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Hungary AgMin expects big grains crop

Recent heavy rains hampered the wheat harvest, but Hungary still expects a bumper 2008 grains crop that could boost economic growth by about one percentage point, Agriculture Minister József Gráf told Reuters on Tuesday. 

Hungary, a landlocked country in central eastern Europe, is one of the biggest maize producers in the European Union. Widespread rainfall across Hungary’s main crop lands in past weeks have raised concerns of substantial damage to crops still in the fields a year after drought destroyed over 40% of the harvest. But with just 30% of wheat affected, the rains boosted already bullish expectations for maize even further, and, barring disaster, the agriculture minister said Hungary may prepare for a storage-busting harvest.

“I think wheat will produce a yield of 4.5 to 4.8 tons per ha on average, about 25 to 30% higher than last year, while regarding maize, (the crop) will be roughly double that of last year,” Gráf told Reuters in an interview. “As for maize, I expect an average yield of about 7.5 to 8 tons per ha, so the potential for a great harvest is there,” Gráf said, adding that an earlier projection for a grains crop of 16 million tons still looked achievable.

The projected yield in maize would comfortably surpass last year’s drought-hit harvest of 3.6 tons per ha and would even eclipse the 6.8 tons per ha seen in 2006, when Hungary had a record crop. Gráf said the expected crop could also boost Hungary’s economy, which grew by just 1.3% last year, far underperforming both the European Union average and stellar growth rates in neighboring Slovakia and the Czech Republic. He added that reckoning with roughly 8 million tons of domestic consumption, about half of the projected grains crop could be exported. The central bank forecast this year’s economic growth at 2.2%.

 
BIOFUEL BOUNCE

A recovery in grains, especially in maize, could also breathe new life into Hungarian biofuels investments. “The first bioethanol plant has been completed and this alone consumes over one million tons of maize a year. Another two distilleries are under construction,” Gráf said. He said if these plants go online next year, Hungary could devote about 2-2.5 million tons of maize to biofuels a year, which would ease at least some of the pain from higher energy prices.

“The big question is whether Hungary, which buys most of the energy it uses, can afford not to produce energy when it has the means of doing so,” Gráf said. “I don’t think it is heresy to produce energy from plants, or grains. If you don’t have your own energy, you have to look for the resources to produce it,” he said. (Reuters)