Will Hungary run out of potatoes?

Prices greatly influence Hungarians’ eating habits

Krisztina Bodnár, a business development manager at GfK, has recently published an article about their latest study on the nutritional habits of Hungarians on the portal TradeMagazin.hu.

According to the study, awareness has been on the rise in recent years, but now, due to inflation, prices are the determining factor. Slightly over one-third of households are indifferent to the health aspect of their groceries, which marks a 5 percentage point increase since 2021.

Out of every ten households, only one is buying groceries with health consciousness in mind. The proportion of those who "always save leftovers and never throw anything away" has increased from 67% to 69%. Interest in nutrition and nutrients has declined, dropping from 41% in 2021 to 37%. Additionally, the enthusiasm for trying new things has waned, with only 35% now willing to experiment, compared to 39% previously. There is also a decrease in the number of people who "make an effort to consume seasonal vegetables and fruits" and a significant drop in the percentage of those who "frequently buy fresh products instead of canned or frozen items" since 2021.

Inflation also affects vegetable consumption

A farmers’ Collective, DélKerTÉSZ, which has 500 horticultural producer members from near Szentes, Csongrád-Csanád County, South Hungary, has recently reported on the sales figure changes they observed in consumption in the past year. According to the farmers, due to inflation, consumers are opting for sales promotion vegetable items, purchasing less and less at regular prices. According to the collective, there is a “psychological threshold” in profitability when reducing sales prices, “until production becomes unviable.” This is particularly true for horticultural production which involves heated greenhouses. Members of the collective have sold 56 thousand tons of vegetables in the first 9 months of the year. Out of this, 25 thousand tons were fresh produce and 31 thousand tons were industrial crops.

Food prices to remain high in 2024

The agriculture news portal Agrárszektor.hu published an interview with Hungary’s leading agro-food economist, György Raskó. Mr. Raskó told the portal that although the increase of prices has considerably slowed in the past months, consumption habits are already affected, with consumers buying much less of high-quality food products. Mr. Raskó also said that bread prices actually are not expected to rise further, and that the high prices will not be sustainable as consumption is already falling. One important factor is that previously cheap products saw the highest levels of price increase in the past period.

On production costs in the agro-economy, Mr. Raskó told the portal that price pressure from the side of agricultural commodities is not currently expected, however, the prices of energy, labor and overhead costs will lead to further price increases. The economist also highlighted that since pork prices rose throughout Europe in the past period, this will probably influence Hungarian ones as well. Sugar prices are also increasing, the demand for sugar is falling however.

Mr. Raskó said that by spring, the food inflation rate can be expected to not surpass 5-6%. After last year’s high inflation, the country’s inflation can be expected to be around 9% in December, added the economist, which will probably translate into a food inflation level of around 15%.

Fertilizer trend turned around in the summer

The latest market figures from the Institute of Agricultural Economics (AKI) show that in Q3, 2023, fertilizer sales in Hungary increased 66% y-o-y, and plant protection material sales increased two and a half times over. In the case of fertilizers, average sales prices decreased by 50%, the sales volume of calcium ammonium nitrate (CAN) tripled, while the sales of urea halved.

For pesticides, prices increased by 3-68% compared to the prices in 2022. Sales of fungicides and herbicides increased due to the rainy weather, while sales of insecticides dropped by more than 50%.

Fall sowing near complete

Agriculture news portals reported this week on the state of agricultural works in Hungary in the fall season. The sowing of winter cereals is close to complete. Farmers report considerable struggles with pests and fertilizer use also increased, which supports the figures of the fertilizer market. Fall rains hindered sowing in some places, like in Fejér County, in Transdanubia, West Hungary, meanwhile droughts hindered soil works in certain parts of the Great Plain. What farmers universally bring up however, is that infestations of field voles continue to plague farmlands, causing sustantive damages.

Potato farming continues to decline

Based on the latest sectoral report by the Institute of Agricultural Economics (AKI), Hungary’s total potato yield further decreased in 2023. In 2022, the country’s total potato harvest had decreased by 17% y-o-y, to 199.2 thousand tons, in 2023, the total yield was 161.5 thousand tons, while the total farming area was 5,83 thousand hectares.

The portal Agrárszektor.hu also reported on the issue. According to the agriculture news portal, the reasons for the country’s declining potato sector are economical: High labor costs, issues with irrigation, a lack of effective plant protection agents, and unpredictable demand on the market which makes the farming of seed potatoes hard.

The import of potatoes also fell however, in January-August 2023, the amount of imported potatoes decreased by 13%, to 38,2 thousand tons. France remains the largest trade partner, even with a 22% decrease, with an export of 21,2 thousand tons to the Hungarian market. The Netherlands is the second largest exporter to the market in Hungary, with 5,55 thousand tons in 2023, which is 18% lower than previously. Hungary’s potato export also fell, by 28%, to 2,73 thousand tons. The price of potatoes went up in Hungary in 2023. In Week 45, the price of potatoes on the Budapest Commodity Market was €1.85 per kilogram, which is a 45% increase y-o-y.

Environmentalist NGOs test degradable shopping bags

Greenpeace Hungary, together with another NGO, Humusz Szövetség, have tested how long it takes for degradable shopping bags from large grocery store chains – ALDI, Auchan, Spar, Tesco – to be broken down and turned into hummus. The field test found that the mean degradation time was 6 months. The organizations warned however, that degradable plastics themselves will not solve the resource and waste crisis, since shopping bags made from degradable plastic can still contain harmful materials and can still cause microplastic pollution. Furthermore, the proper composting of these bags is not something that the majority of the population would be able to do.

Since most shoppers don’t have composters at home, these bags either end up in the trash, where they cannot be further utilized, or selectively recycled, in which case they can contaminate reusable plastic waste.

Since the selective recycling of biological waste is an EU level regulation, Greenpeace says that Hungary will probably have its own national regulative framework for it next year, however, the details of this are not clear at the moment.

Greenpeace: Contamination of the River Danube continues

Greenpeace Hungary also reported this week that they identified “severe contamination” in the mud on the riverside of the Danube near the decommissioned Óbuda Gas Works industrial site in Óbuda, in Budapest. The organization reports that they investigated and sampled the mud at the riverside as well as the groundwater seeping into the river near the decommissioned industrial complex. Their samples contained carcinogenic arsenic, benzene, as well as toxic polycyclic aromatic hydrocarbons “at levels significantly exceeding the permissible threshold, maybe even a hundred- or thousandfold”. The organization first investigated the Danube riverside near the closed-down Óbuda Gas Works in 2018, and they reported at that time on the contamination. Aside from the above-mentioned chemicals, the organization also found various other chemicals which exceeded the permissible levels, including naphthalene which is harmful for human health, neurotoxic xylenes, and one of the samples also had cyanide at higher levels than permissible.