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Dániel Kovács
31/03/2025 17:29
Due to the distance and infrastructure shortcomings, high transportation costs, local regulations, and administrative hurdles can pose serious obstacles. Additionally, competition is fierce, as China, Russia, and Türkiye are also active players in the region. Still, an increasing number of examples confirm that Hungarian companies have a place in this market.
It is memorable how much attention the media once gave to Hungary’s attempt to trade potatoes in Central Asia. The story, however, was about much more than that. The Carpathian Basin was once the grain center of Europe. A royal decree elevated seed breeding to a scientific level as early as the 1890s. This tradition continued during the state-run agricultural period, and even today, Hungary produces high-quality products by international standards. Between 2010 and 2021, Hungarian agricultural exports grew by 63.7%, and in 2021, the value of seed exports reached 283 million euros.
The importance of seeds has also emerged in Central Asia, especially in Kazakhstan, Uzbekistan, and Azerbaijan, after recognizing the significance of food security. The countries in the region are increasingly reinvesting the revenues from raw materials into agriculture, particularly in agricultural education and research and development.
For this reason, the region could be an attractive destination for Hungarian agricultural companies, despite the challenging terrain. One of the greatest challenges is logistics and transportation costs. Due to the distance and infrastructure deficiencies, Hungarian exporters must contend with high shipping costs. Additionally, local regulations and administrative barriers can also pose significant obstacles. Another complication is the strong competition in the local market, as China, Russia, and Türkiye are all active in the agricultural sector. Despite all of this, the work of the past decade has proven fruitful.
Hungary has long-standing expertise in water management. Hungarian water experts are recognized worldwide, and in recent years, they have participated in several water management and irrigation projects in Africa, Asia, and various parts of Europe. The HEPA Hungarian Export Development Agency has recognized the potential of Hungarian water technologies and has helped numerous domestic companies enter international markets. An important milestone in this process was the signing of an agreement on November 10, 2022, in Samarkand, Uzbekistan, during the Organisation of Turkic States (OTS) meeting. The agreement was to establish the OTS Drought Prevention Institute in Budapest. The institute aims to help the member states of the OTS address drought challenges and promote the application of modern Hungarian water technologies in the region.
In recent years, Hungary and Uzbekistan’s economic relations have become increasingly close, especially in the agricultural and financial sectors. The Hungarian agricultural sector is also strengthening its position in the Uzbek market.
A prime example is the Uzbek-Hungarian Potato Research Center, which began operations in 2021. The center's primary goal is to introduce Hungarian potato varieties and seed potato cultivation technologies in Uzbekistan. The country currently relies heavily on imported potatoes, so Hungarian expertise can significantly contribute to increasing self-sufficiency. The project’s results so far have been noteworthy: since the center's opening, approximately 400,000 seedlings have been grown with the help of Hungarian experts, which can enhance the efficiency and productivity of Uzbek agriculture.
Work is underway on the previously mentioned collaboration with the Drought Prevention Institute, which focuses on three main topics: developing soil maps, developing drought-resistant plants, and ecological soil improvement.
Hungarian agricultural exports could be further boosted by a special industrial zone developed near Tashkent, which provides Hungarian companies with special legal status. This creates an opportunity for Hungarian agricultural and food companies to carry out their investments in the country under more favorable conditions. A financial fund has also been created specifically to support the expansion of Hungarian companies in Uzbekistan. This step is expected to provide additional incentives for the agricultural sector to become more involved in the development of the Uzbek market.
Kazakhstan, Central Asia's most populous country and the richest in underground energy resources, maintains good relations with Hungary. Therefore, it is no surprise that Kazakhstan imports a significant number of products, with exports totaling 128.31 million dollars. The largest Hungarian investors and exporters include MOL, Egis, and Richter Gedeon, while grain and seed exports are also significant. Among others, Elitmag Ltd. has achieved remarkable results in Kazakhstan, supplying hybrids and conducting variety registration trials locally.
A few months ago, it was revealed that three Hungarian agricultural companies have teamed up to breed waterfowl in Kazakhstan as part of a 15 million dollar investment, processing both meat and feathers. One large Hungarian agricultural group is also setting up a feed and premix plant in the country with significant support from the local investment promotion agency. Another Hungarian company is already growing Hungarian hybrid corn on more than fifty hectares in Kazakhstan, with plans to expand the area threefold.
Hungarian exports to Tajikistan amounted to 2.69 million dollars. Similar to Uzbekistan, an agricultural and food product group has succeeded in becoming one of the top three export groups. A standout player is the Marton Genetics group, which has been active in the Central Asian region in recent years and recently signed new agreements to expand its role in Uzbekistan. The company is also involved in the work of the Drought Prevention Institute, established in Budapest under the HEPA initiative, within the framework of the Organisation of Turkic States. Marton Genetics’ current projects focus on adapting to the climatic conditions of Central Asia and on technology and knowledge transfer. Currently, these projects concern hybrid corn, but the production of cereal seed is also planned for the medium term.
The author is a business journalist