Lower commodity prices have provided some relief for food producers and processors since 2014. Within the EU food market the competition between European food businesses is increasing, with efficiency and low production costs being key strengths for sustaining a competitive edge.
The impact of Russia’s ban on imports of food from the EU has been felt by some subsectors (especially dairy and fruits and vegetables). While seriously affecting Russian food importing businesses, it has so far not led to severe repercussions or sharply increasing payment delays and insolvencies for EU food companies. In many cases businesses were able to find alternative export markets.
In general, the food sector is currently performing reasonably well, with a rather stable credit risk situation in many countries. However, given that profit margins of many companies are small, the food sector remains susceptible to downside risks, such as volatile commodity prices, sudden economic downturns and health issues.
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