On the way to conquer export markets

“In ‘peacetime’ we mill an average of 1.2 million tonnes of wheat, which now looks unlikely to reach 1 million tonnes by the end of this year. Domestic flour consumption has dropped due to inflation, and our exports have reduced drastically. At the same time our flour import has also increased. Profits of the milling industry – in proportion to sales turnover – is around 2%”, says Dr Zoltán Lakatos, president of the Milling Chapter of the Hungarian Grain and Seed Association.

Less successful measures

The Russia-Ukraine war has had the biggest influence on the sector. In 2022 the main problem was the influx of cheap Ukrainian flour, followed by the gradual loss of export markets from the second half of the year. Dr Lakatos added that the misguided government measure to make the export of cereals subject to an export licence contributed to the loss of Hungary’s export markets. Another major reason for the record low grain exports was the very high domestic grain prices. The flour price cap in the sector wasn’t a good idea either.

We must compete!

A subsidised tender for milling technology development was launched two years ago. The five largest groups account for approximately 78% of the national milling output. These mills can compete anywhere in Europe in terms of technological development. As for the future of the sector, the president predicts that Ukrainian wheat and flour will remain in the European market, so Hungary will have to compete to regain its export markets. //