Hungary takes over EU Council presidency

Hungary takes over presidency of the Council of the EU

On Monday, July 1, Hungary took over the rotating Presidency of the Council of the European Union from Belgium. The news agency MTI reported that according to Minister for European Union Affairs János Bóka, approximately 1,500 working group meetings are planned, with around 230 events to be held in Hungary during the presidency, including 16 informal council meetings. The informal meeting of the European Council and the EU summit will be held in Budapest in November. In Brussels and Luxembourg, 37 formal council meetings are expected. The Hungarian Presidency furthermore aims to organize an EU-Western Balkans summit, as well as a Gulf Cooperation forum and high-level meeting.

Agriculture is one of the listed priorities of the Hungarian presidency, which will end on December 31, focusing on proposals for the post-2027 Common Agricultural Policy. Minister for Agriculture István Nagy has stated in Luxemburg in late June that they are aiming to ensure that agriculture becomes one of the most important policies of the EU in the years to come. “Hungary aims to achieve that the future of agriculture be crisis-resistant, competitive, sustainable, farmer-centered, and knowledge-based,” the minister stated. These topics will also be addressed during the informal meeting of Agricultural and Fisheries  ministers of the EU Member States, taking place from September 8-10 in Budapest.

Weather hurts summer harvest of wheat, favors sunflower and maize wherever rain reaches

The last week of June brought summer thunderstorms and torrential rain to various regions in Hungary. This, in many cases, hindered the ongoing harvest of winter and spring crops like wheat and rapeseed. Summer crops however, like sunflowers and maize, could use the extra rain. According to HungaroMet Zrt.’s report, in the last week, 10 to 70 mm rain fell in the country, with much regional variance.

Even still, in the beginning of July, dry weather returned to Hungary. The summer crops are now entering their flowering period. The top layers of the soil fortunately have large quantities of moisture stored.

Both natural vegetation, as well as planted crops, are two to three weeks ahead in development due to the hot weather.

Harvest yields lower than expected across the board

Hungary will have a mediocre wheat harvest this season, confirmed the Cereal Producers Alliance (GOSZ), reported Agrárágazat.hu this week. The quality is also lower this year. Zoltán Lakatos, a chief official of the industrial alliance commented that the gluten content is lower than last year's, but the early varieties arriving at the storage facilities have a good weight per hectoliter and adequate protein content, which could mean that they will produce grade B baking flour.

On Wednesday, the Ministry of Agriculture issued a press release, stating that harvest is underway on 1.8 million hectares of farmland.

Winter barley is now three-quarters harvested, and at a yield rate of 5.5 tons per hectare, the country’s barley harvest can be expected to be 2 million tons. It was also pointed out that barley has a high percentage of fallen stocks and the recent rainy period has seen a wider spread of plant diseases.

Rapeseed crops are generally in good condition, with an expected yield of around 600 thousand tons on 189 thousand hectares this year. Wheat, in total, has a production area of 1 million hectares this year, and the harvest is expected at 5.5 million tons.

Poverty permeates society

A new study based on a recent survey by the think tank Egyensúly Intézet shows that the economic hardships of the recent years have really affected the Hungarian populace – And the rate of poverty is high. The study is part of the organization’s “Poverty research” series.

Out of the survey’s responders, 43% had a monthly income less than about €630 after taxes, which is “not even sufficient for modest living.” Around one-third (31%) of the responders have a monthly income of €630-€1010 after taxes, which means that 76% of the responders were under the mean income level.

In a country of 9.64 million, one quarter to one third of the population, 2.5–3 million citizens can be considered poor according to the study. A significant portion of the population would have their lives disrupted by an unexpected expense of €250.

The income structure of Hungarian society started to show slow but steady improvement compared to mid-2023. By the spring of 2024, the number of people who fall into or above the income bracket considered average increased by 11 percentage points to 24%.

However, there are still many who have to go without in some respects. About half of society has seen their income lose purchasing power, due to price increases and new expenses, however, 29% of responders reported income decrease – Either their own or their partner’s.

In total, two-thirds of Hungarian households (64%) are only able to finance their daily expenses with varying degrees of effort.

Every fifth Hungarian had to give up heating, meals or medical treatment in the recent past, 17% had to move in with friends or family, 15% had to rely on charity organizations. 8% of Hungarian parents couldn’t cover their children’s basic needs.

One-third of Hungarians have asked for financial help from friends or family, and one-third of parents did not eat enough themselves in order to be able to feed their child.

