Hungary's grain crop will fall to 13-15 million tonnes from over 16 million last year as rain and floods are delaying maize sowing and have hurt wheat planted earlier, leading trading firm Agrograin said on Monday.
Hungary has had two exceptional crops in a row, bursting its silos, but that is unlikely to be repeated this year as groundwater has been standing on 100,000-250,000 hectares for months, and many more fields are saturated with rain water.
"I wouldn't say the crop will exceed 16 million tonnes, but there is potential for 13-15 million," Agrograin Managing Director Imre Orban told Reuters in a phone interview.
"There is a saying that rain makes grain," he added. The abundant rain could still compensate for the lower harvest area."
Hungary's main rivers the Danube and Tisza reached record heights last month, threatening to burst their banks, but the damage to agriculture from that was mostly limited to rising groundwater near the soaked dams.
Orban said wheat planted in the autumn has been damaged on around 100,000 hectares overall, but he added that farmers still had some time to catch up with remaining spring work.
"There are still two-three weeks left for (sowing) maize, and sunflower seed, too."
Orban said the lower harvest would not ease the landlocked eastern European country's oversupply problem as it continues to produce substantially more than its 8 million-tonne domestic need.
"(The situation) will not improve, only it will not get worse," he said.
The Agriculture Ministry forecast last week that Hungary will conclude the season at the end of May with 7 million tonnes of intervention stocks after 4.41 million tonnes offered since November, half the EU total.
"The intervention price will continue to be the benchmark in the market," Orban said.
He said there was not much hope to sell lots of grain in neighbouring countries without subsidies, while Hungary's big transport cost disadvantage made exports further afield difficult.
"Globally the market situation is not one in which we could sell the produce so much above the intervention price that would cover the transport cost," he said.
The European Union buys surplus grain from farmers at a set price in the intervention system, and this has become the major outlet for Hungarian grain, especially maize, of which farmers have offered more than 3 million tonnes this season.
Hungary's newly re-elected Socialist government is planning to reform the agriculture sector by shifting focus to biofuels and livestock and away from extensive wheat and maize growing.