Using the market opportunities in the food economy’s foreign trade – measurement of success based on the potential balance

Abstract

This work was aimed at analysing the effects of the sudden food price explosion followed by price crash which occurred recently on the foreign trade of the food economy. Comparison of the balances of the different countries was difficult due to the differences in the absolute dimensions; therefore a new method was introduced. Firstly, with the help of the “food economic foreign trade profile†extent to which the different product categories (divided by main product groups or by degree of processing) contribute to the foreign trade balance of the given country’s food economy was examined. In the second step, with the help of “profile indexing†, the extent to which the country in question was able to turn to profit the market opportunities offered by the price boom was demonstrated numerically. It can be stated that the foreign trade of the Hungarian food economy is amongst the winners of the price explosion. The balance improved remarkably between the two periods because exports of cereals and oilseeds increased greatly due to the increasing market prices during 2007 and 2008. As regards the performance of the other sectors, Hungary can be however ranked among the losers as a consequence of the decreasing international competitiveness of the production. The assessment has also demonstrated that some of Hungary’s direct competitors (e.g. the Netherlands and Germany) were able to make better use of the opportunities.