Packaging materials price increases in April 2026 are primarily driven by factors originating outside the packaging market. The main driver has been rising prices for various raw materials, which were influenced by global energy trends and geopolitical developments. Additionally, inflationary pressures resulted in increased costs throughout the production chain.

On the London Metal Exchange (LME), aluminum prices rose 6% month over month (MOM) and 47% year over year (YOY). This was caused by military activity in the Middle East, which led to a collapse in aluminum supplies from the region, creating a market deficit from March onward. Rising primary aluminum prices directly impacted aluminum packaging prices. In the US, aluminum foil increased 2.9% MOM, while aluminum cans rose 4.4% MOM. In Europe, aluminum foil climbed 2.7% MOM, with aluminum cans up 2.6% MOM.

Plastic packaging materials experienced even more significant growth, though this varied considerably between markets. In Europe, polypropylene (PP) prices rose 43.4% MOM, high-density polyethylene (HDPE) increased 39.2% MOM, and polyethylene terephthalate (PET) climbed 33.7% MOM. On the US market, growth was more modest but still substantial, with prices rising 6-7% MOM depending on the type. This regional contrast reflects the significantly higher dependence of European plastic production on naphtha and ethylene supplied through the Strait of Hormuz. The de facto closure of the Strait of Hormuz resulting from Middle East conflict triggered sharp price increases for these hydrocarbons in Europe.

For paper packaging production in Europe, the key driver was accumulated pulp price increases from the start of 2026 and waste paper prices rising 15-30% in April depending on grade. As a result, consumers anticipating further price increases stepped up purchases, and suppliers rapidly raised prices 3-5% MOM depending on grade, taking advantage of the situation. In the US, suppliers also implemented price increases after a prolonged pause. Linerboard rose 4.6% MOM, while testliner climbed 5.4% MOM.

Nevertheless, packaging materials consumption remains relatively weak, only partially explaining such significant price increases. Weakness is particularly evident in the beverage industry. In the Eurozone, soft drink and bottled water production in the first quarter of 2026 declined 0.2% YOY, while alcoholic beverage production fell 3-5%. In the US, soft drink production remains 0.9% below year-ago levels. Only in China did soft drink production grow 2% in the first quarter, with beer production up 4.2%.

Food production demonstrates more positive dynamics. In the Eurozone, it accelerated to 0.8% YOY for the first quarter, supported by 1.7% growth in March. In the US, food production grew 0.5% in the first quarter, representing a slowdown compared with 2025, when growth was 1.4%.

Retail sales present a mixed picture. In the US, retail sales accelerated to 4.0% YOY in March, supported by higher fuel prices and tax refunds, although real consumption growth remained significantly weaker due to inflation. In the Eurozone, retail sales slowed to 1.7% YOY in February from 2.1% in January, reflecting weakened consumer sentiment. In China, retail sales decelerated to 1.7% YOY in March from 2.8% in January-February, indicating softer consumption trends.

Thus, weak consumption in most regions does not align with the magnitude of packaging price increases. This confirms that the primary factor driving price dynamics is global raw materials and energy prices, not domestic demand for packaging materials.

Carbon dioxide is rarely top of mind for food and beverage procurement teams—until it isn’t available.

CO₂ is best known for carbonating beer and soft drinks, but its role in the food system runs far deeper. It is used to stun animals before slaughter, to package meat and seafood, to ripen vegetables in greenhouses, to cool dough during processing, to freeze and transport food as dry ice, and to regulate temperatures in cold chains. Much of this use happens upstream, outside the direct control of brand owners or retailers.

Why is CO2 important	Impact on Food & Beverage Businesses
Dependency on ammonia/ethanol production	Unpredictable supply, price volatility
Energy price volatility	Sudden disruptions, procurement risk
Shift to biogas/decentralized sources	New logistics, higher costs, supply diversification
Quality/certification challenges	Need for testing, parallel supply chains
Market perception/reputational risk	Hesitancy to adopt new sources, limited supply options

That matters because CO₂ supply in Europe has a long history of disruption.

