According to MKB and Takarékbank experts, food prices will decrease

By: STA Date: 2022. 10. 26. 10:14

Food may become more expensive until the end of the year, and a price increase is expected in the first half of 2023, but it will be smaller than this year – MKB Bank Nyrt. and Takarékbank Zrt. said on Wednesday at a press conference of agribusiness experts in Budapest.

(Photo: Pixabay)

According to the managing director of the agricultural and food industry business, food prices will continue to rise in 2023 due to the war in Ukraine, as last year’s feed produced from even cheaper raw materials will run out by then. The current price level is therefore not the wartime price level, but only the post-coronavirus price level. The producers are also aware of the difficulties, despite this, they do not feel that their situation is as serious as at the beginning of the epidemic period – said Dávid Hollósi. According to their survey, despite the almost HUF 1,000 billion crop loss due to the drought, the prospects for field crops are the most favorable because they can be sold at a good price. The producers would only have a better year if the high buyer’s price was combined with a good harvest. In addition to sunflowers, corn, and wheat, there is also hope for growing vegetables, especially greenhouses that utilize geothermal energy, as their gas-heated Western competitors are now forced to produce at a much higher cost. Therefore, the Hungarian producers can finally enter the Western markets, which will also be good for them, because the domestic consumption will probably fall due to the increase in prices – believes Dávid Hollósi, who says that fruit growers are also struggling with similar problems, because customers are the first to give up on their products. if they can spend less.

Livestock farmers are also in a difficult situation, they are mainly troubled by the rise in feed and energy prices

He added that price increases can reorganize consumer habits for a long time, and the turnover of lower-quality food products will temporarily increase, as the rise in salaries may take several years to reach the food price increase of the last year. At the same time, the large repricing may end soon, such an increase is hardly expected again in the foreseeable future. According to the business manager, with such price increases, 2023 will not be the year of large investments in agriculture and the food industry, because the acquisition of the current assets necessary for production also causes problems for many people. According to Dávid Hollósi, frugality may be the most important thing for consumers in the coming years, because the era of cheap food is over, the proportion of wasted food in Western countries is still almost 40 percent, and the crops of almost 1 billion hectares of farmland worldwide are wasted.

Agricultural and food industry strategic analyst Csaba Héjja also highlighted the evolution of energy prices

The rise in prices has been continuous since the middle of 2020, and this year seems particularly unpredictable. The efficiency of the Hungarian agriculture and food industry has improved a lot in recent years, despite this, it still consumes a relatively large amount, worth 180-190 billion forints annually. Although this is not a significant amount in addition to the output of more than HUF 3,000 billion, this year plant growers, livestock keepers, and processors will have to spend HUF 150 billion more on fuel and heating. According to Csaba Héjja, the vulnerability to fossil energy carriers should be reduced in particular, as diesel and gas account for the majority of consumption. Due to high energy costs, energy efficiency improvements pay off faster than ever before, so investments for this purpose represent a great opportunity for both investors and bank financing, he added.


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