January 2026 Update on the EU Industry Market

January 2026 Update on the European Industry Market by Roquette Market Analysts

In January 2026, the European market landscape continues to present significant challenges for processors across sectors. Industry players are facing the impacts of inflation, elevated freight costs, and ongoing economic uncertainty. 

These pressures are compounded by the complexities of decarbonizing assets to meet evolving sustainability and regulatory requirements, all while maintaining financial stability in an increasingly unpredictable commercial environment.

2026 Outlook: Cost Pressures and Economic Uncertainty Weigh on the Starch Industry

Despite the good availability of key agricultural raw materials, the combination of geopolitical tensions, evolving energy markets, regulatory constraints, and weak demand is creating an environment that remains highly challenging for processors.

Global grain markets are well supplied, and prices remain generally depressed, yet volatility persists. Quality inconsistencies, risks related to both non-GMO and GMO supply channels, shifting demand patterns, government interventions, and geopolitical uncertainties all contribute to ongoing instability.

The energy market remains another area of concern. Although gas prices have declined, they are still higher than pre-war levels and remain susceptible to ongoing volatility and upward risks. For French producers, exposure has increased following the end of the ARENH (Regulated Access to Historic Nuclear Electricity) scheme, further amplifying sensitivity to market fluctuations. Additionally, the reduction of CO2 allowances in the EU introduces extra costs for starch processors.

The European economy is set to grow modestly by 1.2% in 2026, but uncertainties tied to trade tensions and weakening demand continue to weigh on outlooks. Inflation is easing, yet confidence remains fragile, and consumers are becoming more selective in their spending. Overall demand is expected to remain moderate, which will directly challenge the starch industry as customer activity stays subdued and price sensitivity increases.

Strach Industry Dynamics - A Tight Outlook for Starch Processing

Performance within the starch industry is facing structural deterioration. Major starch producers are grappling with higher operational expenses due to increased freight costs, aging industrial assets that require significant maintenance, and the overarching challenge of investing in sustainability initiatives. 

The combination of economic uncertainty and the reshuffling of global trade flows has led to reduced market demand and destabilized established markets, creating additional pressure for local starch processors. As a result, the financial performance of many major producers has declined.

Market forecasts indicate moderate growth for starch derivatives leading into 2026, reflecting shifts in ecosystem dynamics and consumer sentiment. In Europe, demand for starches and derivatives is expected to rise modestly, putting additional pressure on starch processors.

Key Takeaways - Sustainability and Stability: Key to Future Industry Success

In summary, the European industrial market remains in flux, shaped by economic headwinds, changing energy policies, trade tensions, and evolving sustainability requirements. 

Despite these challenges, the moderate growth expected in starch derivatives reflects evolving market needs and shifting consumer behaviors, offering targeted opportunities for companies able to adapt quickly. 

Market analysts encourage continued vigilance and a focus on stable, sustainable growth to navigate the complex landscape going forward.