Unlike many food inputs, merchant CO₂ is not produced primarily in response to demand from the food industry. Roughly three quarters of Europe’s supply is captured as a byproduct of other industrial processes—most notably ammonia and ethanol production. When those plants shut down because energy prices are high or margins deteriorate, CO₂ supply can disappear with little warning, even if food-sector demand is strong.

Previous gas price spikes have shown how quickly this can ripple through food markets. Shortages of CO₂ have led to allocation and force majeure declarations, disrupting meat processing, beverage production, and more. Seasonal maintenance at ammonia plants also tends to reduce availability during the summer, precisely when beverage demand peaks.

Not everyone in the food and beverage value chain feels this exposure equally. Some companies buy CO₂ directly and are well aware of the risk. Others rely on suppliers that use CO₂ in their own operations, and therefore may not realize how exposed they are until something breaks.

Consider a simple example: you sell pasta with pork ragù. Your meat processor likely used CO₂ for humane stunning before slaughter. Your tomato and herb suppliers may rely on CO₂‑enriched greenhouses to accelerate growth and control quality. Your pasta manufacturer may use CO₂ for dough cooling or temperature control during processing. None of those uses may appear on your own bill of materials, but all of them are vulnerable to the same upstream supply constraints. In the event of a CO₂ disruption, shortages are therefore unlikely to be isolated to a single product category; they can cascade across the food supply chain.

Understanding that risk requires more than knowing that CO₂ is used. It requires some basic horizon‑scanning: where merchant CO₂ comes from, why it has been disrupted in the past, and how that supply chain is now changing.

Commodity Category	Primary CO2 Dependency	Operational Mitigation Feasibility	Financial Risk Level
Fresh Poultry & Pork	Stunning / Processing line gas	Low	Critical
Beer & Soft Drinks	Carbonation & Counter-pressure filling	Medium	Critical
Bagged Produce & Meals	Modified Atmosphere Packaging (MAP)	Low	High
Industrial Bakery	Shelf-life extension packaging	Medium	High
Frozen / Cold-Chain	Dry ice production	High	Moderate

Because in Europe, that change is already underway. Faced with repeated disruptions linked to ammonia and ethanol production, industrial gas suppliers are working to diversify sourcing and build resilience into their networks. One of the most important shifts is the growing role of biogenic CO₂, particularly CO₂ captured from biogas upgrading. These sources tend to be smaller and more decentralized than traditional ammonia plants, reducing reliance on a handful of large facilities and on fossil‑fuel economics.

At the same time, this transition raises new questions for food and beverage buyers. Emerging CO₂ sources can introduce unfamiliar quality‑assurance considerations, certification gaps, and perception challenges, even when the gas meets food‑grade specifications. In practice, many suppliers and customers are still working through these issues on a case‑by‑case basis.

Current events underline why this matters. Disruption in fertilizer and energy markets has historically been a trigger for CO₂ shortages in Europe. So far, the latest bout of geopolitical instability has not materially curtailed European CO₂ availability, and market participants do not see immediate disruption as inevitable. But the system remains exposed, particularly over the next 12–18 months, as the transition toward more diversified supply continues.
For food and beverage procurement teams, the takeaway is not to expect imminent shortages, but to recognize CO₂ as a critical, if often invisible, input. Asking where it comes from, how suppliers manage risk, and how new sources fit into existing specifications can make the difference between being caught off‑guard and being prepared.

The accompanying white paper explores these dynamics in detail, drawing on discussions at gasworld’s European CO₂ Summit – access here.

Image source: Adobe

Global steel production in the first quarter of 2026 continued its downward trend, but the structure of the decline proved more revealing than the contraction itself. In March 2026, steel output according to World Steel Association (WSA) fell 4.2% year over year (YOY), with the decline concentrated in Asia and particularly in the Middle East, while the US demonstrated growth. Overall, for the first two months of 2026, global steel production fell 2.3% YOY.

