Agribusiness is one of North Macedonia’s most promising sectors. Agribusiness (including agriculture, forestry, and fisheries) accounted for 7.1 percent of GDP (2021 data), 9 percent of total trade (2022 data), and 10 percent of the total number of persons employed in the country (2022 data). Exports of agricultural and food products in 2022 constituted 8.6 percent of North Macedonia’s total exports, and 9.4 percent of total imports. The top markets for agriculture and food products are the EU (50.5 percent of total exports) and CEFTA countries (32 percent). The main exported agricultural products from North Macedonia are tobacco, wine, fresh and canned vegetables, fruits, and lamb meat. The EU also provides 45.6 percent of North Macedonia’s total agriculture imports. The main imported agricultural products are raw meat, milk and dairy products, grains, sunflower oil, fruits and vegetables, and processed foods.
North Macedonia-U.S. trade in agricultural products decreased from $37.2 million in 2021 to $30.5 million in 2022. Compared to 2020, the U.S. share of North Macedonia’s agricultural imports decreased by 0.49 percent to 1.03 percent of total imports, while the share of North Macedonia’s agricultural exports to the United States slightly decreased from 3.9 to 3.7 percent. Tobacco remained the largest export product to the United States (11 percent of the total tobacco exports), while nuts were the top import product.
Food and beverage processing are significant industries in North Macedonia, as well as fresh fruit and vegetable processing. Processed foods include both semi-finished products (frozen, dried, and concentrates) and finished products (canned and preserved). Over 75 percent of processed foods are exported, mostly to the EU and neighboring countries. Most food-processing facilities are private companies.
The National Strategy for Agriculture and Rural Development 2021 – 2027 aims to strengthen the ability of North Macedonia’s agricultural sector to compete in the EU and other regional markets and to promote sustainable and balanced rural development, while retaining the youth population through creating better living conditions. The key strategic goals are to improve competitiveness, economic sustainability, and incomes by improving food supply security and strengthening the sector’s market orientation. The Strategy also focuses on technology and digitalization, the application of sustainable environmental practices to mitigate and adapt to climate change and attracting young farmers. Consequently, the total agriculture budget (including financial support to agricultural development and subsidies to farmers) has increased from $49.3 million in 2007 to $211 million in 2022, accounting for approximately 3.14 percent of the national budget. Approximately, 4.9 percent of the agriculture budget ($106 million in 2021) is used for support and direct payments for agriculture production and rural development. The biggest problem for farming in North Macedonia is the division of land. Most parcels are very small and fragmented, with over 55 percent of parcels consisting of two to five hectares. Only 0.14 percent have 50 hectares or more.
| Market Size Term | 2018 | 2019 | 2020 | 2021 | 2022 (ag only) |
| Total Local Production | n/a | ||||
| Total Exports | 613.43 ml$ | 696 ml$ | 647 ml$ | 700 ml$ | 392 ml$ |
| Total Imports | 890 ml$ | 933 ml$ | 894 ml$ | 1.05 bl$ | 557ml$ |
Imports from the US
| 9.4 ml$ | 10.8 ml$ | 15.3 ml$ | 10.8 ml$ | 10 mil$ |
| Total Market Size | n/a | n/a | n/a | n/a | n/a |
| Exchange Rates | 54.6 | 55 | 50 | 55 | 56 |
(Total market size = (total local production + imports) - exports)
Leading Sub-Sectors
Wine production: The production of wine together with viticulture contributes 17-20 percent of the gross agricultural product in North Macedonia. In addition, wine ranks first in terms of exports of alcoholic beverages, and second, after tobacco, in terms of overall export value of agricultural products. North Macedonia has nearly 30,000 hectares of vineyards, of which 85 percent grow wine grapes and the rest grow table grapes. Total wine production is between 1 and 1.1 million hectoliters (hl) of wine annually for 81 wineries, and approximately 1 million hectoliters of beer, mostly for domestic consumption. With more than 85 percent sold on the foreign market, wine is a strategic export for the country. Approximately 65 percent of wine exports are in bulk, and 35 percent are bottled. Changes in the Law on Wine in 2019 relaxed registration requirements in the Register of Wine Producers for small/family wineries, and it is expected the number of such wineries will increase. In 2022 total wine exports reached 665.500 hl (approximately 60 percent of total production), with a decrease of 3.4 percent by volume and increase of 18 percent in value compared to 2021. Main export markets are the EU and Western Balkan countries, with some exports to China, Canada, Japan, and the United States. Export opportunities exist for U.S. companies for equipment that will increase the volume of wine bottled in North Macedonia and technology and supplies to stimulate production of new grape varieties and modernizing vineyards. In September 2023, the Government adopted a ten-year National Strategy for the Development of Winemaking and Viticulture (2023-2033), and outlines as key priorities modernizing the sector, increasing exports of North Macedonia’s wine, developing wine tourism and measures to protect against climate change to ensure sustainability and biodiversity conservation in vineyards.
