Hungary's import restriction on Ukrainian agriculture imports

Hungary unilaterally reinstates import restrictions on imports from Ukraine

The Late last Friday, the government in Budapest put into place the import restrictions on Ukrainian agriculture products that it had promised that it would reintroduce should the Commission not extend the EU’s own import restriction policy. With this, Hungary has put back into force the ban on the import of products on the 24-item import restriction list that it had unilaterally introduced in the spring and later, following the EU’s import restrictions, it repealed in the summer.

Minister for Agriculture István Nagy had previously communicated that „if Brussels does not act, Hungary would extend the import ban on the national level.” On Friday, September 15, the last day that the EU’s import restriction was in force, the European Commission did not extend the measure further and in turn, Friday night the Hungarian government had introduced Governmental Decree 430/2023 (IX. 15.) which brought back into force the import restriction of Ukrainian agriculture products with the exception of transit purposes (and in some cases, with the exception of sowing seeds).

Following the introduction of the Hungarian import restrictions and similar measures put into place by Poland and Slovakia, Ukraine filed a WTO trade complaint, reports Reuters. According to the news agency, Ukraine appealed to its EU neighbors to “embark on constructive dialogue” to end the dispute and find a “compromise scenario”.

A WTO spokesperson confirmed to Reuters that the organization has received a request for consultation on Monday evening.

Ukrainian Prime Minister Denys Shmyhal later confirmed on Telegram that Ukraine would impose retaliatory import restrictions on certain goods from Poland and Hungary.

The news portal Agrárszektor.hu has published an article this week reporting on the opinions of stakeholders from the crop farming industry on Hungary’s import restrictions. The portal’s sources agreed that the unilateral import restrictions by three of the four Visegrad member states – Poland, Slovakia and Hungary – will cause a legal conflict between them and the EU. These sources also said to the portal that this is still a preferable option to the three Member States, which are now trying to buy time with their import restrictions until the market situation improves. The article also mentions that Russian exports are even more dominant on the grain market than Ukrainian ones and that the effects of the Black Sea grain trade and the surge of grain exports can even be felt even in the United States grain market.

Here is the list of products that fall under the measure:

Customs Tariff Number	Product Description
0201	Fresh or Chilled Beef
0202	Frozen Beef
0203	Fresh, Chilled, or Frozen Pork
0204	Fresh, Chilled, or Frozen Sheep or Goat Meat
ex 0207	Poultry meat suitable for human consumption of the Gallus domesticus species, including cutting by-products and offal, fresh, chilled, or frozen
0407	Bird eggs in shell, fresh, preserved, or cooked
0409	Natural Honey
0710	Vegetables (raw, steamed, or boiled in water), frozen
ex 1001 99 00	Common Wheat
1002	Rye
1003	Barley
1005 90 00	Maize (Corn)
1008	Millet, Sorghum, and Canary Seed; Other Cereals
1101	Wheat Flour or Meslin Flour
1102	Cereal Flour (excluding Wheat or Meslin Flour)
1104	Processed Cereal Grains (e.g., hulled, flattened, flaked, polished, sliced, or coarsely ground); Whole, Flattened, Flaked, or Ground Cereal Groats and Meal, except rice falling under 1006 HS code
1205 10 90; 1205 90	Rape or Colza Seeds, Whether or Not Broken (except for seeds used for sowing)
1206 00 91; 1206 00 99	Sunflower Seeds, Whether or Not Broken
1512	Sunflower Seed, Safflower Seed, and Cottonseed Oil, and Their Fractions, Refined but Not Chemically Modified
1514	Rapeseed and Mustard Oil, and Their Fractions, Refined but Not Chemically Modified
1701	Cane or Beet Sugar and Chemically Pure Sucrose in Solid Form
1905 10 00	Crispbread
2005	Vegetables (excluding sugared) prepared or preserved without vinegar or acetic acid (excluding tomatoes and edible mushrooms), not frozen
2204	Wine made from fresh grapes, including fortified wine; grape must (excluding grape juice), and except vinegar falling under 2209 HS code

Number of agriculture producers declined by 19% in three years

The Central Statistical Office (KSH) has published new figures which show that since 2020, the number of agriculture producers has decreased to 196 thousand, which is a decline of 19%. An official from the statistical office, Péter Tóth revealed these figures in a press conference recently where the details of a new study on the main statistical trends of the Hungarian agriculture industry was presented.

