Hungary: Government introduces further restrictions on agricultural import

Nieuwsbericht | 19-04-2024 | 14:23

Government institutes blanket declaration obligation, regardless of origin, for agricultural products on restricted Ukrainian product list

Agriculture Minister István Nagy has recently announced a five-point plan by the government of Hungary, intended to “aid producers in Hungary.” The five measures are as follows:

• Due to the market situation caused by Ukrainian imports, further measures affecting new imports have been taken alongside restrictions on Ukrainian agricultural products. The government imposes full declaration requirements onn agricultural products prohibited from being imported from Ukraine, regardless of their origin country.
• The Hungarian State Treasury is to fulfill the payments of the area and animal-based subsidies of the year 2023, by May 30, 2024. So far, the government has disbursed €1,2 billion to 156 thousand farmers. They are expediting this process, ensuring that another €672 million reach the farmers by the end of May.
• Agricultural Széchenyi Program Schemes: The government will provide up to an additional €114 million for the program until 2026. The scheme is available at an interest rate of 5%, and there is significant demand for it.
• The government is increasing the annual applicable tax return per hectare for diesel fuel. This translates to an additional €2.53 million in annual support.
• European Union development grants are being announced for the food industry, accounting for €1.014 billion.

Near the end of last week, the regulation instituting the blanket declaration requirement on agricultural products, Governmental Decree 80/2024 (IV. 11.) was adopted. According to the decree,  the import of agricultural products whose import from Ukraine is restricted, must generally be declared in advance to the National Food Chain Safety Office (NÉBIH), at least 24 hours ahead of importing (or 6 hours in case of air or water transport). Exceptions include sowing seeds, products brought in for personal consumption, and transit cargo.

The regulation entered into force five days after the announcement of the decree, on Tuesday, April 16, 2024.

The list of products for which the declaration requirement applies is the same as the agricultural and food products whose import from Ukraine is restricted:

HS Code	Product name
0201	Meat of bovine animals, fresh or chilled
0202	Meat of bovine animals, frozen
0203	Meat of swine, fresh, chilled, or frozen
0204	Meat of sheep or goats, fresh, chilled or frozen
ex 0207	Meat and edible offal of poultry of the species Gallus domesticus, fresh, chilled, or frozen
0407	Birds' eggs, in shell, fresh, preserved or cooked
0710	Vegetables (uncooked or cooked by steaming or boiling in water), frozen
ex 1001 99 00	Common wheat
1002	Rye
1003	Barley
1005 90 00	Corn (maize)
1008	Buckwheat, millet, and canary seed; other cereals
1101	Wheat or meslin flour
1102	Cereal flour (other than of wheat or meslin)
1104	Cereal grains otherwise worked (for example, hulled, rolled, flaked, pearled, sliced or kibbled), except rice of heading 1006
1205 10 90; 1205 90	Rape or colza seeds, whether or not broken
1206 00 91; 1206 00 99	Sunflower seeds, whether or not broken
1512	Sunflower-seed, safflower or cottonseed oil, and fractions thereof, whether or not refined, but not chemically modified
1514	Rapeseed, colza or mustard oil, and fractions thereof, whether or not refined, but not chemically modified
1905 10 00	Crispbread
2005	Vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen (excluding tomatoes and edible mushrooms)
2204	Wine of fresh grapes, including fortified wines; grape must other than that of heading 2009

Food inflation and impoverishment in Hungary

News portal Agrárszektor.hu has recently interviewed leading agriculture economist György Raskó on food inflation in Hungary.

Mr. Raskó stated that there is now a period of stability within the European Union regarding food prices, with no upward pressure on prices for raw materials from either domestic or external markets. In Hungary however, the most significant driving force behind food inflation is the exchange rate of the Hungarian Forint, as the national currency has once again started to dangerously weaken, stated the expert, adding that a high exchange rate will eventually drive up agricultural prices.

“The danger of inflation is singularly linked to the Forint, however, there is a mitigating force: there is an extraordinary level of impoverishment in the country,” Mr. Raskó said.

According to the economist, buying groceries day to day already poses a significant challenge for 40% of the population. The 10-15% who could afford to increase their consumption will not do it either so they will also not drive domestic growth. Mr. Raskó added that in the upcoming period, the food retail price index will not be able to rise because consumer purchasing power significantly restrains it.

Rapeseed cultivation declines with global warming

As the climate continues to change, rapeseed farming in Hungary continues to decline. This was the conclusion of a new report by local news portal Zaol.hu in Western Hungary. Elemér Simonfalvi, plant protection engineer and Zala County delegate of the National Chamber of Plant Protection  told the portal that winter crops in Zala County (in Western Hungary, bordering Austria), show a deceptive picture as although winter wheat and rapeseed wintered well, in the spring they suffered from the loss of tillering. Due to the mild weather, precipitation, and spring fertilization, the plants are 2-3 weeks ahead in their phenological development, according to the expert.

The ideal areas for rapeseed cultivation in Hungary are the cooler and more rainy regions of Western Transdanubia and Northeast Hungary. However, global warming is interfering with the crops’ development. This trend is not new; the rapeseed cultivation area has decreased in recent years because it is no longer as profitable as it used to be. For the crop to be profitable, the yield needs to be 3 or better yet, 4 tons per hectare. Achieving this now is quite doubtful according to the portal.

New cases of Avian influenza confirmed

New cases of Avian influenza were identified at multiple animal farms in Békés and Jász-Nagykun-Szolnok Counties in the Great Plains in South-East Hungary, reports the National Food Chain Safety Office (NÉBIH). The authorities once again draw attention to the importance of combating the avian influenza due to its reemergence, urging animal keepers to take preventive measures against the outbreak.

Animals that contracted the disease were found at a duck farm with 44 thousand heads of livestock, as well as at breeding goose farm counting 1,500 specimens, and finally, at a turkey farm with 20 thousand heads of livestock. The disease was confirmed to be the H5N1 strain of highly pathogenic Avian influenza.

The elimination of all affected stocks is underway, reports the authority. NÉBIH has designated a 3-kilometer protection zone around the farms, as well as established a 10-kilometer surveillance (observation) zone. In Békés County, the surveillance zone has been extended.

Poultry and pork prices rising

In a new report, the Research Institute for Agricultural Economics (AKI) reviewed the latest trends in the poultry and pork sectors in Hungary. Despite facing difficulties due to Ukrainian dumping in the EU market, the Hungarian poultry sector has significantly increased its exports to other EU countries. According to data from the Central Statistical Office (KSH), Hungary's poultry meat exports increased by 10% in the first months of 2024. However, poultry meat imports also grew, posing further challenges for the sector.

The EU’s pork meat export fell by 20% in 2023, and imports also decreased, by 10%. KSH data shows that in January 2024, live pig exports increased by 60% y-o-y, to 3.2 thousand tons. Live pig imports also increased by 5%, to 6.3 thousand tons. According to the data, the producer price of domestically produced pork, excluding VAT and transportation costs, was €2.19 per kilogram of hot carcass weight in March 2024, which shows an increase of 8% y-o-y. The selling price of processed pork cuts (loin, shoulder, leg) was 1.8% lower in March 2024 compared to the same month in 2023.

The price and demand fluctuations experienced in the two sectors pose serious challenges for the Hungarian agriculture and food industry.