The Federation of the German Food Industry (BVE) presented its current economic report in May. It recorded a price-adjusted increase of 1.5% in sales for the German food industry in February 2024 compared to the previous year. Domestic sales rose by 3.4%, while foreign sales decreased by 1.9%.
The total revenue of the industry amounted to 18.6 billion euros, representing a nominal increase of 0.4% compared to the previous year. Revenue in the domestic market amounted to 12.0 billion euros (+2.2% compared to the previous year), and revenue in foreign business amounted to 6.6 billion euros (-2.7% compared to the previous year). Export prices fell by 0.8%, and producer prices domestically by 1.2%. The calendar and seasonally adjusted production index decreased by 0.1%.
Fluctuations in agricultural raw material costs and energy costs influence the entire value chain and ultimately the sales prices of the food industry. Prices also develop according to fluctuations in supply and demand.
In February, the producer prices of agricultural products increased by 1.2% compared to the previous month. Compared to the same month last year, there is a decrease of 5.7%, with the base effect to be considered. Compared to the "pre-crisis level" in February 2020, the value is still just under 33% higher. The FAO Food Price Index rose by 119.1 points in April, an increase of 0.3% from the previous month, and is now 7.4% below the level of the previous year.
As reported by the Federal Statistical Office, producer prices for industrial products fell in March with the prices for natural gas (liquefied or gaseous) decreasing by 6.6% compared to the previous month. The prices for crude oil rose by 3.0%, and for lignite by 7.9%. Despite the "energy crisis," the price of natural gas is still more than 183% above the level of February 2020, that of crude oil 39%, and that of lignite well 42% above the pre-crisis level.
Downturn Mood in the Industry
The food industry harbors concerns about a sustained economic stagnation. This is evidenced by the latest data from the ifo Business Climate Index. The balance of the business climate recorded a decline of 7.5 points to 96.0 points, sending it below the neutral value of 100. The balance for business expectations (for the next six months) also fell to 95.6 points, with 21.8% of surveyed manufacturers expecting a negative development and 12.5% a positive one.
Consumer sentiment has also been at a low level for some time with little clear trends. Compared to the previous month, the consumer climate index rose by 1.5 points in April 2024 and now stands at -24.2 points. A forecast by GfK consumer researchers predicts a further increase of 3.1 points for May. Compared to the previous month, general consumer prices in March rose by 0.4%, compared to the previous year by 2.2%.
