Overview

In Hungary, arable land and permanent crops account for 4.3 million hectares (ha), of which about 120 thousand ha are irrigated.  Pastures account for 0.8 million ha and forests for 1.9 million ha.  Major crops include wheat (1 million ha), corn (1 million ha), and oilseeds (1 million ha) - 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 2.7 million pigs and a poultry flock of 40 million birds.  The number of cattle of all types is approximately 0.9 million 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 and cuts in VATs, corporate income taxes and social security contributions intensified the market and trade, and helped profitability, even in agriculture.

Hungary’s agriculture contributed 3.9% to the gross value added in 2021.  Although the total value of agricultural output (including services and secondary activities) increased by 14%, the volume of production – along with a 17% rise in prices – went down by 2.3%.  Agriculture accounted for 4.3% of total investments in the economy and for 4.3% of the national employment rate.  The share of plant products was 61%, that of live animals and animal products was 32%, and agricultural services and secondary activities amounted to 8.5 % of the sectoral gross output.

The country’s agricultural trade balance is positive.  Agricultural exports accounted for 8.9% of total exports from Hungary in 2021.  The share of agricultural imports has been stagnating at around 6% for years.  The foreign trade structure of agricultural and food products is relatively constant.  Most of the exported commodities in 2021 were grains and grain products (15%), meat and meat products (10%), animal feed (11%), vegetable oils (8%), beverages (8%), oilseeds (5%), dairy products (5%), and vegetables and fruits (5%). Imports mostly belonged to the commodity groups of animal feed (9%), confectionary products (7%), meat products (7%), dairy products (7%), beverages (6%), oilseeds (5%), fruits (5%), and tobacco (5%).  More than 90% of agricultural imports comes from EU member states. Hungary’s most important suppliers are Germany (19%), Poland (13%), Slovakia (8%), the Netherlands (8%), Austria (7%), Romania (7%), and Italy (5%). Remaining non-EU imports mostly originate in Serbia, Ukraine, Turkey, the United States, and China.

Soaring inflation and increasing price levels (caused by global market trends and the depreciation of the Hungarian forint) are limiting consumption in price sensitive segments. At the same time, adjusted food retail sales increased by 3% in the first five months of 2022, supported by price controls, tax refunds, pension bonuses, and double-digit wage growth.

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

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.

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 food-service 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. 

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.

U.S. Embassy - U.S. Agricultural Services
Gellert Golya, Agricultural Specialist
Budapest, Hungary
Tel:  +36 (1) 475-4162
Email: golyag@state.gov