global cassava markets: understanding the drivers and...
TRANSCRIPT
Global cassava markets: understanding the drivers and market dynamics
Jonathan Newby and Cu Thi Le Thuy
ACIAR Mid-term ReviewVientiane, Lao PDR15-19th January 2017
Framework for Objective 1
CROPS
LIVESTOCK
FOREST
OFF-FARM
FARM SYSTEM
VILLAGE SYSTEM
AGRARIAN SYSTEM
TRENDS
SHOCKS
LAN
D
WA
TER
MARKETS
OR
GA
NISA
TION
S
SOC
IAL
REL
ATI
ON
S
TRAJECTORIES
INTERVENTIONS
Project objectives
ASEM
Objective 1 – Assess the current production, marketing, and institutional arrangements for cassava in
major agroeconomic zones and value chains in Laos and Cambodia.
1.1 Understand the macro-level drivers for the development of the local cassava industry in different
agroeconomic zones in each country, including changing market conditions and policy settings.
AGB
Objective 1 – Assess opportunities and constraints for smallholder production and
marketing of cassava within different value chains
1.1 Understand the macro-level drivers for the development of the cassava industry
including changing market and policy arrangements for cassava (starch, feed, chips) and
substitutes (e.g., maize, potato, and sugar) and the potential benefits and risks to value chain
actors
Activity and output
Activity Review information on global and national cassava production, utilisation, trade, and policies.
Original outputAnnual market update
Actual outputAnnual market updates, blogs, presentations, Facebook group, website
Market outlook for cassava needs to be considered in the context of substitutes in different applications
1. Cassava for direct consumption or sale into short value chains as fresh roots for food. Competition with other food such as rice based on price and consumer preferences.
2. Global markets where cassava chips compete with other forms of carbohydrate for processing animal feed or ethanol such as maize, sorghum, wheat, molasses – oil, gas.
3. Markets where cassava starch competes largely on price with substitutes such as maize and potato starch, sugarcane.
4. Markets where the functional properties of the starch are desired.
0
50
100
150
200
250
300C
on
go
Mo
zam
biq
ue
Gh
ana
An
gola
Mad
agas
car
Par
agu
ay
Cen
tral
Afr
ican
Rep
ub
lic
Lib
eria
Sier
ra L
eon
e
Nig
eria
Togo
Ben
in
CÃ
´te
d'Iv
oir
e
Cam
ero
on
Rw
and
a
Gu
inea
Mal
awi
Uga
nd
a
Tan
zan
ia
Gab
on
Zam
bia
Ind
on
esia Fiji
Co
lom
bia
Bra
zil
Lao
PD
R
Per
u
Hai
ti
Cam
bo
dia
Cu
ba
Ken
ya
Ph
ilip
pin
es
Tim
or-
Lest
e
Ch
ad
Bo
livia
Zim
bab
we
Do
min
ican
Rep
ub
lic
Gu
inea
-Bis
sau
Thai
lan
d
Ven
ezu
ela
Nic
arag
ua
Mya
nm
ar
Sri L
anka
Fre
nch
Po
lyn
esia
Sen
egal
Suri
nam
e
Nig
er
Vie
t N
am
Cab
o V
erd
e
Bru
nei
Dar
uss
alam
Kg
/cap
ita/
year
At the national scale: cassava not a large contributor to calories
FAO Stats
Sub-national level it is an important food crop
FAO Stats
Over 306,000 cassava households in Nusa Tenggara Timur –85% sell no cassava
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
19
61
19
63
19
65
19
67
19
69
19
71
19
73
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
20
09
20
11
20
13
20
15
Cas
sava
Are
a (M
illio
n h
a)
Indonesia Philippines Thailand Viet Nam Cambodia Lao PDR Myanmar Other