China remains the key driver of the decline, where production has fallen YOY for 11 consecutive months. Based on Q1 2026 results, China produced 54% of global steel and reduced output 4.6% YOY, reflecting weakness in the construction sector and restrictive policies toward excess capacity.

Despite demand recovery for steel produced within the EU, production in March still declined 4.6% YOY, confirming persistent pressure from limited end-user demand. Among the largest steel-producing countries, Germany is recovering production. At the same time, sources indicate that the Carbon Border Adjustment Mechanism (CBAM) significantly reduced imports, down 18% YOY in January 2026, so domestic steel production is expected to recover not only in Germany.

The US continues to grow steadily against the backdrop of import tariffs and recovery in domestic steel demand. Steel output in the US in the first quarter of 2026 increased 5.7% YOY. This widens the gap between the US and the rest of the world, where production overall is declining.

The most dramatic change occurred in the Middle East. In March, production fell 33.5% YOY, which sharply contrasts with growth in January and stability in February. This dynamic directly points to the impact of military conflict, which disrupted both domestic consumption and production chains in the region.

This production trend directly intersects with demand forecasts. WSA in its updated forecast from April 2026 expects global demand in 2026 to grow just 0.3%, substantially lower than previous expectations, with Middle East weakness and continued decline in China named as key negative factors. At the same time, demand growth outside China persists, and developed economies demonstrate moderate recovery, which aligns with production growth in the US and partial stabilization in Europe.

Thus, the market enters a fragmentation phase. China continues to drag down global metrics, Europe remains weak, the US is forming a local growth point, and geopolitics heightens volatility through sharp production and demand declines in the Middle East, which overall keeps the market under pressure and prevents transition to full recovery.

Image source: Getty

Rising global nitrogen fertilizer prices will weigh on farmer behavior across the EU, but Expana expects the impact to be much more pronounced in the next wheat crop cycle than in the current one.

At this stage, there are no immediate nitrogen shortages in the EU. Farmers have already secured most of their requirements earlier in the campaign, partly in line with seasonal buying patterns and partly to avoid higher costs linked to recent EU trade policy changes.

However, higher prices are narrowing options for the next crop cycle. The immediate risk is that some EU farmers may slightly reduce their application rates for the 2026 crop, as they look to manage exposure to higher-priced inputs ahead of the 2027 harvest.

Wheat crop quality in focus for 2026/27 marketing year

The main impact of reduced application rates for the 2026/27 crop is likely to be on quality rather than yields. Nitrogen remains a key driver of protein content, particularly for durum and milling wheat. Lower applications could weigh on wheat protein levels, even if crop yields hold.

From a market perspective, this would tighten the availability of higher-quality milling wheat within the EU. It could also widen spreads between milling and feed wheat, particularly if quality premiums strengthen.

For now, Expana is keeping its 2026 grains production outlook largely unchanged as weather is expected to play a much larger role in determining yields at this stage of the crop cycle.  

2027/28 marketing year outlook: acreage and yield risks build

But looking further ahead, the outlook becomes even less supportive for EU grains production. If nitrogen prices remain elevated into the next buying cycle, Expana expects pressure on farm margins to increase.

Those higher input costs would likely deter planting in more marginal EU crop areas, which would reduce overall acreage for the 2027 crop. At the same time, more uneven fertilizer application could start to affect EU crop yields more directly.

While Expana will not start publishing its 2027 production estimates until September 2026, significant losses to EU grain yields and acreage can be expected if fertilizer prices hold firm.

Global context and longer-term risks

Globally, production risks for the 2026/27 marketing year are more acute in parts of the Southern Hemisphere, where sowing for the next crop begins in H2 2026 and farmers have had less time to secure inputs.

Over the longer term, attention is likely to extend beyond nitrogen. Phosphate markets present a more structural risk, with supply of key feedstocks such as sulfur and sulfuric acid concentrated in geopolitically sensitive regions, including those linked to flows through the Strait of Hormuz.

Crops can tolerate lower phosphate application for a limited period, but any prolonged constraint would become a more significant headwind to crop production.

