The document provides an economic bulletin summarizing key highlights from Q4 of 2012 for the EU food and drink industry. It notes a decrease in EU manufacturing production and private consumption in Q4. Food and drink industry output fell 0.36% in the EU in Q4. Main agricultural raw material prices were mixed in Q4, with cocoa, coffee, oils and oilseed prices declining while grains and dairy prices increased.

1. Economic Bulletin
Q4 2012
At A Glance – Summary of Q4 highlights
EU food and drink industry evolution during Q4 2012 against major economic trends in the EU
EVOLUTION
OF MAIN
AGRICULTURAL
RAW MATERIAL
PRICES
Note 1: Except for imports and exports data which represent evolution of the current quarter compared to the same
quarter of the previous year, all other changes are represented with respect to the previous quarter of the same year.
Note 2: Unless otherwise specified, EU refers to the EU 27 in the text.
Economic trends in the EU
A general overview of the EU economic environment is given by data and trends shown in the table below. This
provides the background against which the analysis for the food and drink sector is carried out in the following
sections of the economic bulletin.
Table 1: Economic trends in the EU in recent periods
2011q4 2012q1 2012q2 2012q3 2012q4 2012q4
Quarterly variations Annual variations
(% change)* (% change)**
Manufacturing sector (NACE Rev. 2)
Industrial production index -1.1 -0.7 -0.8 0.4 -2.3 -3.3
All sectors
Private final consumption
-0.3 0.1 -0.2 0.0 -0.2 -0.3
(volume)
2012m8 2012m9 2012m10 2012m11 2012m12 2012m12
Monthly variations Annual variations
Retail trade volumes
(% change)* (% change)**
All sectors
0.3 -1.1 -0.7 0.3 -0.7 -2.0
Food, drinks and Tobacco
0.3 -0.2 -0.7 -0.3 -0.4 -1.2
* With respect to previous quarter/month
** With respect to the same period (either quarter or month) in the previous year
Source: Eurostat, March 2013
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2. The EU manufacturing industrial production index decreased (2.3%) in Q4 of 2012. In the same period, private
consumption (volumes) registered a slight decrease compared to the previous quarter, i.e. -0.2%. The yearly
comparison shows that the industrial production index decreased markedly in Q4 of 2012 compared to the same
quarter of the previous year, i.e. by -3.3%. Private consumption also decreased compared to the change registered
in the same quarter of 2011, but to a far lesser extent, i.e. -0.3%.
The (all sectors) volume of retail trade decreased by 0.7% in December (compared to November 2012), while
retail trade in food, drinks and tobacco decreased by 0.4%. Among the Member States for which data are
available, total retail trade fell in twelve, rose in eight and remained stable in Finland. The largest decreases were
registered in Romania (-3.2%), Spain (-2.2%) and Slovenia (-2.1%), and the highest increases in Luxembourg
1
and Poland (both +2.2%) and Estonia (+1.9%).
FOOD AND DRINK INDUSTRY INDICATORS IN Q4 OF 2012
1. Food and drink industry output index decreased
Food and drink industry output (production) in the EU fell by 0.36% in Q4 of 2012 compared to the previous
quarter. This is in line with the negative trend experienced by the manufacturing production index in the same
period (see the above section: Economic trends in the EU).
Q4 of 2012 represented a quarter of mixed performances in terms of production at the Member State level. Austria
(+1.36%), Czech Republic (+0.49%) and Sweden (+0.20%) reached positive production index growth rates,
whereas Bulgaria (-2.84%), Spain (-1.35%) and Finland (-0.75%) remained on their negative trend of the previous
quarter. The best performers whose production index growth rates even exceeded the positive growth rates of the
previous quarter include Ireland (+7.31%), Estonia (+1.41%) and Germany (+0.72%).
Table 2: Industry production index, quarterly growth
2012 Q3/2012 Q2 2012 Q4/2012 Q3
Member State (% change) (% change)
EU27 0.52 -0.36
Austria -0.16 1.36
Belgium 1.36 0.42
Bulgaria -1.62 -2.84
Czech Republic -0.37 0.49
Denmark 2.60 -1.07
Estonia 0.96 1.41
Finland -1.47 -0.75
Germany 0.05 0.72
Greece 0.21 -3.20
Hungary 0.58 -3.27
Ireland 1.23 7.31
Italy 1.27 -2.31
Latvia 1.65 -1.63
Lithuania 4.11 0.30
Netherlands 0.32 -0.03
Poland 1.44 0.90
Portugal 1.88 0.18
Spain -0.74 -1.35
Sweden -2.47 0.20
United Kingdom 0.34 -2.95
Source: Eurostat, Short-Term Business Statistics, NACE Rev. 2, March 2013
1
Eurostat news release, Euro indicators, 21/2013.