Cultivation of cassava in Southeast Asia has long history of association with markets, trade and policy
Phase 1 – Imperial trade
Phase 2 –European livestock
Phase 3 – Starch & East Asia
Phase 4 - China and maize policy
FAO Stats
0
0.5
1
1.5
2
2.51
96
1
19
65
19
69
19
73
19
77
19
81
19
85
19
89
19
93
19
97
20
01
20
05
20
09
20
13
Imp
ort
val
ue
(Bill
ion
USD
)
Eastern Asia Europe
South-Eastern Asia World
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
19
61
19
65
19
69
19
73
19
77
19
81
19
85
19
89
19
93
19
97
20
01
20
05
20
09
20
13
Imp
ort
val
ue
(Bill
ion
USD
)
Policy induced re-orientation of cassava trade from Europe to Asia
Value of cassava (fresh and dried) Value of cassava starch
FAO Stats
Value of cassava trade and relative importance of cassava starch in global trade
WorldBank Stats
Not an “economic inferior” good
• Livestock feed
• Paper industry and glues
• Textiles
• Sweeteners
• Processed food sector
• Pharmaceuticals
• Alcohol
• Bioplastics
• Biofuel
Desirable functional traits:Meat products, sauces, frozen foods, dairy products, noodles
• High viscosity, firm and elastic texture• Freeze thaw stability.• Provide short texture and reduce water
separation• Smooth texture and paste clarity• Prevent cracking, good freeze thaw • Smooth and improve mouth feel
Cost competitive compared to substitutes?• Maize, sorghum, sugarcane, potatoes, etc• Oil
Rising incomes in Asia: changing diets and consumption
0
2,000
4,000
6,000
8,000
10,000
12,000
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
GD
P p
er
cap
ita
(co
nst
ant
20
10
US$
)
World
Malaysia
East Asia & Pacific (excluding highincome)
China
Thailand
Indonesia
Philippines
India
Vietnam
Lao PDR
WorldBank Stats
Sweeteners44%
Monosodium Gultamate
(MSG)18%
Whole Salers13%
Modified Starch10%
Paper7%
Tapioca Pearls4%
Textile1%
Other3%
Starch Sweeteners
46%
Sugar-hol5%
Modified Starch7%
Polyol2%
Citric Acid7%
Lactic acid1%
glutanate18%
Lysine5%
Other amino acids1% Food
8%
Utilisation of starch in Thailand and China
Thai Domestic use of cassava starch Chinese use of all starch
Source: TTTASource: Jin Shu-ren
Demand for animal feed in Vietnam
Consumption of meat per capita
0
0.5
1
1.5
2
2.5
3
Val
ue
of
imp
ort
s (B
illio
n U
SD)
Soy (1201)
Maize (1005)
0
10
20
30
40
50
60
70
19
61
19
65
19
69
19
73
19
77
19
81
19
85
19
89
19
93
19
97
20
01
20
05
20
09
20
13
Foo
d s
up
ply
qu
anti
ty (
kg/c
apit
a/yr
)
Pigmeat Poultry Meat
Bovine Meat Mutton & Goat Meat
Import of maize and soy
FAO Stats
Trade in syrups and sweeteners and fermentation products
0
10
20
30
40
50
60
70
80
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
Val
ue
of
imp
ort
s (M
illio
n U
SD)
D-glucitol (sorbitol)
Chemically pure fructose
Glucose, glucose syrup(20-50 % dry weightfructose)
Other fructose andfructose syrup, <50 % bydry weight of fructose
Glucose, glucose syrup,< 20 % fructose
0
20
40
60
80
100
120
140
160
180
20
06
20
08
20
10
20
12
20
14
20
06
20
08
20
10
20
12
20
14
Export ImportTr
ade
valu
e (M
illio
n U
SD)
Glutamic acid and itssalts
Lysine and its esters
Comtrade
Import of sweeteners Trade in Glutamic acid (MSG+) & Lysine
0
2
4
6
8
10
12
14
16
(KG
/CA
PIT
