Hungary - Country Commercial Guide
Agricultural Sectors

Provides an introduction to the agricultural best prospect industry sectors in this country.

Last published date: 2021-11-19

In Hungary, arable land and permanent crops account for 4.5 million hectares (ha), of which about 101 thousand ha are irrigated.  Pastures account for 0.8 million ha and forests for 1.9 million ha.  Major crops include wheat (0.9 million ha), corn (1 million ha), and oilseeds - mostly sunflower and rapeseed (0.9 million ha).  The country also has a long tradition of producing planting seeds and horticultural products.  Animal production includes 2.9 million pigs and a poultry flock of 39 million birds.  The number of cattle of all types is approximately 933,000 head. 

Hungary is a resilient, export-driven economy with lucrative opportunities in agriculture.  Improvements in technological readiness and financial markets provide positive business incentives.  Fiscal loosening, cuts in VATs, corporate income taxes and social security contributions intensify the market and trade, and help profitability, even in agriculture.  Despite the COVID-19 crisis, growth in real wages has remained unbroken, resulting in increased purchasing power, solid demand in the food sector, and a stable foreign trade structure. 

Hungary’s agriculture contributes 4.1% to the gross value added.  Food industry contribution stagnates at around 2%.  Agriculture accounts for 4.3% of total investments in the economy and for 4.6% of the national employment rate.  The food industry contributes 2.7% to investments and 3.2% to the total number of employees.  The gross output of agriculture shows an upward trend at current basic prices.  The share of plant products is 58%, that of live animals and animal products is 34%, and agricultural services and secondary activities amount to 8% of the gross output.

The country’s agricultural trade balance is positive.  Agricultural exports account for 9% of total exports from Hungary.  The share of agricultural imports has stagnated at around 6% for years.  The foreign trade structure of agricultural and food products is relatively constant.  Most of the exported commodities in 2020 were grains and grain products (17%), meat and meat products (9%), vegetables and fruits (6%), animal feed (10%), beverages (8%), oilseeds (6%), and vegetable oils (6%).  Imports included meat products (9%), dairy products (7%), fruits (5%), beverages (6%), confectionary products (7%), coffee, tea, cocoa and their products (5%), and animal feed (8%).  More than 90% of agricultural imports come from EU member states. Hungary’s most important suppliers are Germany (19%), Poland (14%), Slovakia (9%), Austria (8%), the Netherlands (7%), Italy (6%), the Czech Republic (5%), and Romania (5%). Remaining non-EU imports mostly originate in Serbia, Ukraine, Turkey, China, and the United States. 

As with many other European countries, Hungary has been facing severe socio-economic challenges due to consecutive waves of COVID-19.  In particular, the hotel, restaurant, and institutional (HRI) sectors are suffering from the economic consequences of the pandemic.  Temporary restrictions adopted in tourism, hospitality, and catering sectors required the rapid reorganization of agricultural sales from services to retail trade.  This resulted in a temporary loss of consumption in one of the largest markets for agriculture, the HRI industry.  The COVID-19 pandemic brought these challenges to the government’s attention.  Maintaining the sector’s strategic and multifunctional role became a key objective of the country’s Economy Protection Action Plan (including the National Food Economy Crisis Management Program).

Although increasing price levels, caused by global market trends and the depreciation of the Hungarian Forint against the euro, limited consumption in price sensitive segments, food retail sales in the first half of the year did not change much compared to the same period in 2020.  At the same time, the pandemic has accelerated a series of global trends in the sector, such as the increasing share of online trade.  Multinational retailers upgraded and expanded their services, and offered “no-touch” home deliveries for customers.  The COVID-19 pandemic also brought health consciousness increasingly into focus.  Most consumers adjusted their eating habits and diet for health reasons.  As a result, the growth in the consumption of hypoallergenic food products became more apparent.  In particular, gluten- and sugar-free products gained increasing market share. 

Regarding food and agricultural products, Hungary has a well-developed distribution system.  While about two thirds of food on the retail shelves are of Hungarian origin, opportunities still exist for U.S. products with good price-value ratios.  Hungarian importers look for well-known brands and special, innovative, or new to market products when deciding on products to order. As a result, entering the market with a single product or single product line can be difficult.  As brand loyalty is not a decisive factor in purchasing decisions, new ideas and new brand names are welcome from importers and buyers.

Prospects in food retail

As the economy is getting back to normal after the pandemic, the positive trend in consumption and spending on food provides opportunities for U.S. exporters.  A broad range of consumers are open to American foodstuffs.  An increasing number of buyers are seeking quality products, special, or gourmet foodstuffs from the United States, helped in part by stories, traditions, and positive feelings for America.  For instance:

•      Increasing beer consumption offers limited but improving export opportunities for U.S. products.  Craft beer contributes to the dynamic growth in this segment, and has good market potential despite the high number and good availability of substitute products.  Flavored alcohol-free beer also continues to gain popularity. Still, price competition remains a decisive factor.

•      U.S. bourbon whiskey is popular among Hungarians who can afford premium products.  The current level of U.S. whiskey exports to Hungary can be increased, however, the high VAT and excise tax on spirits makes exports challenging.

•      As western consumption patterns are emerging especially among the younger consumers, exports of sweets and snack foods offer lucrative opportunities.

•      The pet food market also holds good prospects.  The number of pets and responsible pet owners is growing.  As wages and purchasing power have notably increased in recent years, and the financial situation of the middle class improved, sales turnover significantly rose even in the premium and super premium segments.

Prospects in tourism and catering

After the COVID-19 pandemic, a tourism boom is expected with a strong influence on the variety of needed goods and on the assortment of imported products.  Fine dining businesses with a notable demand for U.S. foodstuffs can provide U.S. exporters with good opportunities.

Foodservice operators, event marketing professionals, and regional tourism offices will likely team up to create more open-air events, making various consumer foodservice types and cuisines popular to boost sales.  Before the pandemic, full-service restaurants, burger based fast food, and food trucks led this trend.  Gastro-tourism and demand for fine dining drives sales in Budapest, but fine dining initiatives were emerging in the countryside as well.

High quality U.S. beef has good prospects at full-service, white tablecloth restaurants, targeting both upper end domestic consumers and tourists.

Prospects in food processing

About 4,400 food businesses are operating in the country.  Imports of out-season or unavailable ingredients, additives, and packaging materials as well as technologies can provide further export opportunities. 

Prospects in livestock production

U.S. bull semen accounts for more than 80 percent of imported dairy cattle genetics.  Regarding the stabilized dairy market, and the increasing number of cattle inventories, there is growth potential for these products.

For detailed information, please consult the US Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) Exporter Guide for Hungary. Useful information is also available to exporters in FAS Budapest’s Food and Agricultural Import Regulations and Standards (FAIRS) narrative and FAIRS export certificate report.