As global wheat prices reach new record highs due to the war in Ukraine coupled with poor harvests in China and Argentina, Hungary is placing significant controls on wheat exports In order to prevent food and animal feed shortages in the country.
To support this effort, Hungarian Farm Minister István Nagy issued an ordnance that all grains exports must be registered beforehand and the state has a purchase priority on them until May 15.
Nagy emphasized that grain market prices and feed prices had risen radically due to the loss of Ukrainian crops from the market, and that the demand for the purchase of Hungarian agricultural products abroad was growing significantly due to fears of shortages.
“Hungarian farmers and Hungarian families must be protected from economic and supply problems, this is the main task of the government. Therefore, with special regard to domestic livestock keepers, the supply of livestock feed and meat production, the state may prohibit the transportation of grain abroad,” István Nagy said.
War in Ukraine to hit poor countries’ food supply, could lead to major crises
Russia and Ukraine account for a whopping 29 percent of global wheat exports
According to the information of the Ministry of Agriculture, the notification obligation does not apply to exports from the territory of Hungary as transit transport and humanitarian aid. Pursuant to the decree published in the Official Monitor, following a notification to food safety authority Nébih, the Minister of Agriculture must examine whether the export of grain significantly impedes or makes impossible the supply of raw materials for the supply of feed to domestic livestock farms or endangers the local supply. If the head of the ministry considers that these circumstances exist, he shall inform the minister responsible for the supervision of state property, with Hungary then potentially exercising its right to buy the product.
Compliance with the reporting obligation is monitored by the police and the National Tax and Customs Administration. If the authorities catch someone transporting grain abroad without notification, they can impose an administrative fine of up to 40 percent of the net value of the crop on the trader or producer concerned.
As Remix News recently reported, the war in Ukraine and the sanctions against Russia will have a severe effect on grains prices, as Russia and Ukraine combined account for 29 percent of global wheat exports.
Rising prices are expected to impact the entire world, but particularly poorer countries in Africa, the Middle East and Asia. There are fears of another “Arab Spring” if wheat prices continue their rise.
In Hungary, cereal crop production oscillates between 6.5 to 8 million tonnes. Even the lower figure is sufficient for domestic supply and leaves a small surplus for exports. Hungary accounts for approximately 1.25 percent of global grain supplies.
Russia also supplies a significant amount of the world’s fertilizer, nickel, and energy, with sanctions and supply disruptions due to the conflict expected to have significant consequences.