The entire Central European cereal market could be adversely affected if Hungary's problem of mounting grain supplies and lack of storage are not tackled soon, Hungary's farm minister Jozsef Graf said on Wednesday. If last year's record grain harvest of between 16 and 17 million tonnes is repeated this season as expected, it may take years to get rid of the surplus, the minister told the International Grains Council (IGC) conference in London.
With the 2005 harvest only weeks away, the new EU member state is battling to find additional space for between two and 2.5 million tonnes of surplus grains.
The country's farmers have already offered four million tonnes into EU-sponsored intervention stores produced from the 2004 harvest. "The unprecedented quantity of grain currently offered for intervention...places an enormous burden on the Hungarian authorities."
"We believe that if the 2004/05 marketing year trend is repeated in the long term, a persistent hard-to-handle excess may be generated in the Central European region's grain balance," Graf said.
The minister said Hungary's membership of the EU had adversely affected his country's cereals sector and he called on Brussels to deal with the problems.
"The competitiveness of Hungarian grain on the world market system has been significantly reduced due to the internal market prices raised by the European Union's intervention system."
Graf said Hungary had learned its lesson from the difficulties faced this season and planned to boost its competitiveness by expanding and modernising intervention storage capacity and improving transport and port facilities.
In Budapest, a government spokeswoman said Hungary will ask the European Union to open intervention export tenders for maize, and to extend the quantity and time limit of the existing wheat export tenders beyond the current 320,000 tonnes and the June 23 deadline.