Hungary Newsflash, Week 29, 2022
Inflation at historic high, consumer price index drastically increasing, the government promises to aid in Ukraine's cereal transport and a new method for the monitoring and prediction of droughts - The week in Hungarian agriculture
New inflation record set in June
According to new official figures by the Central Statistical Office (KSH), Hungary has reached the highest inflation figure, 11.7%, in more than two decades. The last year when the country saw inflation figures over 10% was 1998.
Core inflation was even higher in June with 13.8%. This figure does not include products with volatile and fast-changing prices like medicine, energy or fuel.
According to KSH’s figures, food prices increased by 22.1% in June, y-o-y. There are products in this category however, which saw much more significant price rises: The price of margarine increased by 58.1% y-o-y, the price of cheese increased by 43.4%, that of dry pasta by 39.9%, dairy products by 36.5%, milk by 24.9%, eggs by 34.3%, pastries by 31.1%, bread by 39.7%, and that of poultry rose by 37.1%.
The price of services increased on average by 5.6%, and the price of alcoholic beverages and tobacco products rose by 7.3%.
According to the portal Telex.hu, the continuously rising prices suggest that inflation is converging to the level projected by the Hungarian National Bank for September, which is estimated to be 14-16%.
Highest price increase for bread, meat and fruits in the EU
The news portal 444.hu reports that Hungary’s consumer price index increase has been the third highest of the EU member states between January and May this year. Hungary’s 12.8% increase of the harmonized index of consumer prices has only been surpassed by Bulgaria (13.8%) and Lithuania (14,6%) according to the latest statistics by Eurostat. The EU average for the period is 6.7%, the Dutch figure is 5.4%.
Out of the food product categories, Hungary saw the highest increase of the consumer price index for bread (Hungary: 19.4%, EU: 7.8%, Netherlands: 3.5%) and meat in general (Hungary: 17.4%, EU: 8.8%, Netherlands: 11.5%). The Hungarian figure for chicken breast, pig’s shank/leg, chicken carcass and wings have also been within the top ten in price index increase.
Hungary also had the highest increase of the consumer price index for fruits (11.9%, EU: 5.6%, Netherlands: 0.4%). In the case of vegetables, the country ranked fourth on the list (Highest: Romania with 18%, Hungary: 13.7%, EU: 3.9%, Netherlands: 1.8%).
Various other products in which Hungary’s producer price index increase was within the top ten include eggs, butter, margarine, non-alcoholic beverages and beer.
Minister Nagy: Hungary is ready to help in the Ukrainian cereal transit
Last week, Minister for Agriculture István Nagy has met with the Ukrainian Minister of Agrarian Policy and Food, Mykola Solsky, in Lviv, Western Ukraine. Following their discussion, the Minister has announced that Hungary is “ready to closely cooperate and aid in the widening of the Ukrainian cereal export.”
According to a statement by the Ministry of Agriculture, Hungary is willing to aid Ukraine in transporting the country’s stockpiled cereals which are currently stuck within Ukraine’s borders due to the blockade of the country’s seaports.
“The development of railways, transshipment hubs and storages is very important. In a joint effort and with enough support, the EU could also aid in these investments,” reads the ministry’s statement, which further states that an entrepreneurial zone in the area of the Ukrainian-Hungarian border should be created where processing plants could be constructed. According to the Hungarian ministry, this is a strategic issue that is connected to the long-term food security of the world.
Hungarian scientists develop a new method for drought monitoring
A team of researchers at the University of Szeged have developed a new, satellite-based method for the remote sensing (and to an extent, prediction) of drought periods, announced the university.
The system is based on satellite earth observation and can remotely sense the entire surface area of Hungary with a resolution of 10mx10m blocks, sampling the surface twice per week.
According to the scientists, quantifying the magnitude and effects of a drought is hard as other factors aside from a lack of rain include temperature changes and the prevailing precipitation and weather conditions in the period before a drought starts. Moreover, meteorological predictions for the weather and rainfall are only reliable for a time window of 10 to 14 days.
However, two major factors in the effects of a drought are soil humidity and the condition of the vegetation, both of which can be measured and used in predicting drought patterns to a certain extent.
Researchers at the University of Szeged have been working on creating such a predictive method for over a decade, however, only recently did developments in technology, particularly, satellite-based earth observation and remote sensing, allow for the development of the necessary monitoring systems.
Soil humidity is measured by radar-based earth observation data while the vegetation’s condition can be calculated from remote sensing in the infrared and thermal infrared spectra. Based on these, the comparative weakness and underdevelopment of local patches of vegetation can be detected. These indicate water scarcity and can provide data on the possible effects of a coming drought.
The University also collaborated with the National Water Directorate and the Water Directorate of the lower Tisza region to create a new drought index, which is the basis of a system called Operative Water Scarcity Analysis and Prediction System. In the future, this might help better predict the patterns of drought periods and aid in the preparation for them.