For now, however, nitrogen remains the main factor shaping farmer decisions and near-term crop outcomes across the EU and elsewhere.

Image source: Adobe

The current conflict in the Middle East is worrying fertilizer market participants around the world, as well as sparking fears of higher food prices. Two key categories -nitrogen fertilizers and phosphate fertilizers – are at the center of this disruption.

Nitrogen fertilizers (notably urea and ammonia) are synthesized through energy-intensive processes that rely heavily on natural gas. Because of this, nitrogen production is clustered near low-cost gas hubs, particularly around the Persian Gulf. The current closure of the Straits of Hormuz to shipping is impeding a corridor through which 34% of the global urea trade and 23% of the global ammonia trade passed in 2024, cutting off critical manufacturers like Iran, Qatar, Saudi Arabia, the UAE, and Bahrain.

Beyond interrupting transport, the conflict’s disruption of the natural gas market is impacting nitrogen fertilizer production. Between 27 February and 9 March, LNG prices rose 74%, resulting in an estimated 60% increase in ammonia production costs in just ten days. And in the Gulf, a facility described as the world’s largest single-site urea exporter (representing up to 14% of the world’s supply according to its own literature) has had to halt production after an Iranian attack on the Qatari natural gas facility supplying it.

Meanwhile, phosphate fertilizers rely on sulfuric acid, which is used to manufacture phosphoric acid, an essential input for DAP, MAP, and other phosphate products (including non-fertilizer products found in other parts of the agri-food industry, like feed phosphates, which are nearly universally used in modern animal production systems).

Sulfuric acid comes primarily from oil refining, meaning that nearly 50% of global sulfur flows pass through the Strait of Hormuz, along with around 18% of the global trade in MAP and DAP, two leading phosphate fertilizers. Or at least, they did when the Strait was open.

In the case of both categories, these complications are coming in the context of already tight markets. High nitrogen fertilizer prices had already been a political rallying point for farmers in the EU, for example, causing the bloc’s decision-makers to seek mechanisms to ease the pain, while high sulfur prices had led The Mosaic Company to curtail production of single super phosphate (SSP) in Brazil in December and January.             

Reactions from around the world

Several regions with large agricultural footprints have responded to the looming possibility of tighter fertilizer markets:

• China has announced it would release fertilizers from national commercial reserves in order to ensure sufficient supply for spring planting, reports Reuters. It should be noted that the country’s determination to keep affordable fertilizers available for its domestic market has long driven it to intervene, including by imposing curbs on fertilizer exports, something which had already been contributing to the underlying tightness in phosphates.
• India has invoked a law allowing for the allocation of natural gas to certain priority applications, including fertilizer production (in second place), amid production shutdowns at some fertilizer plants. The country is the largest importer of urea, and also has extensive domestic production.
• Brazil’s ministry of agriculture has warned of an “extremely high risk” to the 2026-2027 crop from the fertilizer situation in a document reported on by the country’s financial press. The country, an agricultural export powerhouse, is nonetheless extremely dependent on fertilizer imports, which accounted for 85% of its consumption, according to the Rio Times.
• In the United States, the American Farm Bureau Federation claimed that urea prices had reached $579.75 by March 6, up 25% since the end of February when hostilities in the region began. “These developments come just as fertilizer and fuel demand rises ahead of spring planting,” it observed, noting that about 50% of nitrogen applied to corn, 28% applied to cotton and 42% applied to spring wheat is typically applied in the spring. It has also shared anecdotal reports of farmers seeking to switch from fertilizer-intensive corn to nitrogen-fixing soy. 

Image source: Adobe

Sulfur Prices Surge in China Amid Middle East Tensions

Sulfur prices in China jumped sharply this week amid escalating geopolitical tensions in the Middle East. The Middle East is a major supplier of sulfur globally and China relies on imports from countries such as Iran and the United Arab Emirates. Key trade lanes have been cut off, limiting supply and triggering concerns that higher sulfur costs will cascade into downstream animal nutrition inputs, sources shared.  