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3. 2. Evolution of main agricultural raw material prices
The following shows a mixed picture for raw material prices:
Oils and oil crops
Grains Dairy Soybean Rape
Cocoa Coffee Sugar Corn/ Soft WMP SMP Oil Bean Meal Seed Oil Palm
Maize wheat oil
Source: FoodDrinkEurope compilation
Cocoa and coffee
Quarterly developments: After having experienced positive growth of 9.3% in Q3 of 2012, cocoa prices
decreased on average by 1.7% in Q4 of 2012. A similar negative trend was also experienced by coffee composite
prices which fell by 9.6% in Q4 of 2012 against the 1% drop of the previous quarter.
Year-on-year developments: The year-on-year comparison shows that, the New York cocoa market recorded a
0.71% decrease with respect to Q4 of 2011. However, coffee composite prices were significantly lower than their
level in the same quarter of 2011, i.e. by 28.1%.
Cocoa NY market price and coffee world price
(monthly averages, current price, $/t)
6000
5000
4000
3000
2000
1000
0
Apr-07
Jul-07
Apr-08
Jul-08
Apr-09
Jul-09
Apr-10
Jul-10
Apr-11
Jul-11
Oct-11
Apr-12
Jul-12
Oct-07
Oct-08
Oct-09
Oct-10
Oct-12
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Cocoa price in $/t Coffee composite price in $/t
Source: International Cocoa Organisation (ICCO) and International Coffee Organisation (ICO), March 2013
Sugar
Quarterly developments: EU white sugar prices slightly increased (+2.0%) in Q4 of 2012. In the same quarter,
U.S. market price continued to decrease, i.e. by 19.4% compared to Q3 of 2012.
Year-on-year developments: On average, EU market price for white sugar was 12.4% higher in Q4 of 2012 than
the same quarter of the previous year whereas the U.S. market price was 37.4% lower than the average in Q4 of
2011. In comparison, the world sugar price was 12.6% lower than the average of the same quarter of 2011.
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4. White Sugar prices
(monthly averages, current prices, €/t)
1200
1000
800
600
400
200
0
Jul
Jul
Jul
Jan '10
Jul
Jul
Apr
Apr
Apr
Apr
Apr
Apr
Jan '08
Jan '09
Jan '11
Jan '12
Oct
Oct
Oct
Oct
Oct
Oct
July
Jan '07
World price US market price
Source: European Commission – Circa (Regulations (EC) No 562/2005 Article 6(1) and 479/2010 Article 2), United States
Department of Agriculture, March 2013
Grains
Corn maize prices
Quarterly developments: Contrary to the positive trend of the previous two quarters, EU maize prices slightly
decreased in Q4 of 2012 (compared to Q3 of 2012), i.e. by 0.9%. U.S. maize prices also decreased in the same
period, i.e. by 7.1%, falling from the record price level of the previous quarter which experts claimed to be a result
of drought and rising industrial demand.
Year-on-year developments: On average, EU maize prices were 31.4% higher in Q4 of 2012 than the same
quarter of the previous year. Similarly but to a lesser extent, U.S. maize prices were 24.0% higher in Q4 of 2012
than in the same quarter of the previous year.
Corn/maize market prices
(monthly averages, current prices, €/t)
300.00
250.00
200.00
150.00
100.00
50.00
Oct-08
Apr-07
Jul-07
Oct-07
Apr-08
Jul-08
Apr-09
Jul-09
Oct-09
Apr-10
Jul-10
Oct-10
Apr-11
Jul-11
Oct-11
Apr-12
Jul-12
Oct-12
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
DG Agri EU market price €/t FAO US market price €/t
Source: FAO and European Commission (DG Agri), March 2013
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5. Soft wheat prices
Quarterly developments: Similarly to the previous quarter trend but with a slower pace, EU maize prices
continued to increase in Q4 of 2012 (compared to Q3 of the same year) i.e. by 6.6%. U.S. maize prices decreased
during the same period i.e. by 2.3%.
Year-on-year developments: On average, EU maize prices were 33.9% higher in Q4 of 2012 than the same
quarter of the previous year. Similarly, U.S. soft wheat prices were 40.3% higher in Q3 of 2012 than in the same
quarter of the previous year.
Soft wheat market prices
(monthly averages, current prices, €/t)
300.00
250.00
200.00
150.00
100.00
50.00
Oct-10
Apr-07
Jul-07
Oct-07
Apr-08
Jul-08
Oct-08
Apr-09
Jul-09
Oct-09
Apr-10
Jul-10
Apr-11
Jul-11
Oct-11
Apr-12
Jul-12
Oct-12
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
DG Agri EU market price €/t FAO US market price €/t
Source: FAO and European Commission (DG Agri), March 2013
Dairy
Skimmed Milk Powder (SMP)
Quarterly developments: Similarly to the previous quarter trend but with a slower pace, EU SMP prices continued
to increase in Q4 of 2012 (compared to Q3 of the same year) i.e. by 11.8%. Moreover, for the first time since Q3 of
2009, average EU prices in Q4 of 2012 were higher than world market prices.
