exchange rate in July 2004: ROL 33,395/US\$

## Table 3. Product-Specific Aggregate Measurement of Support: Market Price Support

  ---------------------------------- ------------------- ----------------
  Product                            Eligible production Total market
                                                         price support
                                                         (billion lei)

  Live swine delivered for           100,000 MT          800
  slaughtering                                           

  Live bovine delivered for          10.000 MT           50
  slaughtering                                           

  Live sheep delivered for           2,500 MT            10
  slaughtering                                           
  ---------------------------------- ------------------- ----------------

Source: Ministry of Agriculture, Forests and Rural Development

Official exchange rate in July 2004: ROL 33,395/US\$

### 

If not discontinued after the November 2004 elections, these measures
are anticipated to result in some recovery in both cattle and swine
sectors.

# Prices

In the first half of 2004 swine meat prices have rapidly appreciated,
especially triggered by the safeguard measures introduced against CEFTA
partners. This trend is expected to continue in the short run, because
of the demand limited by both the reduction in domestic slaughtering and
the shift in Poland and Hungary's export orientation towards western
Europe.

On the contrary, ex-factory beef prices have slightly fallen in
January-May 2004, while farmers are increasingly dissatisfied with
liveweight procurement prices offered by the industry. The price gap
between beef and pork is significant (25-30 percent more for the later),
situation in total contradiction with the western markets, where beef
and veal are usually twice more expensive than swine meat.

## Prices Table 

  --------------- ------------------ ------------------- ------------------
  **Country**     Romania                                

  **Commodity**   Meat, Beef and                         
                  Veal                                   

  Prices in       US\$               per uom             MT, carcass weight

                                                         

  Year            2003               2004                \% Change

  Jan             1660               1474                -11%

  Feb             1629               1497                -8%

  Mar             1507               1440                -4%

  Apr             1506               1475                -2%

  May             1569               1540                -2%

  Jun             1484               1609                8%

  Jul             1342                                   

  Aug             1289                                   

  Sep             1302                                   

  Oct             1297                                   

  Nov             1261                                   

  Dec             1333                                   

                                                         

  Exchange Rate   Official monthly   Local Currency/US   
                  ave                \$                  
  --------------- ------------------ ------------------- ------------------

*Note: Ex-factory prices, VAT not included.*

## Prices Table 

  --------------- ------------------- ------------------- -----------------
  **Country**     Romania                                 

  **Commodity**   Meat, Swine                             

  Prices in       US\$                per uom             MT, carcass
                                                          weight

                                                          

  Year            2003                2004                \% Change

  Jan             1658                1627                -2%

  Feb             1655                1715                4%

  Mar             1497                1624                8%

  Apr             1486                1770                19%

  May             1526                2014                32%

  Jun             1514                2085                38%

  Jul             1646                                    

  Aug             1757                                    

  Sep             1775                                    

  Oct             1840                                    

  Nov             1759                                    

  Dec             1515                                    

                                                          

  Exchange Rate   Official monthly    Local Currency/US   
                  ave                 \$                  
  --------------- ------------------- ------------------- -----------------

*Note: Ex-factory prices, VAT not included.*

[^1]: By processing units, those plants without own slaughtering line
    are meant.