The move is already reflected in the sulfuric acid market, as production cost pressure builds up for sulfate-based trace minerals such as manganese and zinc sulfate, according to a Chinese producer.  

A China-based trader shared that Chinese sulfur values rose RMB 160/MT from February 27 to this Tuesday and increased a further RMB 150/MT by close of business (COB) March 4, representing an 8% increase in less than a week. 

A Chinese trace mineral producer stated that domestic Chinese sulfur values have risen RMB 200/metric tons (MT) since the beginning of 2026 in the Southwest region of China.  

“It is quite concerning,” the exporter said, adding that expectations for further increases have lifted sulfuric acid prices, directly impacting manganese and zinc sulfate production costs.  

A Brazilian manganese sulfate producer echoed the view, cautioning that a sustained sulfur price rally in China could quickly tighten margins across the sulfate market and compel near term FOB price hikes. 

Global Supply Constraints and Policy Impacts

While the Middle East conflict has accelerated the latest price uptick, the market is no stranger to policy-driven and supply-side constraints. 

Global sulfuric acid values have been on a sharp upward trend since the beginning of the year as the Chinese government introduced a 700,000 MT export quota for the January to April 2026 period, nearly 50% lower than the same period in 2025. Sources shared that priority would be given to ensuring Chinese domestic supply and that exports may be permitted in limited quantities when the export price exceeds the domestic price. 

Meanwhile, Russian exports remain absent from international markets, with an export ban in place until March 31. 

A significant global sulfur supply shock emerged in anuary 2026 when Tengizchevroil (TCO) was forced to halt production at its Kazakhstan’s Tengiz oilfield after a power station fire. The force majeure on crude exports from the plant has not yet been lifted, creating a current supply lag before sulfur volumes return to the market. 

Brazil’s Domestic Production Challenges

In Brazil, the cost and availability picture has been further complicated by reduced domestic sulfuric acid supply.  

A Brazilian copper sulfate producer said conditions have become “complicated” since Yara stopped producing sulfuric acid locally, leaving only three other producers operational. Some of those remaining suppliers are integrated into value-added products such as feed phosphates and trace minerals, limiting availability for other sulfate producers, the source said. 

Imports have “traditionally not been very reliable,” the producer added. 

Yara confirmed it began hibernating its phosphate fertilizer and sulfuric acid production at its Cubatão and Paulínia facilities back in February 2025, with the process originally expected to conclude by the end of 2025.  

Market sources now report they are no longer receiving material from Yara. The company said the decision aligns with its long-term strategy to focus on nitrogen-based fertilizers and sustainable solutions instead. 

Impact on Feed Phosphate Markets

Rising sulfur costs are also impacting feed phosphates by increasing the incentive for phosphate suppliers to lift prices. Similarly to sulfuric acid, China has temporarily halted DAP, MAP and NP exports until August 2026, pointing to tighter global phosphoric acid availability in 2026. 

Some feed phosphate producers reported in February that phosphoric acid contract costs rose by $20–$30/MT, despite a rollover of the first Q1 2026 global contract between Coromandel International Limited and Nutrien. 

In Brazil, DCP buyers reported difficulty obtaining Q2 prices last week as offers from major suppliers were absent. 

Multiple sources flagged the risk of a Q2 price jump of 20–34% amid higher sulfur costs and ongoing local sulfuric acid tightness. These developments were already underway prior to the Middle East conflict, sources now expect continued uncertainty on Q2 feed phosphates prices.  

Meanwhile, DCP stock levels continue to be reported as adequate, and buyer behavior muted as Chinese import volumes were above historical averages in 2025. 

Some Chinese DCP manufacturers were yet to release new offers to the Brazilian market this week after the Chinese Lunar New Year holiday closure. Other sellers had decided to pause quotations and take on fresh orders following the Middle East conflict, sources said.

