Hungary moves to enforce strict quality control on grain from Ukraine

The Ministry announces strict food chain safety control on Ukrainian grain; retail trade declines further; business leaders expect slower economic growth; farmers saving on pesticides and fertilizers; Avian influenza spreads - Our weekly briefing on agriculture, food and nature news in Hungary.

Corn plants with ears of corn on the cob.
Beeld: ©Franz W.

Strict enforcement of food chain safety measures will be imposed by the government on Ukrainian grain imports

Minister of Agriculture István Nagy has ordered very strict food chain safety quality controls to be enforced on grain imported from Ukraine, reports a press release on the website of the Ministry of Agriculture.

The Ministry further states: ‘All assistance will be provided in the transport of grain to its original destination, countries in Africa and the Middle East. However, grain imported to the Hungarian market will be subjected to every food chain safety regulation and quality control will be strict.’

The Minister also commented that it is not a coincidence that Hungary, Poland, Czechia, Slovakia, Romania and Bulgaria turned to the European Commission requesting immediate action for the halting of the grain import from Ukraine. According to István Nagy, the grain that comes from Ukraine is produced in accordance with much more lenient farming regulations, and it depresses cereal prices, creating a serious competitive disadvantage for the countries neighboring Ukraine.

The Minister further added that Brussels isn’t helping, and that the Hungarian government will protect Hungarian farmers. The press release also quotes the Minister saying: ‘Again and again it is proven that Hungarian farmers can only count on the Hungarian government.’

Retail trade further declines in Hungary

According to the latest figures by the country’s Central Statistical Office (KSH), domestic retail trade in Hungary has further declined in December, by 3.9% (adjusted), y-o-y.

Out of all retail commerce, grocery and general food retail drove the trend with an overall 8.3% y-o-y decline. In all non-food-related segments, the decrease was 0.4%. The sales of automotive fuel declined by 1.3% (adjusted).

Further data shows the effect of Hungary’s shocking food inflation on grocery trade. 78% Of the grocery retail business sector is made up of “mixed food grocery stores” in the statistical data. Sales in this category fell by 11%, while sales figures in the adjacent “food, beverages, and tobacco shops” did not change, showing that it is really the decrease in the demand for food that is driving the decline of grocery trade in Hungary.

Mixed food grocery stores make up 48% of all retail commerce in Hungary, while non-food categories account for 38% of the industry and 12% is covered by the commerce of automotive fuel.

Farmers reduce costs by cutting back on fertilizers and plant protection agents

Agrá reports that in Q4, 2022, fertilizer sales in the Hungarian agriculture industry had fallen by 40% y-o-y.

The largest decreases were observed in the cases of ammonium nitrate (AN), potassium chloride and monoammonium phosphate (MAP). Demand for AN fell by about 20%, and by a combined 70% for potassium chloride and MAP. Farmers also bought 20% less of lime ammonium nitrate (MAS).

Sales of urea (carbamide) nearly doubled however, while Nitrosol DAM sold 28% more than in the same period in 2021. Sales prices were 1.6 to 2.7 times higher than they were in Q4, 2021.

Because plant protection agents were on average 20-40% more expensive, the demand for them also declined by 28%. Compared to October, 2021, the sales of herbicides declined by 62%, those of insecticides by 58% and fungicides by 8%.

Most Hungarian CEOs expect slowing economic growth reports that according to the latest CEO survey by PwC, the majority of Hungarian business heads expect a slowing in the global economy and the economy of Hungary in 2023. Business leaders also think that the economy of the country is more fragile than the global economy. 85% expect GDP growth to slow in Hungary.

CEOs believe that the greatest threats to economic growth are the energy crisis, inflation, and macroeconomic volatility. Most responders (78%) are not planning on decreasing their staff, nor cutting back on salaries (96%). This rate is higher than the world average. CEOs mostly find that the best solution is to raise prices and streamline production costs.

86% Of CEOs think that the war in Ukraine will end in 2024. Due to worries caused by rising geopolitical conflicts, most business heads are considering adjusting their business models. To reduce risks, they are planning to enter new markets, modify supply chains, and invest in data protection and cybersecurity.

Avian influenza spreads to East Hungary reports that Avian influenza has been detected at a duck farm in Hajdúböszörmény, Hajdú-Bihar County in East Hungary, bordering Romania. The farm houses almost 24 thousand heads of breed ducks. The National Food Chain Safety Office (NÉBIH) has confirmed the presence of the H5N1 strain of the disease in the livestock.

Protection and monitoring areas with radiuses of 3 km and 10 km, respectively, have been installed around the site. NÉBIH commented that this case confirms the continuous presence of the virus in Hungary and stressed the importance of compliance with animal welfare regulations.