MBH Bank: Despite the low prices, the outlook for the Hungarian food industry has become more favorable

The credit institute’s index, prepared by surveying agricultural market players, was last this high two years ago, but the balance of power has changed significantly: while at the end of 2021 the optimism of plant growers, who are currently in more difficult conditions, played a decisive role in the positive outlook, now the more favorable situation of livestock keepers and breeders is driving the sector . Food inflation moderated to around 10 percent by autumn, so the sector is confident that demand for store products will also improve in addition to the re-strengthening of real wages. The food retail turnover is still lagging behind the usual.

“We expect 2024 to be a transitional year in agriculture. Earlier, we pointed out that one year is not enough to recover from the situation in which the European and Hungarian economies are now, including agriculture. In the past period, the cost and profitability conditions of many businesses have deteriorated, this is especially true for crop cultivation and winemaking. In order to permanently improve the situation and resilience of agriculture, the sector must adapt. Sustainable farming, efficient production methods, better quality, and an increase in added value are needed. This can improve competitiveness and profitability. As one of the leading financiers in the sector, we offer expertise and knowledge for this”

– said Dávid Hollósi, managing director of MBH Bank’s Agricultural and Food Business. He added that the new European Union tenders will arrive next year, and perhaps the desire to invest may improve. Speaking about the expected evolution of the most important external factors affecting the food economy, he said: the supply chains partially damaged due to the Russian-Ukrainian war may be restored by 2025, by then inflation may slow down, real wages may strengthen, and consumption may increase significantly.

“However, it is important that agriculture will produce what we will consume in 2025 next year. In the longer term, we therefore do not expect a significant drop in prices, but at the same time, we do not expect a further increase either.”