A MARKET INTELLIGENCE BRIEF

FOR

THE AGRIBUSINESS AND FOOD PROCESSING

SECTOR

USAID BUSINESS CONSULTING

SARAJEVO
APRIL 15, 2000
EDWARD REINAUER
IMELIN IMSIROVIC

PREFACE

During the course of this study many separate sources were contacted and
interviewed in an attempt to gather as much current and factual data as
possible. This report endeavors to summarize the information obtained and
present the results in such a manner that the reader can obtain some idea of
where opportunities exist in the agribusiness sector and what are the pit-falls
one should be on the look out for.
The data on imports into the Federation of BiH was obtained from the Customs
and Fiscal Assistance Office (CAFAO) without whose assistance the report would
be based largely upon speculation since the statistical services simply do not
have the resources to provide data on imports on a truck load basis. My thanks
in particular to Mr. Bent Rasmussen for his untiring efforts in sifting through their
database of information on agricultural commodities.
Unfortunately, comparable data is not always available for like time periods in
the Republic of Srpska and the Federation. This makes it difficult to make
comparisons and to arrive at reliable data for a given time period. There are
several instances in the report in which data was not available for one of the
entities and the information is omitted.
Concerning the charts of imports, in many instances it is impossible to determine
the product or the quantity due to the small amount imported from a specific
country relative to some of the larger exporters. There are tables in the Appendix
which tabulate the quantities in kilograms and the value in Deutsche Marks from
every country of loading.
It also should be noted that in many of the categories, a shipment may contain
20 or 30 separate items. Most often the materials are similar, for example, a load
of fruit juice may contain apple juice, ice tea and canned fruits, and wine. Since
no specific quantities were listed, the load may be tabulated as mixed or
other. In other instances, the goods may be totally unrelated, such as canned
tomatoes and machinery. In those instances, the load was deleted from the
tabulation. The data remaining represents more than 20,000 separate truck
loads of agribusiness products.
It is hoped that this information is useful and that not too much detail was lost in
assimilating similar foodstuffs. If nothing more, it should point out the
importance of having good statistical data upon which to base rational business
decisions.
One should also consider that agricultural is not typically a high margin industry.
The further one moves along the line from the basic production to value-added
processing, the higher the margins tend to get. Governments tend to have
policies of cheap food. Furthermore, agricultural prices and thereby profits are
highly cyclical. The longer cycles appear in the livestock industry and grow
shorter as one moves into poultry and vegetable production, i.e, the cycles are
related to the length of time it takes to complete one production cycle. One
would expect that fruit trees that require about 5 years from planting until

economical production to have a relatively long cycle time. Unfortunately, this is

not always the case due to weather conditions.

TABLE OF CONTENTS

EXECUTIVE SUMMARY.
BACKGROUND INFORMATION
Agricultural Natural Resources..
Agricultural Production in BiH vs. Western Europe..
Effects of the War...
Current Situation
Significance to Business Development..
Productive Capacity.
Market Structure..
MEATS AND LIVESTOCK..
Expected Trends.
Export Opportunities.
Import Replacement Opportunities
Strengths.
Constraints.
REGULATORY ISSUES.

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