The Performance of the Agri-food Sector in the Recent Economic Crisis and during Covid-19 Pandemic

Abstract

Crises impact every sector of the economy; however, the magnitude of that impact varies between the different sectors. The agri-food sector-related lessons learned from the last two crises (global financial crisis in 2008, and the sanctions against Russia in 2014) are that international trade becomes lower and commodity prices rise. This article analyzes the performance of the Hungarian agri-food sector during the last three crises based on international and Hungarian datasets. The results show that impacts depend on many factors, such as the type of the agri-food products (raw material vs. processed product, perishable vs. non-perishable goods, etc.) or the depth of trade integration. It should be noted that Hungary is heavily integrated into the EU’s common market, its major trade partners are the other member states. At the commodity level, the share of raw materials is higher on the export side (e.g. cereals) compared to the import side (e.g. meat products). Based on the results, the impacts of the COVID-19 pandemic were different from the two previous crises. Despite the difficulties in transport, Hungarian exportation expanded and resulted in an increasing trade surplus, while international commodity prices remained stable. The identification of the different impacts of the coronavirus compared to the other two crises is the major finding of the article.