Summary
Economic trends in the EU
1. Food and drink industry output index increased
2. Evolution of main agricultural raw material prices
3. Price developments in the food supply chain: producer prices continued to peak above both consumer prices and overall inflation in Q3 of 2012
4. Slight decrease in employment index in the EU food and drink industry
5. Food and drink industry turnover index started to increase again
6. Confirming previous quarters’ trends, imported food prices continued to rise
Trade: Both imports and exports increased in Q3 of 2012 year-on-year
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2. Evolution of main agricultural raw material prices

The following shows a mixed picture for raw material prices:

Source: FoodDrinkEurope compilation


Cocoa and coffee

Quarterly developments: After a declining trend since Q2 of 2011, cocoa prices drastically changed their performance and increased on average by 9.3% in Q3 of 2012. A similar positive trend that was also experienced by coffee composite prices which even if they continued to decrease they did so at a much slower pace since they fell by 1.0% in Q3 of 2012 against the 14% drop of previous quarter.

Year-on-year developments: The year-on-year comparison shows that, as it was also in the previous quarter, the New York cocoa market recorded a 17.8% decrease with respect to Q3 of 2011. Similarly, coffee composite prices were also lower than their level in the same quarter of 2011, i.e. by 27.8%.


cocoa NY market price and coffee world price.jpg
Source: International Cocoa Organisation (ICCO) and International Coffee Organisation (ICO), December 2012


SUGAR

Quarterly developments: Contrary to the previous quarter trend (+1.9%) and world prices trend for Q3 of 2012 (+4.6%), EU white sugar price remained rather stable (-0.1%) in Q3 of 2012. In the same quarter, U.S. market price continued to decrease, i.e. by 11.1% compared to Q2 of 2012.

Year-on-year developments: On average, EU market price for white sugar was 26.5% higher in Q3 of 2012 than the same quarter of the previous year whereas the U.S. market price was 17.7% lower than the average in Q3 of 2011. In comparison, the world sugar price was 8.8% lower than the average of the same quarter of 2011.


white sugar prices.png
Source: European Commission – Circa (Regulations (EC) No 562/2005 Article 6(1) and 479/2010 Article 2), United States Department of Agriculture, December 2012


GRAINS

Corn maize prices

Quarterly developments: Similarly to the previous two quarters’ trend but with a much higher pace, EU maize prices continued to increase in Q3 of 2012 (compared to Q2 of 2012), i.e. by 11.6%. U.S. maize prices also increased in the same period, i.e. by 26.6%. This important increase in U.S. prices was due to the drought which occurred in the country and a rising industrial demand domestically.

Year-on-year developments: On average, EU maize prices were 1.3% higher in Q3 of 2012 than the same quarter of the previous year. Similarly but to a much greater extent, U.S. maize prices were 24.1% higher in Q3 of 2012 than in the same quarter of the previous year.

corn maize market prices.jpg

Source: FAO and European Commission (DG Agri), December 2012

Soft wheat prices

Quarterly developments: Similarly to the previous quarterly trend but again with a much higher pace, EU maize prices continued to increase in Q3 of 2012 (compared to Q3 of the same year) i.e. by 11.6%. U.S. maize prices also increased importantly, i.e. by 36.3%.

Year-on-year developments: On average, EU maize prices were 18.1% higher in Q3 of 2012 than the same quarter of the previous year. Similarly, U.S. soft wheat prices were 40.2% higher in Q3 of 2012 than in the same quarter of the previous year.




Source: FAO and European Commission (DG Agri), December 2012


DAIRY

Skimmed Milk Powder (SMP)

Quarterly developments: After having experienced a declining trend in the period Q4 of 2011 to Q2 of 2012, EU SMP prices started to increase again in Q3 of 2012, i.e. by 9.9%. Moreover, for the first time since Q3 of 2010, average EU prices in Q3 of 2012 were higher than world market prices.

Year-on-year developments: The yearly comparison shows that, on average, EU SMP prices were 4.7% higher in Q3 of 2012 than the same period in 2011.

SMP.png
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), December 2012

Whole Milk Powder (WMP)

Quarterly developments: Generally higher than World Market prices since Q3 of 2010, EU WMP average prices started to increase again in Q3 of 2012, i.e. by 3.7% from the previous quarter.

Year-on-year developments: The yearly comparison shows that, on average, EU WMP prices were 9.8% lower in Q3 of 2012 than the same quarter of 2011.

WMP.png

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), December 2012


OILS AND OIL CROPS

Quarterly developments: In Q3 of 2012, oils and oil crop prices experienced a general increase (with the only exception of Palm oil saw a decrease by 8.7% continuing from the previous trend performance) with some important adjustments in several categories. Among the most important ones, we find a 29.3% and a 17.6% increase of Soybean meal prices and Soybeans, respectively. Moreover, after having decreased significantly during the previous quarter, prices of Soybean oil (-8.4%), Rape oil (-14.8%) and Rapeseeds (7.4%) started to increase again in Q3 of 2012, i.e. by 1.8%, 2.3% and 1.1% respectively.

Year-on-year developments: the yearly comparison shows that in Q3 of 2012 only Soybeans and Soybean meal prices were significantly higher than the same quarter of 2011: by 21.4% and 58.1% respectively. On the contrary Soybean, Palm and Rape oils together with rapeseed were 5.0%, 8.0%, 8.7% and 1.5% lower in Q3 of 2012 than the same period of the previous year.

oils and oilcrop prices.jpg
Source: World Bank and FAO, December 2012





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