Scandinavian market is full of extremes

Scandinavia is under the spell of extreme drought. Countries such as Sweden and Denmark were among the first European areas to experience dry weather. Between May 1 and July 15, a total of 43 millimeters fell in Denmark, 75% less than normal. Even above the Arctic Circle, the mercury reaches values ​​above 30 degrees Celsius. That's unheard of.

Price reductions
Potatoes in Sweden and Denmark could be planted early this spring, due to favorable and dry conditions. The warm weather ensured rapid crop development. The disease pressure has also been low throughout the season. The tuber formation was also experienced as good. The harvest started 2 weeks earlier than normal this season. In addition, a large volume was released quickly, which led to price reductions.

Buyers tried to keep prices low for a long time, despite the fact that the Swedish acreage has shrunk by 1.000 hectares this year. Prices have now increased, and it now appears that the main harvest is considerably smaller. Irrigation is no longer possible in many places; there are bans or the water has run out.

The ripening of the varieties for the main harvest usually starts at the end of August. That is already the case this year at the start of this month. Just like in the Benelux, the underwater weights are at a high level. The harvest is not only historically small, but also very early. Prices of around €25 per 100 kilos are paid for packaged table potatoes.

Starch potatoes
In Denmark, starch potato cultivation covers more than half of the national area and about 10% of the area consists of seed potatoes. The area amounted to more than 2014 hectares in 40.000, with a production of 1,73 million tons. Sweden is a slightly smaller player (with 23.800 hectares). In 2014, production there was at a level of 822.000 tons; mainly consumption potatoes.

Since 2011, when the European production quotas for potato starch were met, cultivation has been growing again in Denmark. Starch producer AKM produced approximately 2011 tons of starch in 40.000. Due to expansion, this is expected to be 80.000 tons in the coming season.

Competitor AKV in Langholt produced 50.000 tons of starch last season and processed 211.000 tons of potatoes. This company is also committed to growth. Co-owner is agro giant Cargill. Last year the company invested €14,5 million in starch production. Karup Kartoffelmelfabrik processed almost 2017 tons of starch potatoes during the 2018/482.000 campaign, accounting for 110.000 tons of starch. Growers were paid 3,97 Danish krone per kilo of starch, equivalent to €53,28 per 100 kilos.

Growth in area
The Danes see opportunities for the starch sector. In the Netherlands and Germany there is increasing focus on the cultivation of French fries potatoes, which offers opportunities for international sales. It deposits more starch, especially in Asia, where it is used in food products. Potato flour also goes to the animal feed and paper industry.

(Text continues below the chart)Sweden in particular buys quite a few Dutch potatoes. The trend is increasing.

Dutch sales
Exports to both countries are erratic. In Sweden a peak is visible every year around August. Exports are also higher in January and March. January 2016 stands out (3.000 tons). Exports to Denmark are at a lower level, but have been increasing since 2017. In April 2014 it imported 2.000 tons. Exports to Finland usually amount to tens of tons, not hundreds. Norway is not included in the export figures.

For the 2017 harvest, Sweden has so far produced 15.564 tons, an increase of 900 tons. Denmark stands at 8.763 tons, which is an increase of 1.800 tons (compared to last year). Sweden thus occupies fifth place as a European export country. For example, it purchases more potatoes than the United Kingdom. Denmark is in 7th place.