Commercial position of Hungarian meat and edible by-products

Poór, Judit

Keywords: meat market, foreign trade, CMS model, RCA index

Meat and meat products play an important role in the agricultural foreign trade of Hungary. This is so even though their share in agricultural export and import-export balance declined in the period covered by our research, while meat consumption and foreign trade underwent a significant increase globally.
The paper uses the Constant Market Share (CMS) model and the revealed comparative advantage (RCA) index to describe the change in the foreign trade position of meat and edible slaughter by-products (HS02) over the 1997-2006 period. Results of the CMS model indicate that increased export over the covered period was the result of increasing import by the target countries. Positive residual effect was only seen with respect to third countries. The results indicate improvement of competitiveness for bovines in the market of the European Union and for other types of meat in third countries. Residual effect is so striking in both cases that it indicates a positive change with respect to the global market.
The revealed comparative advantage index findings show a comparative disadvantage for cattle, mutton and goat meet in both reference markets. The situation of meats with a comparative advantage indicating competitiveness is till bad: RCA index figures are clearly declining. The only improvement seen was for pork in non-EU countries, from 2005 to 2006. Despite these findings, the RCA index still fives a comparative advantage for the whole product category covered by the study, for both groups of countries.
As a summary: both methods used indicated a decline in the Hungarian meat market in foreign trade over the period studied, which can be seen as foreshadowing the grave consequences of the financial and economic crisis.

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