Image source: Adobe

Procurement activity in industrial raw materials accelerated sharply in Europe at the start of the week as market participants reacted to rising risks to maritime logistics between Asia and Europe. Traders across the metals supply chain reported a noticeable surge in prompt purchasing activity, with buyers attempting to secure any material that can be delivered immediately. Market participants are increasingly focused on protecting inventories amid concerns that supply chains may again face disruptions similar to those seen during the Red Sea crisis in 2024.

The shift in behaviour follows renewed security concerns in the Red Sea after Yemen’s Houthi movement signalled a resumption of attacks on vessels transiting the region. Several incidents have reportedly been recorded in recent days, although no confirmed direct hits on commercial vessels have been reported so far. Despite the limited physical damage, the threat itself has already affected shipping patterns. A growing number of carriers are avoiding the Red Sea and Suez Canal corridor, instead rerouting vessels around the Cape of Good Hope.

The rerouting significantly increases transit times between Asia and Europe and introduces uncertainty into vessel scheduling. According to trading sources, logistics providers have already begun adjusting freight rates. Forwarders have reportedly added roughly $2,000 per container to existing freight costs on routes from Asia to Europe. The increase reflects both higher fuel consumption due to the longer voyage and tightening vessel availability as ships remain tied up on extended routes.

Within the metals sector, the aluminum market has already been among the most affected. Around 8% of global aluminum exports originate from the Gulf region, with a significant share of these shipments moving through the Strait of Hormuz. Disruptions in the region are already increasing tension in the market, as Middle Eastern aluminum represents an important source of supply for global consumers, including Europe.

An additional factor is Qatar, which remains one of the key global suppliers of direct reduced iron (DRI) and hot briquetted iron (HBI). These materials are widely used as feedstock for low carbon steel production and are becoming increasingly important as the steel industry moves toward lower emission technologies. Existing disruptions to the flow of this raw material are increasing the risk of shortages in the market, as alternative sources remain limited while demand from steel producers remains firm.

Military action in the region could cause a correction in the base metals and steel market, according to market sources. However, the global impact is limited due to the region’s low share in most metals markets.

Iran has traditionally supplied iron ore and semi-finished steel products, mainly to China. However, any shortfall in supplies to China from Iran could easily be offset by increased utilization of Chinese steelmaking capacity, which has been reduced in recent years. As a result, market sources expect only a moderate and insignificant impact on the market.

Tensions in the region significantly increase the risks for ships passing through the Red Sea. Some carriers transporting metals from Asia to Europe will likely change course and sail around Africa, increasing delivery time to European ports. However, market sources indicate that sufficient inventory exist in the market and longer delivery times are unlikely to trigger heightened demand and higher metal prices in March.

It is important to note that the Middle East region produces about 9% of global primary aluminum supply. The suspension of shipping in the Strait of Hormuz and the Red Sea could significantly disrupt logistics, sources state.

In this case, participants suggest that the global aluminum market, which is already in a state of deficit, could face even greater reductions in supply. Moreover, market players point out that an escalation of the conflict could lead to production stoppages, which would result in a fundamental reduction in supply.

EU farmers and agri-co-op union Copa-Cogeca has warned of a “dramatic and unprecedented collapse in EU nitrogen fertilizer imports” since the EU’s Carbon Border Adjustment Mechanism (CBAM) took effect at the beginning of 2026.

The organization says that January 2026 imports registered by the European Commission amounted to a mere 16% of the prior year’s figures, or 179,877 tonnes compared to January 2025’s 1.18 million tonnes.

Copa-Cogeca says that the EU traditionally imports over 30% of its nitrogen fertilizer.

“A reduction of this magnitude cannot be absorbed without consequences. It poses a direct threat to the stability of agricultural production across the EU, destabilising markets by triggering anticipatory behaviours, as seen in December 2025 just prior to the mechanism’s implementation,” it claims.

Spike in late 2025 imports before implementation

December 2025 imports, meanwhile, amounted to some 2.53 million tonnes, around 107% higher than the five-year average of 1.22 million tonnes. In other words, there was clearly significant stocking-up taking place in December, before the new carbon tax became effective.

