Danish shortage drives up Christmas tree prices

COPENHAGEN (Reuters) - A shortage of Christmas trees in Denmark, Europe's largest exporter, is driving up prices in a trend likely to last until 2012, producers said on Monday.

"Our producers got between 10 and 20 percent more for Nordmann trees this year," said Kaj Ostergaard, the head of the Danish Christmas Tree Growers Association.

The Nordmann, one of the most popular species because of the long life of its silvery needles, is selling in Copenhagen this year for 300 Danish crowns ($56) for a two-meter (six-foot six inches) specimen, 20 percent more than last year.

Denmark produced about 10 million Christmas trees this year, about 8.5 million of them earmarked for export. About half go to Germany, with Britain and France the next biggest buyers.

"The total production of Nordmann firs in Europe is about 30 million trees per year while the demand is 33 million to 35 million," Ostergaard said. "According to my calculations, demand will increase and supply will decrease until 2012."

The seeds of the shortage were sown between 1998 and 2004, when tree prices collapsed because of oversupply and some Danish growers switched to other crops.

Producers are now planting more trees, but a Nordmann needs 10 years to grow, so prices are likely to keep rising for the next three or four years before leveling out.

(Reporting by Gelu Sulugiuc, editing by Tim Pearce)