Dangerous exotic tick spreading in Hungary

Naphíre.hu reported in the end of June that the “horror tick,” Hyalomma marginatum has been identified in multiple counties. The exotic tick is responsible for the spreading of the Crimean-Congo hemorrhagic fever virus. The first specimen in Hungary was identified in 2009, on a hedgehog on Margaret Island in Budapest. In 2021, out of 97 reports, 2 were identified to be Hyalomma marginatum, and in 2022, the number of cases increased to 9. The portal Kullancsfigyelő (Tick Observer), which relies on citizen sightings, reported that during a study, blood samples from volunteers were examined, and out of 2700, the antibody was found in 10 samples in Hungary.

On the public portal Kullancsfigyelő.hu, there is more information on the exotic ticks. Hyalomma marginatum and Hyalomma rufipes have become known primarily due to their role in the European transmission of Nairoviruses, which cause Crimean-Congo hemorrhagic fever, the portal highlights. We have previously reported on Hyaloma sightings.

Hyaloma marginatum is not the only Hyaloma tick that arrived in Hungary in the past years due to climate change. In 2023, a group of Hyaloma rufipes, capable of reproducing in Hungary, was identified on birds at Lake Balaton.

Mandatory sales promotion ends

As of July 1, 2024, the government has lifted the mandatory sales discounting regulation for grocery stores, which was introduced on June 1, 2023, to curb price increases. The measure was introduced to replace the government’s food price cap policy.

According to Trademagazin.hu, agriculture economist György Raskó stated that since the introduction of the mandatory sales discounts, a dual effect has been observed: prices decreased in stores subject to mandatory sales, while significant price increases occurred elsewhere. The measure greatly disturbed the market because it was difficult to determine the direction of inflation due to regulations affecting various products and retail chains.

The expert believes that abolishing mandatory sales will actually not impact domestic food prices and retail trade much. The market has moved independently of government regulations so far, and due to weak purchasing power, retailers have already been offering larger discounts than those mandated by the government. Discount chains like Lidl and Aldi have achieved significant profits through larger sales, while Hungarian-owned chains and independent stores have lost market share.

Food, beverage, tobacco exports down, imports up

The latest report on the country’s foreign trade by the Central Statistical Office (KSH) shows that Hungary’s exports were worth €12.5 billion, and imports were €10.8 billion in April, showing a y-o-y increase of 13% for export volume and 2.5% increase for import volume. The m-o-m change between March and April was 1.2% decrease in exports and 1.8% decrease in imports.

The value of exports increased by 9.2% y-o-y, the value of imports decreased by 2.9% y-o-y.

The volume of food, drink, and tobacco exports increased by 35%, while imports increased by 10%. The increase in volume in exports was due to trends in the trading of cereal and cereal products, the increase in volume in imports was due to the importing of fruits and vegetables.

The volume change realized by the commodity group boosted the growth of the total export turnover by 2.4 percentage points, while it increased the rate of import growth by 0.6 percentage points.

Opportunities for Hungarian food export outside the European market

Agrárszektor.hu interviewed Gergely Giczi, deputy managing director at the organization Agriculture Marketing Center. The expert stated that Europe is “losing from its share in the global market, its weight is decreasing,” and that Hungary must increase its share of export into countries outside Europe.

According to Mr. Giczi, 95% of the Hungarian food export goes to other EU member states, primarily, Germany, Italy, Romania, Austria and Slovakia. 42% of the export volume is highly processed products, but the goal is to increase this to 50% by 2030.

Mr. Giczi told the portal that he Hungarian food industry is “on the brink of a historic period,” as there is a dedicated €1.91 billion allocated for the development of the food industry. Assuming a support intensity of 50%, this amounts to €3.81 billion by the end of 2029.

“The primary goals are value enhancement, technology development, and efficiency improvement, as we face both significant tasks and also, opportunities in the field of exports. The quantitative and qualitative surpluses resulting from these developments will primarily need to be sold in export markets. To achieve this, we have developed and tailored our export-promoting portfolio called the Hungarian Food Business Program,” Mr. Giczi told the portal.

In 2023, the total export of the Hungarian agriculture-food industrial complex amounted to approximately €13.3 billion, while imports were €9.8 billion. The resulting surplus of €3.5 billion contributed about 35% to the total surplus of Hungarian foreign trade, said the expert. The Hungarian food export is Europe-centered, the expert added, and aside from the top target countries, major trading partners include Poland, the Netherlands, Croatia, France and the UK.