Year-on-year developments: The yearly comparison shows that, on average, EU SMP prices were 15.1% higher
in Q4 of 2012 than the same period in 2011.
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6. SMP
(monthly averages, current prices, €/t)
4500
4000
Q4 2012
3500
Q3 2009
3000
2500
2000
1500
1000
500
0
Jul
Jul
Jul
Jul
Jul
Jul
Apr
Apr
Apr
Apr
Apr
Apr
Oct
Oct
Oct
Oct
Oct
Oct
Jan '07
Jan '08
Jan '09
Jan '10
Jan '11
Jan '12
FAO €/t World market price CLAL €/t EU market price
CIRCA €/t EU market price R. 1234/07 €/t EU reference price
Source: FAO, CLAL consultancy (discontinued after January 2011 to the benefit of the European Commission source),
European Commission – Circa (Regulations (EC) No 562/2005 Article 6(1) and 479/2010 Article 2), March 2013
Whole Milk Powder (WMP)
Quarterly developments: Generally higher than world market prices since Q3 of 2010, EU WMP average prices
continued to increase in Q4 of 2012, i.e. by 9.6% from the previous quarter.
Year-on-year developments: The yearly comparison shows that, on average, EU WMP prices remained fairly
stable (- 0.1%) in Q4 of 2012 compared to the same quarter of 2011.
WMP
(monthly averages, current prices, €/t)
4000
3500
3000
2500
2000
1500
1000
Jan '08
Jul
Jul
Jul
Jul
Jul
Sep
Sep
Sep
Sep
Sep
Mar
Jan '09
May
Mar
Jan '10
May
Mar
Jan '11
May
Mar
Jan '12
May
Mar
May
Nov
Nov
Nov
Nov
Nov
World market price CLAL €/t EU market price CIRCA €/t EU market price
Source: FAO, CLAL consultancy (discontinued after January 2011 to the benefit of the European Commission source),
European Commission – Circa (Regulations (EC) No 562/2005 Article 6(1) and 479/2010 Article 2), March 2013
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7. Oils and oil crops
Quarterly developments: In Q4 of 2012 oils and oils crops prices experienced a general decrease. The decrease
in prices was most pronounced for Palm oil and Soybeans with a price decline of 18.5% and 10.1%, respectively.
Moreover, after having significantly increased during the previous quarter, prices of Soybean meal (+29.3%) started
to decrease in Q4 of 2012, i.e. by 6.9%.
Year-on-year developments: The yearly comparison shows that in Q4 of 2012 only Soybean meal, Soybeans and
Rapeseed prices were significantly higher than in the same quarter of 2011: by 64.6%, 23.7% and 4.7%
respectively. On the contrary Palm oil, Rape oil and Soybean oil were 21.0%, 5.8% and 4.6% lower in Q4 of 2012
than the same period of the previous year.
Oils and oilcrop prices
(monthly averages, current prices $/t)
1800
1600
1400
1200
1000
800
600
400
200
0
Apr-09
Apr-07
Jul-07
Oct-07
Apr-08
Jul-08
Oct-08
Jul-09
Oct-09
Apr-10
Jul-10
Oct-10
Apr-11
Jul-11
Oct-11
Apr-12
Jul-12
Oct-12
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
World Bank Soybean oil $/t World Bank Soybeans $/t
World Bank Soybean meal $/t World Bank Palm oil $/t
Source: World Bank and FAO, March 2013
3. Price developments in the food supply chain
Consumer prices (1.34%), producer prices (1.31%) and inflation (0.83%) all grew on average in Q4 of 2012.
EU27: Price developments in the food supply chain
145.0
140.0
135.0
130.0
125.0
120.0
115.0
110.0
105.0
100.0
2007M04
2011M04
2007M01
2007M07
2007M10
2008M01
2008M04
2008M07
2008M10
2009M01
2009M04
2009M07
2009M10
2010M01
2010M04
2010M07
2010M10
2011M01
2011M07
2011M10
2012M01
2012M04
2012M07
2012M10
Agricultural Commodity Price Producer Price
Source: Eurostat (Food supply chain monitor), March 2013
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8. 4. Slight increase in employment index in the EU food and drink industry
After having experienced a slight decrease in Q2 and Q3, the labour input index for the food and drink industry
increased (+0.28%) in Q4 of 2012. This is contrary to the performance shown by the (total) manufacturing sector
whose employment index decreased by 0.31% in the same period.
When looking at the industry breakdown, the food sector employment index increased by 0.1%, whereas the
beverages industry employment index increased by 1.02% in comparison with the previous quarter.
