Forecast on Potato Crop 2012 (August 2012)

In Germany, outlook for potato crop says it is good even less potatoes will be available for the year 2012 since potato growers and farmers cultivate hectares of agricultural lands. It is estimated that some 56 million tons will be available, and this is a very low output. It is an all time low.

Last year overall cultivated potato area in Germany was reduced with about 8 % and more specifically 11% for starch potatoes. This almost equals decline in the Netherlands where 12 % less hectares starch potatoes were cultivated. For potato flakes, or dehydrated potatoes, similar situation of lesser output is expected.

Corn Crop Output, USA (August 2012) Due to the moderate drought in some parts of the United States, particularly the Midwest from Nebraska to Ohio, and also from Minnesota to the areas in Arkansas, the USDA says that the corn crop will be 15% lower compared with that of last year. This will affect the corn grits and corn starch production. As such, corn starch prices are expected to increase by at least 25%.

Potato Price Increase (Germany, June 2012) Contract volumes of starch potatoes in 2012 might be till 20% lower, while on the long term cultivated potato areas face annual reductions at about 4%. These developments will lift prices of potato starch and its derivatives. Related to subsidy cuts potatoes for production of starch are forecasted to increase in price with about 20,- €/ton. The consequent effect on derived starches will be around 100,- €/ton. These adjustments will be effective as from beginning of our processing campaign Aug. / Sept. 2012. This cost increase will affect all potato starch producer within the EU.

Outlook for Chinese Starch Industry 2012-2016

With several decades of development, starch has been playing an essential role in industry, food, pharmaceuticals worldwide. Starch production worldwide is mainly concentrated in the US, China, the EU, Japan, Thailand, etc. The US and China are the top two producers in terms of output. China's starch has been increasing rapidly and has been playing an important role in global starch market. Currently, it has achieved large-scale production of corn starch, cassava starch, potato starch, wheat starch, sweet potato starch, as well as waxy-based starch with a small quantity. Thereinto, corn starch contributes over 85% to the country's total starch output in 2011.

Deep processing is the most important consumption field of starch in China, accounting for around 95% of total starch consumption in 2011. With rising demand from downstream products, modified starch and other starch derivatives will be the most important drivers for starch industry in China, which have attracted more and more foreign investment.

With intense competition and rising manufacturing cost, profit for starch production has shrunk largely recently. And the industry is facing overcapacity. Under this circumstance, many small producers without enough competitiveness have been phased out from the market, while large producers survive through expanding product mix, improving product quality, cooperating with upstream and downstream companies, etc.