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 (0.8 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 2.6 million pigs and a poultry flock of 35 million birds. The number of cattle of all types is approximately 0.9 million head.
Hungary is a resilient, export-driven economy. 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 3.2 % to the gross value added in 2022. Although the total value of agricultural output (including services and secondary activities) increased by 17%, the volume of production – along with an average 44.8% rise in food prices – went down by 18%. Agriculture accounted for 4.5% of total investments in the economy and for 4.3% of the national employment rate. The share of plant products was 57%, that of live animals and animal products was 37%, and agricultural services and secondary activities amounted to 6% of the sectoral gross output.
The country’s agricultural trade balance is still positive. Agricultural exports accounted for 9.3% of total exports from Hungary in 2022. The share of agricultural imports has been stagnating at 6.4% for years. The foreign trade structure of agricultural and food products is also relatively constant. Most of the exported commodities were grains and grain products (13%), animal feed (11%), meat and meat products (9%), vegetable oils (9%), beverages (9%), oilseeds (6%), dairy products (6%), and vegetables and fruits (5%). Imports mostly belonged to the commodity groups of oilseeds (10%), animal feed (9%), grains (8%), confectionary products (6%), meat products (7%), dairy products (6%), and beverages (5%). More than 84% of agricultural imports came from EU member states. Hungary’s most important suppliers are Germany (15.9%), Poland (12.1%), Slovakia (9%), the Netherlands (7.5%), Austria (7%), and Romania (5%). The remaining non-EU imports mostly arrive from Ukraine (9.6%), Serbia, the United States, China, Turkey, and the UK.
High inflation and increasing price levels (caused by global market trends and the depreciation of the Hungarian forint) are limiting consumption in price sensitive segments. However, adjusted food retail sales increased by 8.3% in 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 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. Since brand loyalty is not a decisive factor in purchasing decisions, new ideas and new brand names are welcome in the market.
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, 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 contributed to the dynamic growth in this segment, and it still has market potential despite the high number and good availability of substitute products. Premium beer and flavored alcohol-free beer products have also maintained their popularity.
• 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, though the high VAT and excise tax on spirits makes the 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 stable prospects. The number of pets and responsible pet owners is growing. As wages have notably increased in recent years, and the financial situation of the middle class has improved, sales turnover can be raised even in the premium and super premium segments.
Prospects in tourism and catering
After the COVID-19 pandemic, tourism is expected to rebound with time and with an influence on the assortment of imported products. Fine dining businesses with some demand for U.S. foodstuffs can provide U.S. exporters with opportunities.
Gastro-tourism drives sales in Budapest, but fine dining initiatives are emerging in the countryside as well. High quality U.S. beef has good prospects at full-service, white tablecloth restaurants, targeting tourists and upper end domestic consumers.
Foodservice operators, event marketing professionals, and regional tourism offices will team up to create more open-air events, making various consumer foodservice types and cuisines popular to boost sales.
Prospects in food processing
Thousands of 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