Pressure on raw materials dampens food industry

The Dutch food industry continues to face persistent challenges. Production volume has now been lower than the previous year for ten consecutive months, a trend that is expected to continue, according to ING.

Recent figures up to January 2024 indicate that the decline in production is largely due to reduced raw material supplies. For instance, the potato industry processed almost 9% fewer potatoes in the first two months of this year. Similar issues are evident in the dairy and cocoa sectors. Although the meat industry recorded a slight increase due to a rise in the number of cattle slaughtered, the overall trend remains negatively impacted by fluctuating raw material prices and limited supply.

Improving purchasing power offers hope

Despite this, there is a glimmer of hope that production may somewhat recover this year. With a projected growth of 0.5% due to improving consumer purchasing power, there appears to be light at the end of the tunnel. However, the pressure on raw materials remains a concern that could hinder recovery.

Wholesale stabilizes

Meanwhile, the wholesale sector is stabilizing in 2024 after a slight contraction of 1% in the previous year. The sector, which heavily relies on trade with foreign countries, seems to be less affected by the economic situation in Europe than feared. With the American market showing robust growth and inflation stabilizing in Europe, there are opportunities for the wholesale sector to achieve growth against expectations in the second half of the year.

ing.nl