Hungary: Seed prices moderately increasing
The global cereal price surge has a direct effect on the seed sector - But the situation is complex.
As summer gradually turns into fall, the agro sectors show progression on courses set by multi-annual trends - And seed prices started to increase in Hungary, due to multiple factors that have opposite effects on the price levels.
In a recent interview, the head of the Hungarian alliance of seed producers, Gábor Polgár, explained that “despite the difficulties, the seed sector remained profitable.” According to Mr. Polgár, the prices are now rising but the increase will not exceed 15%, because as opposed to hybrid varieties used in the spring sowing, leftover produce can be used by farmers for the plantation of winter crops.
In recent years, the share of certified seeds has reached around 40% in the stock used in planting in the fall sowing period, and should the prices go considerably higher, this figure will decrease – In which case, the falling demand will break any runaway price increase trend.
There are also factors that might drive up seed prices, however. Input costs continue to increase, mainly the costs of seed propagation and manual labor. Furthermore, with the ever increasing prices of cereal on the open market, seed producers might just go ahead and sell their stock as produce at the commodity market, thereby reducing the seed supply which has an upward impact on the price.
At any rate, Mr. Polgár warned that due to climate change, the decline of open-field vegetable farming, and the potential challenges around complying with the strategic goals of the EU’s Green Deal, cereals remain the dominant crops in Hungary, while the variety of field crops is ever decreasing. Mr. Polgár also added that the way forward is modernization, digitalization, ecological farming, automation and precision agriculture.
The Budapest-Belgrade team brings you curated newsflashes every Friday afternoon. These are quick, digestible, to-the-point briefings about all the latest developments in the Serbian and Hungarian agro sectors.
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