Mr. Tóth has commented that this trend is not unique since the number of agriculture producers is constantly declining in EU member states.

In Hungary, the number of farms under one hectare have decreased by half between 2020 and 2023, while the number of farms exceeding a thousand hectares have decreased by 20%. The structure of the agriculture industry is also shifting as the share of crop growers is increasing, currently resting at 73%, while the share of the animal husbandry is shrinking, currently at 14%. Mr. Tóth has also added that similarly to Hungary, in Bulgaria and Romania the number of crop growers in agriculture is higher. Meanwhile, in the Netherlands, Luxembourg and Ireland, the balance tilts towards animal husbandry.

KSH’s new report also highlights the greatest challenges each category faced in the past years. Crop farmers mostly struggled with high energy prices and the 2022 drought. The animal husbandry sectors, meanwhile, had issues with handling livestock diseases as well as high feed prices.

Hungary continues to be EU’s third-largest sour cherry producer

TradeMagazin.hu reports that with an annual harvest of 60 thousand tons, Hungary is still the EU’s third-largest producer of sour cherries. While the populace consumes around 10-15 thousand tons of the fruit annually, canning is also popular. The magazine reports that Hungarian sour cherry is „uniquely flavorful” and of high-quality, which makes it sought-after in the common market.

Most of the country’s sour cherry harvest, around 60-80%, is exported. Both in Hungary and abroad, the majority of Hungarian sour cherries are used by the food processing industry in frozen products, fruit juice production, canning, but the alcohol industry also uses it in the distillation of sour cherry pálinka.

West Nile Fever identified in horse carcasses

The National Food Chain Safety Office (NÉBIH) has recently reported that since the middle of August, the West Nile virus, the cause of the disease West Nile Fever, has been identified in twelve horse carcasses and the carcass of a stork.

The authority also reports that based on observations of the life cycle of carrier mosquitos, the primary disease vector, West Nile Fever can be expected to be present in the country until late in the fall.

West Nile Fever is a zoonotic viral disease spread by mosquitos. Migrating birds are often hosts to the virus, which is in turn spread by mosquito bites. West Nile Fever can affect both wild animals and livestock as well as the human population, direct transmission between animals and humans is impossible however. Upon the discovery of the presence of the disease in the country, authorities are obligated to report the case to the World Organization for Animal Health.

In most cases, people who contract West Nile Fever do not develop symptoms. However, in 20% of the cases, the disease can lead to symptoms such as fever, headache, rash and vomiting. In rare cases, encephalitis or meningitis as well as neurological symptoms can occur.

Hungary’s paprika export at net positive trade balance

The National Chamber of Agriculture (NAK) reported recently that even though in quantity, Hungary imports twice as much paprika spice as it exports, the high-quality produce that growers export has high added value, leading to a net positive trade balance.

The NAK report also states that in recent years, the area under paprika declined. The cultivated area has actually almost halved in five years, decreasing from 1,739 hectares in 2018 to less than 1,000 hectares in 2023 (950 ha). One reason for this is that compared to the economically viable yield of 20-30 tons per hectare, the average yield has been around 8-9 tons in recent years. This means that even with contracted prices, production is not always economically viable for most non-intensive cultivation producers.

The production costs of paprika spice have roughly doubled over the past decade, with nearly half of the expenses being attributed to harvesting while weed control also proves to be costly. Challenges arising from climate change, such as dramatic temperature fluctuations between day and night and sunburn caused by high levels of UV radiation pose considerable stress on the plants and affect harvest yields. Furthermore, the increasingly common monsoon-like rainfall patterns also cause significant damage, reprots NAK.