EU Market: September 2025 Update by Roquette Market Analysts

EU Starch Industry Faces Challenges Amid High Operating Expenses
 

Quality raw materials requirement
The current spot prices for raw materials in the starch production industry reflect the favorable production conditions in the Northern Hemisphere.

However, the long-term outlook for sourcing suitable quality materials presents significant challenges. In Europe, farmers are reluctant to sell their produce below production costs, leading to high carry costs.

Additionally, the quality assurance for key crops like corn and wheat is not guaranteed, complicating procurement strategies for starch producers.

Moreover, the expense associated with sustainable raw materials is rising annually, further intensifying the financial strain on processors. These factors contribute to a complex and costly landscape for securing quality raw materials, which is crucial for maintaining product standards and operational efficiency.

Sustainable energy

The energy market continues to be a significant concern for starch producers, with several factors contributing to elevated costs.

The gas market remains volatile despite recent declines in prices, which are still higher than pre-war levels and subject to upside risks due to Liquid Natural Gas supply and demand dynamics. 
The reduction of CO2 allowances under the EU's emissions trading system has introduced additional costs for starch producers. Compliance with these environmental regulations requires financial outlays that further strain the industry's financial performance.

Moreover, the termination of the ARENH (Regulated Access to Historic Nuclear Electricity) scheme has left French power more vulnerable to market fluctuations. As a result, energy costs for starch producers operating in France have surged, contributing to the overall cost burden.

These energy-related challenges compound the financial strain on the industry, making cost management a critical priority.

The Burden of Ageing Assets, Escalating Maintenance and Freight Costs
Elevated freight costs continue to be a significant operational expense. The logistics of transporting finished products have become increasingly expensive due to logistical constraints and the implementation of environmental surcharges on European shipments.

These costs, coupled with the broader impact of inflation affecting labor and materials, have created a challenging economic environment. Aging industrial assets in Europe necessitates substantial maintenance expenditures, further adding to the cost burden for starch processors.

Sustainability and Investment Needs amid an uncertain economic environment

Sustainability and Investment Needs
The push towards sustainability presents both a challenge and an opportunity for the starch industry. Decarbonizing assets to meet stringent environmental regulations in Europe necessitates substantial investments. These investments are crucial for long-term viability but pose immediate financial burdens, especially in an uncertain economic climate.

Economic Uncertainty and impact on starch derivatives

Economic uncertainty is dampening market demand for starch & starch derivatives. As consumers and businesses tighten their belts in response to unclear economic conditions, starch producers are experiencing reduced revenues. This decrease in demand further complicates the industry's efforts to stabilize and grow.

The forecasted stable GDP growth and inflation in the Eurozone announced by the IMF in 2026 with consumer’s confidence remaining low, is expected to limit demand growth prospects for starch & starch derivatives in the EU.

The EU starch industry’s performance is structurally deteriorating

Major starch producers are reporting deteriorating financial performance, highlighting the structural challenges within the industry.

The combination of high costs, regulatory pressures, and uncertain market conditions has created performance deterioration, leading to some starch mill closures as well as the shutdown of some ethanol and sugar plants in Europe.

This underscores the structural challenges that both the starch and sugar industries are facing and the need for strategic adaptations to navigate these multifaceted issues.

European Commission Initiates Anti-Dumping Investigation on Chinese Pea Protein Imports

The European Commission has initiated an anti-dumping investigation into imports of high-protein pea protein from China.  This action follows a complaint raised by the Ad Hoc Coalition of Union Pea Protein Producers.

The investigation aims to determine whether these imports are being sold at unfairly low prices and causing harm to the EU's pea protein industry. Both the US International Trade Commission and the Canadian Border Services Agency have officially demonstrated that Chinese pea proteins were heavily subsidized and dumped in the US and Canadian markets in 2023 and 2024. This practice is also suspected to be occurring in the European market.

The Commission will assess the evidence and may impose anti-dumping measures if warranted.

Timeline highlights:

The anti-dumping complaint was officially published on August 29th, with the investigation starting immediately. 
Provisional duties are expected by March/April 2026; definitive duties are expected by September 2026.
At the end of the procedure, the Commission will assess whether imports should be subject to retroactive definitive duties.
The complaint is now public: Legal Document

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Conclusion

In summary, the European starch industry is currently confronted by an array of interlinked challenges, including rising operational costs, heightened regulatory requirements, and uncertain market dynamics. The current environment demands resilience, adaptability, and strategic investment from all stakeholders. While the outlook remains complex, continued monitoring and informed decision-making will be essential as the industry seeks stability and sustainable growth into the future.