The deficit in the international exchange of agricultural goods and food increased noticeably from around 200 to 900 million euros in the first half of the year. Exports fell by 2.3 percent year-on-year to 8.3 billion euros, while imports rose by 6.1 percent to 9.2 billion euros. “The higher import share also creates a lot of pressure on our producers and manufacturers,” emphasized AMA Marketing Managing Director Christina Mutenthaler-Sipek in a press conference.
However, Austrian food is still highly valued globally: in terms of volume, domestic exports increased by 7.2 percent to 5.3 million tons in the first six months of this year compared to the same period last year. However, imports increased almost twice as much by 13.2 percent to 5.5 million tons.
The head of marketing at Agrarmarkt Austria cited high energy and raw material prices as well as inflation, which has recently calmed down, as challenges for domestic manufacturers. “The prices are immediately visible to the consumer, but the prices in production are not,” explained Mutenthaler-Sipek.
“You can rely on Germany”
The “naturalness and quality” of Austrian products are highly valued internationally. “We mainly deliver to the EU and neighboring countries.” Transport to more distant markets has become too expensive.
“Our frontrunner is Germany,” said the marketing boss. 38.4 percent of agricultural exports went there in the first half of the year. That was actually a slight increase compared to the previous year (37 percent). “We have had a positive foreign trade balance with Germany since 2020 – we were able to maintain this and even increase it slightly in the first half of the year,” said Mutenthaler-Sipek.
“You can rely on Germany – our German neighbors remain loyal to Austrian food,” noted the managing director of the food industry association in the Austrian Chamber of Commerce (WKÖ), Katharina Koßdorff. “This cannot be taken for granted, as the economic situation in Germany has deteriorated recently.”
“Cheese remains an export hit”
“Our export hit remains cheese,” said Mutenthaler-Sipek, referring to the neighboring country. However, in the first half of the year there was a decline in the value of the export volume by 2.7 percent to 250 million euros. The recognition of the AMA quality seal in the German animal husbandry label was an important step for deliveries to Germany. Comprehensive negotiations were carried out over a period of one and a half years. “German consumers appreciate our high product quality, and they also like to spend their holidays here, so they have an emotional connection.”
“Labor costs have increased more sharply”
In other markets, the development was less rosy – in terms of value, exports in six of the ten most important buyer countries declined in the first half of 2024 – despite increasing delivery volumes. Only in the direction of the Czech Republic did both export value (minus 8.9 percent) and export volume (minus 3.8 percent) decline. “We have lost competitiveness in many of these destinations,” said Koßdorff. In 2023 as a whole, Austria was still doing “quite well” compared to 2022 and only recorded a decline in exports from two countries.
“There is generally sand in the economic system – also in Austria,” said the industry spokeswoman. The industry is in recession for the third year. “This is not without consequences for the food industry.” The volume of iced tea, lemonades, energy drinks, animal feed and other food products sold fell by 0.6 percent in the first half of the year this year and is stagnating in value at a black zero. At the same time, food imports to Austria increased. According to economic data from the first half of the year, Austria’s food industry has slipped into recession.
“Labor costs have risen more sharply than in other countries,” emphasized the WKÖ trade association head. The industry, with around 200 companies and 27,000 direct employees, is now urgently demanding that the next federal government reduce non-wage labor costs and be exempt from “over-regulation”.
According to the information, the food industry had a production volume of 12 billion euros in 2023. This year in the first six months the value stagnated at 5.2 billion euros. “The exported quantity has increased slightly – the black zero is due to the successful delivery to Germany,” said Koßdorff. Three quarters of food and drink go to the EU and a quarter is exported to third countries. “Exports to the EU have increased slightly in value, while those to third countries show a double-digit decline.”