Fertilizers Europe, an industry group representing the continents’ own manufacturers, notes that this figure represents nearly 30% of the EU’s annual consumption of nitrogen fertilizers (8.3 million tonnes as of 2023). “In fact, the December imports were the highest ever recorded,” it claims.

The experience of at least one major fertilizer supplier seems to validate that the European market was clearly bringing sales ahead in the final months of 2025. In a conference call discussing Q4 results with analysts and investors last week, Yara International’s head of market intelligence Dag Mo commented on the strength of European demand in the quarter, stating “we think a large part of that was due to positioning ahead of CBAM; already from November… there was quite strong interest in buying.”

Heightened risk of margin squeeze

The dynamic has predictably led to higher prices. Copa-Cogeca claims domestic fertilizer prices in January 2026 were 25% above the 2024 average. Meanwhile, according to Expana’s Vincent Braak, crop analyst, the ammonium‑nitrate price in France this winter is roughly double what it was five years earlier, although it remains well below the 2022 peak driven by the surge in European gas prices after the start of the war in Ukraine.

“Fertilizers are the heaviest variable cost for arable crop cultivation in Europe, so sustained upward pressure on those prices directly erodes farm margins,” observes Braak. “Although the European Commission has signaled a possible retroactive suspension of the application of the CBAM for fertilizers (a measure not implemented as of today), the increase in tariffs on Russian fertilizers imports in July 2026 and ongoing supply‑chain difficulties are still likely to keep production costs in Europe structurally higher.”

A contentious carbon tax on imported goods

Given that the EU already has stringent emissions requirements in place for goods produced domestically, the CBAM is an attempt to level the playing field with foreign producers by imposing an “adjustment mechanism” charge on imports of certain carbon-intensive goods.

As Expana has previously reported, both member states and civil society have warned that the CBAM’s implementation was likely to create distortions in a tight fertilizer market in early 2026.

Expana’s Agri-Food Europe event returns to Amsterdam on February 25-26. Hundreds of senior decision-makers and 60+ expert speakers will discuss trends, risks, and disruptions reshaping agri-food markets.   

On February 26, Kevin Truyts, Global Sales Director Vitamins Business Unit at dsm-firmenich will be part of an industry panel, which will dive deep into what the challenges are in the animal nutrition sector in the context of the major geopolitical shifts the world has seen over the past year.    

“My central argument is that industry and governments must take a hard look at its dependence on critical raw materials, especially feed additives that are essential for high-quality animal nutrition and, ultimately, for ensuring a stable food supply for our population,” Truyts told Expana ahead of the event.    

“Our industry has traditionally optimized for maximum production efficiency at the lowest input cost. However, ‘lowest cost’ can no longer be the only consideration. We must balance costs with growing supply-chain risks, and even more importantly, with the broader issue of food security in Europe and the Western world,” he added.    

Reducing Dependence on Critical Feed Additives

“To illustrate, the EU imports around 70% of its feed vitamins from one single producing country. For vitamins such as vitamin C and vitamin B9 (folic acid), we are fully dependent on non‑EU suppliers. The situation in the US is even more acute: relying on almost 100% imported vitamins, as domestic production is limited essentially to Hy‑D®,” he went on to say. “Both the EU and the US are now exploring strategies to reduce this vulnerability. Ensuring resilient, diverse, and strategically secure supply chains will be critical for the future of our sector.”   

Truyts argued that dsm-firmenich is also very active in terms of advising customers on supply chain resilience in the face of geopolitical disruption by evaluating their supply chain flows of raw materials, regardless of their volumes, and map the risk attached to it.    

“Are they buying from one single source? Do they buy from just one single country of origin? What alternatives are available and what would it take to change a single sourcing to multiple-source supply?” he said. “We also collaborate closely with different industry associations like FEFAC in Europe, AFIA and IFEEDER in the US to objectively call out those risks in very concrete numbers and examples. With six key production plants for vitamins and carotenoids in Europe and two in the US, we can offer real value in terms of risk mitigation of key supplies.”     