A/Y
R)
Pigmeat Mutton & Goat Meat Bovine Meat Poultry Meat
0
2
4
6
8
10
12
14
16
18
(KG
/CA
PIT
A/Y
R)
Demand for animal feed and sweeteners in Indonesia
Consumption of meat per capita Consumption of sugar per capita (Raw Equivalent)
Trade in syrups and sweeteners (Indonesia)
0
20
40
60
80
100
120
Exp
ort
Imp
ort
Exp
ort
Imp
ort
Exp
ort
Imp
ort
Exp
ort
Imp
ort
Exp
ort
Imp
ort
Exp
ort
Imp
ort
Exp
ort
Imp
ort
Exp
ort
Imp
ort
Exp
ort
Imp
ort
Exp
ort
Imp
ort
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Trad
e va
lue
(mill
ion
USD
)
D-glucitol (sorbitol)
Fructose, syrup > 50% fructose, not pure fructose
Fructose, chemically pure
Glucose including syrup of 20%-50% dry weightfructose
Glucose, glucose syrup < 20% fructose
Logistics and freight cost are important
$30MT
$15-20/t +$10-20 truck and clearance
Indonesian domestic market connected to regional market
Indonesian imports of cassava starch from Thailand
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000Ja
n
Feb
Mar
Ap
r
May Jun
Jul
Au
g
Sep
Oct
No
v
Dec
Thai
lan
d c
assa
va s
tarc
h e
xpo
rts
to In
do
ne
sia
(To
ns)
2010
2011
2012
2013
2014
2015
2016
2017
0
50
100
150
200
250
300
Jan
Feb
Mar
Ap
r
May Jun
Jul
Au
g
Sep
Oct
No
v
Dec
Thai
lan
d c
assa
va s
tarc
h e
xpo
rts
to In
do
ne
sia
(Mill
ion
USD
)
2010
2011
2012
2013
2014
2015
2016
2017
Maintaining connection with private sector partners in Myanmar
-100
0
100
200
300
400
500
600
Jul-
12
No
v-12
Mar
-13
Jul-
13
No
v-13
Mar
-14
Jul-
14
No
v-14
Mar
-15
Jul-
15
No
v-15
Mar
-16
Jul-
16
No
v-16
Mar
-17
Jul-
17
No
v-17
Cas
sava
sta
rch
pri
ce (
USD
/t)
Difference Wholesale Ayeyarwady (USD/t) FOB Bangkok (USD/t)
Myanmar sweetener trade
0
2
4
6
8
10
12
14
2011 2012 2013 2014 2015
Val
ue
of
exp
ort
s to
Mya
nm
ar (
mill
ion
USD
)
Sorbitol (Indonesia)
Glucose syrups (China)
Other sugars nes (Thailand)
Market distortions, global commodities, local prices
Rabobank estimated that there was 232 million tons of Chinese maize stock in 2015/16
Floor price
-300
-200
-100
0
100
200
300
400
500
600
Jun
-08
Sep
-08
Dec
-08
Mar
-09
Jun
-09
Sep
-09
Dec
-09
Mar
-10
Jun
-10
Sep
-10
Dec
-10
Mar
-11
Jun
-11
Sep
-11
Dec
-11
Mar
-12
Jun
-12
Sep
-12
Dec
-12
Mar
-13
Jun
-13
Sep
-13
Dec
-13
Mar
-14
Jun
-14
Sep
-14
Dec
-14
Mar
-15
Jun
-15
Sep
-15
Dec
-15
Mar
-16
Jun
-16
Sep
-16
Dec
-16
Mar
-17
Jun
-17
Sep
-17
Dec
-17
USD
PER
MT
Difference US Gulf Maize CNF China + VAT Chinese Futures (DCE) US Gulf Maize (FOB)
Cassava prices in Thailand respond to changing maize policy in China
150
170
190
210
230
250
270
290
310
300
350
400
450
500
550
600
650
Jan
-10
Jun
-10
No
v-10
Ap
r-1
1
Sep
-11
Feb
-12
Jul-
12
Dec
-12
May
-13
Oct
-13
Mar
-14
Au
g-14
Jan
-15
Jun
-15
No
v-15
Ap
r-1
6
Sep
-16
Feb
-17
Jul-
17
Cas
sava
Ch
ips
-FO
B B
angk
ok
(USD
/t)
Star
ch-
FOB
Ban
gko
k (U
SD/t
)
Tapioca Starch (Super High-Grade) Export Price (USD/T)
Tapioca Chips Export Price (USD/T)
Cassava root spot prices(Jan 2017)
Location Price USD/t (factory/collect point)
Starch content
Thailand $49 USD/T 25%
Tay Ninh (Vietnam) $74 – 77 USD/T 30%
Central Highlands (Vietnam)
$64-65 USD/T 30%
Sonla (Vietnam) $58 – 60 USD/T 30%
North Sumatra (Indonesia)
$47 USD/T 10 month min.