Labour input index (2010=100) : food and drink industry trends
compared to total manufacturing
110
105
100
95
90
85
80
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
Manufacturing Manufacture of food products Manufacture of beverages
Source: Eurostat (SBS), Nace Rev. 2, seasonally adjusted data, March 2013.
5. Food and drink industry turnover continued to increase
The food and drink industry’s turnover index increased by 0.88% in Q4 of 2012 compared to the previous quarter.
EU27: Turnover index (2010 = 100)
115.00
110.00
105.00
100.00
95.00
90.00
2012Q1
2007Q1
2007Q2
2007Q3
2007Q4
2008Q1
2008Q2
2008Q3
2008Q4
2009Q1
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q2
2012Q3
2012Q4
Manufacture of food products and beverages
Source: Eurostat (SBS), seasonally adjusted data, March 2013
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9. 6. Imported food prices increased in Q4 of 2012
Imported food prices registered a slight increase in Q4 of 2012, up to 0.49% from the previous quarter.
Food and drink import price index (2010 = 100)
115.00
110.00
105.00
100.00
95.00
90.00
85.00
80.00
2010Q2
2007Q1
2007Q2
2007Q3
2007Q4
2008Q1
2008Q2
2008Q3
2008Q4
2009Q1
2009Q2
2009Q3
2009Q4
2010Q1
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
Euro area
Source: Eurostat (SBS), March 2013
Exchange rates
In Q4 of 2012, the euro has appreciated against most major non-EU currencies in an environment of low volatility.
The table below gives details for the euro appreciation against the currencies of major trading partners.
Table 3: Evolution of quarterly average exchange rates
Q4 2012/ Q3 2012
1 EUR= 2012 Q3 2012 Q4
%
Australian Dollar 1.20 1.25 3.73
Canadian Dollar 1.24 1.29 3.24
Brazilian Real 2.54 2.67 5.17
Swiss Franc 1.20 1.21 0.37
Chinese Yuan Renminbi 7.94 8.10 2.05
Japanese Yen 98.30 105.12 6.94
New Zealand Dollar 1.55 1.58 1.87
United States Dollar 1.25 1.30 3.72
Pound Sterling 0.79 0.81 2.0
Source: ECB, bilateral exchange rates, March 2013
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10. 7. Trade: Both imports and exports increased in Q4 of 2012 year-on-year
The EU trade balance in food and drink products continued to improve during the Q4 of 2012 compared to the
same period of 2011. The export surplus amounted to nearly €6.5 billion, which marks an increase of €1.5 billion
year-on-year.
Imports Q4 of 2012 Exports Q4 of 2012
Total food and drink imports amounted to 17.1 Total food and drink exports amounted to €23.6
billion, i.e. 3.5% more compared to the previous billion, i.e. 9.6% more compared to the same period
year. However, a real import increase in terms of of 2011. Similar to Q3 of 2012, the value of exported
quantity and value was observed for only a limited drinks increased proportionately more than export of
group of alcoholic and soft drinks, and grain mill and other foodstuffs. Nonetheless, the year-on-year export
starch products. For a number of foodstuffs, the import growth registered for fish products, oils and fats and
growth in terms of value was linked to the price factor, spirits was also very positive (+30.2%, 21%, 20%
while the imported quantity was in fact lower than a respectively) and matched with a similar trend in terms
year ago. Finally, some products registered a real of exported quantities. Finally, other food and drink
import reduction both in terms of volume and value, products contributed also to the growth in export value,
e.g. dairy (-11.8% in value and -13.4% in volume), fruit despite witnessing a double-digit volume reduction. A
and vegetables (-7% in value and -14.4% in volume), single-digit volume reduction was registered for wines,
and less significantly, spirits and cider. beer and meat products.
Trade balance in € million
Q4
2011 2012
Total of Food and Drink 4,996 6,482
Meat products 1,059 1,306
Fish and sea food products -3,339 -2,959
Processed fruit and vegetables -853 -591
Oils and fats -2,694 -3,171
Dairy products 2,081 2,124
Grain mill and starch products 347 311
Bakery & farinaceous products 699 814
Other food products 2,130 2,310
Prepared animal feed 508 586
Drinks 4,983 5,714
FoodDrinkEurope - represents the European food and drink industry - the leading industrial sector and major EU employer and
exporter. FoodDrinkEurope’s role is to represent the food and drink industry’s interests, at the level of both European and
international institutions. FoodDrinkEurope’s membership consists of 24 national federations and 3 observers, 25 European
sector associations and 18 major food and drink companies.
For further information, please contact:
Lisa McCooey, Communications Director / Deputy Director General. Tel: + 32 2 508 10 24 -
l.mccooey@fooddrinkeurope.eu
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