Tobacco production: Tobacco is the most important agricultural export product, which accounts for almost one third of the value of the total export of agri-food products (28.7 percent). Tobacco was the top industrial crop again in 2022, planted on almost 80 percent of the total area for industrial crops. Nearly all raw tobacco production is contracted by multinational companies through registered branches in the country and exported as fermented tobacco. The largest export market is the EU, followed by the United States, Indonesia, and Russia.
Organic production: Organic farming is an area for development. Over the past three years the size of arable land certified for organic production has increased as a result of an increase in government support for the sector. In 2022, there were 913 registered small scale organic agricultural production entities in the country producing an area of 4,815 hectares under organic production. Organic farms produce primarily meat and dairy (lamb, sheep, and goat dairy products), honey, cereals, industrial oil crops, wine, fruits, and vegetables. The Government was co-financing costs of certifying organic production by 50 percent.
Fresh fruit and vegetable production: Fresh fruit and vegetable production comprises 45.8 percent of agriculture output in the country and is export oriented. Crop production is concentrated in the southern and eastern parts of the country, due to the favorable climate. Over 75 percent of vegetable production is in open fields, 20 percent in plastic tunnels, and the rest in glass greenhouses. Top vegetable crops are potatoes, peppers, and tomatoes, while top fruit crops are apples, plums, peaches, and pears.
Preserved fruits and vegetables: The food processing industry in North Macedonia consists of 50 companies with a processing capacity of approximately 180,000 tons of fruits and vegetables per year. The most significant raw materials are red peppers, industrial tomatoes, sour cherries, apples, and plums. The low amount of food processing in North Macedonia is due to issues with quality and consistency of the supply of raw materials, as well as a lack of supplier sophistication, lack of skilled workers, and difficulty accessing financing.
Opportunities
U.S. food exporters should focus on establishing their business relationships with reliable and efficient importers and distributors, with access to appropriate distribution and sales channels.
The Government of North Macedonia considers agriculture a target area for future investment, growth, and development, including increased foreign direct investment. Although the Government provided significant financial support to farmers over the past ten years, the lack of modern equipment and investment in processing facilities remains a key weakness of the agriculture sector. The Government was also considering introducing legislation that would promote farmland consolidation more suitable for use of agriculture machinery and implement it as an effective tool for increasing agriculture output. Domestic production of agricultural machinery is minimal, and the market relies on imports. There are substantial agribusiness opportunities for U.S. companies which provide equipment that will add value to the food processing sector, such as bottling, packaging, and refining equipment. Experts have also identified problems in waste treatment and disposal, hygiene, and meeting environmental standards.
North Macedonia is a net importer of meat, as it has insufficient meat production (except for pork), and the number of farm animals continues to decrease. North Macedonia meets over 50 percent of its meat consumption (meat and processed meat) through imports. The poultry industry is focused on egg production. There is a surplus of eggs, but poultry meat production is insufficient to satisfy the local fresh meat market. The domestic pork industry satisfies almost 90 percent of the market for fresh meat, while all meat processing industries cover their needs from imports. There is a significant lack of beef, as most of the cattle in the country are dairy cows. Lamb meat is the only net exported livestock products. Around 85 percent of North Macedonia’s lamb production is exported to EU countries, mainly to Greece, Croatia, and Italy around Christmas and Easter.
North Macedonia also imports most of its grain. There is insufficient domestic production of corn to meet domestic consumption. The country imports one-third of its wheat annually. There is no production of soybeans; most soybean meal is purchased from Serbia and Hungary by large farms and concentrated producers, and U.S.-origin soybean meal comes through Greece and Bulgaria. Higher protein meal is in demand, but the market is highly price sensitive. In 2013 North Macedonia changed its legislation to prevent use of genetically engineered commodities in animal feed and for human consumption. The Embassy has worked closely with the authorities to change the legislation and open the market in 2023.
Resources
https://www.mzsv.gov.mk/