Hungary Newsflash, Week 26, 2022

80% of Hungarians save on food due to rising prices

The daily Népszava recently reported that 95% of Hungarians started feeling the effects of increasing inflation back in November, 2021, months before the outbreak of the Russian invasion of Ukraine. This is based on a new consumer attitudes survey by Cetelem Bank.

This makes for an interesting contrast with a recent statement by Prime Minister Viktor Orbán who said on the national radio channel that „if the war ends, there will be no more inflation.”

The news portal 444.hu also reported on the survey, concluding that responders found no or very little causality linking Russia’s war in Ukraine to inflation.

According to the survey, four-fifths of all consumers are forced to save on groceries, primarily on food and hygienic products.

65% of all responders said that inflation affected them in a distinctively negative way, 15% said that it was a serious blow. Only 10% said that inflation did not affect their lives in a substantive way.

Land market: Average prices for farmland tripled in eleven years

A recent report by OTP Bank highlights the annual trends in the market of arable lands and farmland. In 2021, land purchase transactions went up by 36% compared to 2020, and the quantity of sold and purchased farmland increased by 22%. Annual price increases continued to be around 7% which means that one hectare of land bought in Hungary in 2010 has tripled in land value by the end of 2021.

The OTP report is based on data obtained from the real estate market database of the National Tax and Customs Administration (NAV), and it projects that inflation might further boost the farmland market in the coming period.

In the past decade, arable land has steadily increased in price. Both during the 2008 world economic crisis, and during the 2019 coronavirus crisis, the farmland market remained resilient in shifting economic environments, adds the report.

“Due to the general strengthening of agriculture, the pandemic did not impact the arable land market substantially. The regulation aimed at eliminating undivided common property, which came into force at the beginning of 2021, has also had a stimulating effect on both the number of sales and the price levels of arable land, which is expected to be completed this year. The inflation that has developed this year may also boost farmland turnover in order to maintain the value stability of savings, and an increase in demand may further drive down prices,” commented István Szabó, general manager of OTP’s agriculture department.

In 2021, the average price of land in Hungary was €4,266 per hectare. There is a high variance among individual prices. The lowest price was in Bátorterenye, in Nógrád, Northern Hungary, with €1,160/ha, while the highest prices were recorded in Balatonfüred, Veszprém county, Western Hungary, with €12,444/ha.

We also have information on how the land prices changed in Serbia in the recent period. It's all in this week's Serbia Newsflash.

Currant berries often “rot left on the shrub”

The agriculture news portal Agrárszektor.hu reports that currant producers have a hard time selling their produce. According to farmers, this year “multiple trucks’ worth of berries will be left on the shrubs.”

Currants (also known as ribes, or gooseberries) are often supplementary crops at fruit farms, however, some specialist farmers produce currant syrup, fruit butter and pálinka from currant berries.

One reason for the underwhelming performance of currants on the market is that these berries have a trademark sour flavor and according to farmers, most consumers simply prefer sweeter fruits, e.g. strawberries. (Interestingly, the most famous fruit flavor in Hungary in fruit beer and other beverages is sour cherry however.)

Another reason is that domestic farmers find it hard to compete with foreign producers, and the beverage industry often chooses imported products.

A third reason, according to the farmers is that they are in a tough position when it comes to the selling of currants. These berries need to be sold quickly before they start deteriorating, otherwise the produce needs to be frozen to be preserved, which is not feasible with current energy prices, so farmers are forced to sell within the short window and according to them, traders exploit this situation.

Many who cannot, or will not sell turn their harvested produce into fruit cheese, fruit butter, jelly, syrup or pálinka themselves.

Home canning season: We touched upon fruit harvesting and preserving in Hungary. What is a fruit syrup? Is fruit butter jam? The home canning of fruits and vegetables is popuar in Hungary as a method of preservation and many who have small orchards, backyard plantations, vegetable gardens, make fruit butter (a kind of jelly), compote, fruit cheese (particularly, quince) and home-canned fruits and vegetables stored in jars. This process takes a lot of granulated sugar and flour. Normally, if one has a number of fruit trees, some of the harvest is eaten fresh and/or baked into sweets and cakes, but the majority goes into one of the ways to preserve fruit in Central Europe: Cooking for compote; cooking for fruit butter, cheese, jelly, fruit syrup; or the distillation of pálinka.