World Grain - February 2011 - 24

COUNTRYFOCUS

Focus on Hungary
Country ranks high among E.U. members in terms of land area dedicated to grain production
by Chris Lyddon

Key Facts
Capital: Budapest Population: 9,992,339 (July 2010 est.) Religions: Roman Catholic 51.9%, Calvinist 15.9%, Lutheran 3%, Greek Catholic 2.6%, other Christian 1%, other or unspecified 11.1%, unaffiliated 14.5% (2001 census). Location: Central Europe, northwest of Romania. Government: Parliamentary democracy; chief of state: President Pal Schmitt (since Aug. 6, 2010); head of government: Prime Minister Viktor Orban (since May 29, 2010). Economy: Hungary has made the transition from a centrally planned to a market economy, with a per capita income nearly two-thirds that of the E.U.-25 average. The private sector accounts for more than 80% of GDP. Foreign ownership of and investment in Hungarian firms are widespread, with cumulative foreign direct investment worth more than $70 billion. The government’s austerity measures, imposed since late 2006, have reduced the budget deficit from over 9% of GDP in 2006 to 3.8% in 2010. Hungary’s impending inability to service its short-term debt — brought on by the global financial crisis in late 2008 — led Budapest to obtain an International Monetary Fund-arranged financial assistance package worth over $25 billion. The global economic downturn, declining exports, and low domestic consumption and fixed asset accumulation, dampened by government austerity measures, resulted in an economic contraction of 6.3% in 2009. The economy rebounded in 2010 with a big boost from exports, and growth of more than 2.5% is expected in 2011. Unemployment remained high at more than 11%. GDP per capita: $19,000 (2010 est.); inflation: 0.3% (2009 est.); unemployment 8.3% (2009 est.). Currency: Forints (HUF): 202.03 Forints equal 1 U.S. dollar (Jan. 21, 2011). Exports: $93.74 billion (2010 est.): machinery and equipment 61.1%, other manufactures 28.7%, food products 6.5%, raw materials 2%, fuels and electricity 1.6% (2009 est.). Imports: $87.44 billion (2010 est.): machinery and equipment 50%, fuels and electricity 11%, food products, raw materials. Major crops/agricultural products: Wheat, corn, sunflower seed, potatoes, sugar beets; pigs, cattle, poultry, dairy products. Agriculture: 2.8% of GDP and 4.5% of the labor force Internet: Code. .hu; 2.655 million (2010) hosts and 6.176 million (2009) users.
Source: CIA World Factbook

Landlocked Hungary’s role in the world has changed dramatically in recent years with a transition to a market economy following the collapse of communism and E.U. accession in 2004. Agriculture is an important part of the Hungarian economy. According to its ministry of agriculture, only Denmark and the U.K. of the E.U. member states farm a higher proportion of their total area, and Hungary devotes a higher-than-average proportion of that area — at about half — to cereals. According to the International Grains Council (IGC), Hungary produced 12.3 million tonnes of grain in 2010, compared with 13.5 million in 2009. The wheat crop was 3.6 million tonnes, down from 4.4 million, while the maize (corn) crop fell from 7.5 million to 7 million. Barley production was unchanged at 1 million tonnes. The drop in production was the result of a wet year, according to e-mail responses supplied by Ildikó Lippai of the Hungarian Grain and Feed Association to World Grain. “Although in Hungary we have a relatively constant grain sowing area, the grain production is very changeable and highly depends on climate,” she said. “This production change is reﬂected in price volatility.” According to the Grain and Feed Trade Association, the average for wheat production is about 4 to 4.4 CZECH million tonnes on 1.1 million hectares. SLOVAKIA It quoted a national statistical ofﬁce ﬁgAUSTRIA ure which showed that last year just 3.7 HUNGARY million tonnes of wheat and 6.9 million SLOVENIA tonnes of maize were harvested on an ROMANIA area of 1.1 million hectares each. CROATIA “We are a net grain exporter,” it YUGOSLAVIA said. “Our national annual usage is BOSNIA BOSNIA S l th 2 5 i less than 2.5 million tonnes of wheat and around 4 million tonnes of corn.” Of that total, 3 million tonnes are for feed use and 1 million tonnes for industrial use. The milling industry uses 1.2 to 1.3 million tonnes of milling wheat a year. “As we usually produce more than our needs, we export annually 1.5 to 2 million tonnes of wheat and 3 to 4 million tonnes of corn depending on the production,” it said. “Our main destinations are the E.U. countries like Italy, Germany,
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