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NewsMontenegro’s energy export grows amid new infrastructure projects

Montenegro’s energy export grows amid new infrastructure projects

Montenegro’s energy export sector has experienced growth recently, attributed to new infrastructure developments. These investments are enhancing the country’s trade capabilities and underscoring the strategic benefits of upgrading energy infrastructure. According to an ISSP study on regional trade, Montenegro’s advantageous geographic position and expanding renewable energy capacities provide substantial opportunities for the country to become a key player in regional energy markets, as highlighted by Poslovni dnevnik.

Food trade deficit

Between 2018 and 2022, Montenegro’s food imports were on average 16 times higher than its food exports. In 2022, the ratio of food exports to imports in Montenegro was just 6.8%, indicating a significant imbalance, according to the ISSP report, “Regional Trade in Food and Energy – Facts from Montenegro and Western Balkan Countries.”

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The study reveals that Montenegro, along with Kosovo, faces a notable food trade deficit, unlike Serbia, which has a food trade surplus. For instance, during the aforementioned period, Montenegro’s food imports were 16 times greater than its exports, while Kosovo’s were ten times greater. This imbalance stems from the country’s heavy reliance on food imports to meet domestic demand, especially during the tourist season. The ISSP report emphasizes the influence of the tourism sector on food imports, along with structural challenges within the agricultural sector.

Montenegro’s agricultural sector suffers from fragmentation, with small average holdings and limited large-scale production capacity. Permanent crops and arable land make up only 4.8% of the total agricultural area, which restricts productivity.

Energy production and trade dynamics

The analysis of energy production and trade reveals significant regional disparities and vulnerabilities.

From 2018 to 2021, energy production trends varied across the region. Montenegro and North Macedonia saw relatively stable primary energy production with minor fluctuations, while Albania experienced a substantial drop in energy production followed by a recovery in 2021. Kosovo showed consistent annual increases in production, highlighting its growth potential and resilience. Conversely, Serbia and Bosnia and Herzegovina experienced more pronounced fluctuations. The study links these variations in energy trade balance with production trends, noting that no country in the region has achieved net exporter status. Energy export and import growth rates reflect the region’s sensitivity to global market fluctuations and internal factors, such as renewable energy infrastructure investments. Serbia, along with Bosnia and Herzegovina, remains a leading energy exporter, while Montenegro’s energy export has grown recently due to new infrastructure projects. This underscores the impact of infrastructure investments on trade capacities, as reported by the ISSP study.

Import dependence

Dependence on energy imports continues to be a significant issue for Western Balkan countries, indicating their vulnerability to external energy sources.

Serbia and Bosnia and Herzegovina have substantial energy import volumes, revealing that domestic production falls short of meeting their energy needs. Although Montenegro’s import volumes are lower, its dependency remains significant, suggesting potential for increased domestic production, particularly from renewable sources, according to the ISSP study.

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