Chair of National Association of Grain Producers: Rising Fuel Prices Are Increasing Costs By Up to €10 per Decare for Wheat

Rising fuel prices are increasing costs by up to €10 per decare for wheat production, the chairman of the National Association of Grain Producers said on the BNT's morning programme “The Day Begins” on April 22.

Iliya Prodanov explained that the increase in fuel prices due to the war in the Middle East is having a direct impact on production.

“When we talk about agricultural production in our sector, around 12 to 15 per cent of the cost of our output is determined by fuel. Given the increase we have seen at the moment—around 60 euro cents over the last month to month and a half—the direct impact on production costs is about €6 per decare.”

The chairman of the association rejected claims that farmers use unregulated fuel.

“That is absolutely untrue. Agricultural producers in Bulgaria benefit from an excise duty refund, and fuel is something where it is absurd for anyone to think the figures could be inaccurate.”

He explained that they do not use filling stations with lower prices and pay the same price for fuel as every Bulgarian citizen, only receiving the excise refund—around 70 per cent—after a year and a half. In this regard, he said they are insisting that it be increased to the maximum allowable level of 95 per cent, as in Europe.

Prodanov noted that the war in Iran is having an even more serious effect through rising raw material prices. Fertiliser prices have increased sharply.

“Dramatically—perhaps by around 100 per cent over the past 30 days—as has everything related to petroleum products. I will give an example with irrigation pipes—there has been an 80 per cent increase in irrigation pipes over 30 days. So the effect of the war is truly being felt in our sector.”

He added that the sector is calculating the effects of the war.

"Steeply - maybe about 100% increase already in 30 days, as well as everything related to oil products. I'll give the example of irrigation pipes - 80% is the increase in irrigation pipes in 30 days. So the effect of the war is really being felt in our sector."

He clarified that the sector is making estimates of what the effects of the war are.

“What we are saying is that the effect of the war has directly increased our production costs by around €10 per decare for wheat. Unlike the war in Ukraine, which also increased our costs, during the war in Ukraine there was a significant rise in the prices of our final products. At the moment, the prices of our final products are at a 17-year low because the world is producing more than it consumes. And that is an extremely serious fundamental problem for our sector. Bulgaria must find a solution over the next few years for what to do with this grain—what happens to it—so it can be sold at prices that cover costs, because producers in Bulgaria are not covering their production costs. We are simply producing wheat, circulating money, and nothing remains in our economy.”

According to him, one of the main problems remains the lack of sustainable solutions from the state.