Hungary’s grain lobby criticized a government ban on agricultural imports from Ukraine, saying it would lead to shortages and undermine efforts to curb the European Union’s highest inflation rate.
(Bloomberg) — Hungary’s grain lobby criticized a government ban on agricultural imports from Ukraine, saying it would lead to shortages and undermine efforts to curb the European Union’s highest inflation rate.
The country needs to import about 700,000 tons of feed corn after a poor harvest last year and eastern neighbor Ukraine would be the cheapest supplier, Zsofia Potsa, secretary-general of the Hungarian Grain Association, told Bloomberg in an interview on Friday.
“Our members are desperate and don’t support any import bans, in fact we need imports,” Potsa said by phone. The association represents millers, grain processors and traders who produce everything from basic food items like flour and sugar to animal feed and ethanol.
Prime Minister Viktor Orban’s government joined Poland and Slovakia to impose a ban on Ukrainian grains and selected agricultural products until the end of June. While those EU nations argue such shipments risk hurting domestic producers, Potsa said that blocking those flows will keep pressure on food prices in Hungary, which has an inflation rate exceeding 25%.
Hungary will continue to allow the entry of Ukrainian agricultural shipments — a vital source of income for Kyiv as it fights an invading Russian army — so long as they’re destined to third countries.
Government interventions have become a hallmark of Orban’s rule, including last year’s imposition of restrictions on agricultural exports after a scorching summer cut output.
“We just had export controls and now we get an import ban, it’s all over the place,” Potsa said. “It’s hard to call this anything other than dilettantism.”
The government has also kept a regime of controversial price caps in place for basic food items, which the central bank blames for fanning inflation by forcing retailers to raise the cost of other goods to compensate for lost revenue. The cabinet on Thursday announced that it would force supermarkets to cut the price of basic food items in a new set of measures.
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