“For example, when new trade tariffs were announced last year, we could re-route some product flows to minimize the tariff impact. If geopolitical tensions led to specific supply disruptions in certain regions, we could do the same to safeguard supplies for our customers. Against that perspective, a large US-based integrator customer decided to shift on a long-term basis a significant part of their vitamin supply to Europe to secure their supply of critical nutrients. In fact, we see a general tendency for US customers to anticipate and secure the limited vitamin production capacity outside of China earlier than EU customers,” he added.  

Balancing Cost Competitiveness with Innovation

Asked about what the most critical capabilities organizations like dsm-firmenich must develop or strengthen over the next months to remain competitive, Truyts argued that first, “we must stay relentlessly focused on cost competitiveness. We are addressing this through ongoing process optimization and leaner operations, while maintaining our high standards for product quality, worker safety, and environmental performance,” he said.    

“Secondly, we need to keep innovating. dsm-firmenich Animal Nutrition & Health (ANH) invests considerable sums in R&D, which fuels new product innovations as well as new digital and precision services.”   

Truyts argued that pressure from downstream players (retailers and food service companies) is increasing rapidly as 2030 approaches. “For many retailers, animal protein represents up to 40% of Scope 3 emissions; for some global food service companies, it can be as high as 70–80%. They are now asking suppliers for accurate footprint mapping and carbon transition plans,” he said, adding that the feed industry and farmers have the greatest lever for change, as up to 80% of animal protein’s carbon footprint originates there. “Productivity improvements and feed reformulation can deliver very low, or even negative, costs of carbon abatement, making them highly attractive to the value chain,” he commented.    

Truyts added: “A recent collaboration in the Netherlands between our ANH business, a feed producer, an egg packer, and a retailer illustrates this perfectly: through nutritional improvements alone, they achieved a 17% reduction in the egg’s carbon footprint, with no additional cost to consumers. It’s scalable, impactful, and directly supports retailers’ Scope 3 reduction targets.”    

Precision Nutrition, Regulation and AI-Driven Resilience

And finally, in Truyts’s view, regulatory capability is critical. “We have strong in‑house expertise that helps us not only anticipate and comply with evolving regulations but also support customers and stakeholders in understanding, interpreting, and implementing them effectively,” he said. 

Regarding the challenge of delivering higher nutritional value while managing volatile raw material costs, Truyts argued that the ANH business helps customers navigate tightening regulations and reformulation pressures by focusing on precision, predictability, and partnership.    

“As Europe raises the bar on compliance, our science-based nutrient solutions and digital formulation tools allow producers to meet new standards without inflating cost,” he said. “By improving nutrient utilization through enzymes, vitamins, carotenoids and eubiotics, we enable diets that deliver the same or higher performance at lower inclusion rates, protecting feed economics even as rules change.”    

“When raw material markets are volatile, we rely on data driven modeling and robust nutrient equivalency values to give customers clarity and flexibility. This lets them reformulate confidently using broader ingredient options while maintaining consistency and animal performance,” he also said, adding that the company’s mycotoxin management portfolio offers a solution for protecting animal health.    

dsm-firmenich is also using AI technology to deliver sharper decisions and real value on the farm via predictive insights, “turning complex livestock data into clear, real‑time actions that improve herd health and productivity. And with a fully governed, enterprise‑ready data and AI stack, we roll out innovations faster and more reliably across all our solutions,” he said.     

dsm-firmenich’s Global Sales Director of the Vitamins Business Unit also shared his awareness about the challenge of reconciling the pressure for cost reduction with the investment required for innovation in an uncertain environment. “Balancing these priorities is challenging because they often seem at odds. Yet doing both is essential to stay ahead of the competition. Maintaining a strong cost position requires constant monitoring and a willingness to challenge established assumptions,” he commented.    

“At the same time, innovation isn’t limited to new products entering the market: it also takes place within our production processes, where we continuously aim for best‑in‑industry performance. Advancements in vitamin formulation and improvements in bacterial strains remain key focus areas, enabling us to innovate while strengthening efficiency and resilience.”