2006 was the year of grain

2006 was a successful year for Hungarian exporters of agricultural products. Exports grew by nearly 10 per cent-over the year, while imports expanded by 10,3 per cent. Imports from the EU-25 countries grew by 12,3 per cent. Poland is a major exporter to Hungary, especially of livestock (swine). Export revenues of EUR 3,7 billion exceeded the value of imports of agricultural products by 35 per cent. The EU-25 countries continued to be the major market for our agricultural products in 2006, with 70 per cent of all agricultural exports. 74 per cent of these products were sold in the markets of the EU-15 countries. Exports of grain and grain products played a major role in the expansion of agricultural export in 2006, with a value of EUR 710 million. 2,4 million tons of corn and 2,3 million tons of wheat was exported, which are record figures. Grain export generated revenues of EUR 105 million in December alone. The rapid increase in export revenues at the end of the year was the result of steep prise rises. While corn was exported at an average price of EUR102,9/ton,in October, the same was EUR122 in November and EUR 130,2 in December. The average price of wheat grew from EUR 105 in August, to EUR 127 in December. Theoretically, the expansion of the export of unprocessed agricultural products is not a favourable development. However, as this expansion was the result of a dynamic price increase, it would have been very unreasonable not to use up intervention stocks which have reached 6 million tons by the beginning of 2006. Product categories of extreme importance were meat and meat products, which generated export revenues of EUR 642 million, while exports of fruits and vegetables (EUR 580 million), that of animal fodder (EUR 294 million) were also significant. The export markets showing the fastest expansion were tobacco (58%), coffee, tea (32%), grain (26,3%), milk and dairy products (26%) sugar and sugar products (25,3%). Exports of oil seeds, animal fodder and meat products however, showed obvious decline. Grain exports were subject to large fluctuations both in terms of price and volume. These were not only due to fluctuations in demand, but also to logistic problems effecting deliveries. Official policies should be applied to reduce the high costs of transportation which have an adverse effect on our competitiveness. Without investment in logistic infrastructure, especially railway and waterways, we might easily find ourselves at a disadvantage compared to our rivals in the EU or overseas.