Bolikhamxai (Laos) $37 USD/T
Champasak (Laos) $37 USD/T
Xayabouli (Laos) $36 – 49 USD/T
Tboung Khmun (Cambodia)
49-52 USD/T
Battambang (Cambodia)
$42 – 45 USD/T Below and above 25%
Farm gate = $28
0.5
0.7
0.9
1.1
1.3
1.5
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
20
09
20
11
20
13
20
15A
rea
of
cult
ivat
ion
n (
mill
ion
ha)
Cassava
Cassava
National area of cassava and maize in Indonesia
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
20
09
20
11
20
13
20
15
Are
a o
f cu
ltiv
atio
nn
(m
illio
n h
a)
Maize
Maize
1200
1400
1600
1800
2000
2200
2400
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51
VN
D/K
G (
30
% S
TAR
CH
)
WEEK
Daklak (2016) Daklak (2017) Tay Ninh (2016)
Tay Ninh (2017) Cambodia to Tay Ninh (2016) Cambodia to Tay Ninh (2017)
Sonla Sonla (2017)
Fresh root price in Vietnam
1 starch factory
41 starch factory
4 starch factory + ethanol
Thailand and Vietnam export of cassava starch (cumulative monthly)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5Ja
n
Feb
Mar
Ap
r
May Jun
Jul
Au
g
Sep
Oct
No
v
Dec
Cu
mu
lati
ve m
on
thly
Th
ai s
tarc
h e
xpo
rts
(Mill
ion
to
ns)
2010
2011
2012
2013
2014
2015
2016
2017
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Jan
Feb
Mar
Ap
r
May Jun
Jul
Au
g
Sep
Oct
No
v
DecCu
mu
lati
ve m
on
thly
Vie
tnam
sta
rch
exp
ort
s (M
illio
n t
on
s)
2010
2011
2012
2013
2014
2015
2016
2017
Thai export of cassava chips by volume and value (cumulative monthly)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0Ja
n
Feb
Mar
Ap
r
May Jun
Jul
Au
g
Sep
Oct
No
v
Dec
Cu
mu
lati
ve m
on
th T
hai
ch
ip e
xpo
rts
(Mill
ion
to
ns)
2010
2011
2012
2013
2014
2015
2016
2017
0.0
0.5
1.0
1.5
2.0
2.5
Jan
Feb
Mar
Ap
rM
ay Jun
Jul
Au
gSe
pO
ctN
ov
DecCu
mu
lati
ve m
on
thly
Vie
tnam
ch
ip e
xpo
rts
(mill
ion
to
ns)
2010
2011
2012
2013
2014
2015
2016
2017
Tapioca and maize starch prices
-200
-100
0
100
200
300
400
500
600
700
Oct
-09
Feb
-10
Jun
-10
Oct
-10
Feb
-11
Jun
-11
Oct
-11
Feb
-12
Jun
-12
Oct
-12
Feb
-13
Jun
-13
Oct
-13
Feb
-14
Jun
-14
Oct
-14
Feb
-15
Jun
-15
Oct
-15
Feb
-16
Jun
-16
Oct
-16
Feb
-17
Jun
-17
Oct
-17
USD
/MT
Difference Tapioca starch (Super High-Grade) FOB Bangkok Corn starch, Midwest
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
Oct
-09
Mar
-10
Au
g-1
0
Jan
-11
Jun
-11
No
v-1
1
Ap
r-1
2
Sep
-12
Feb
-13
Jul-
13
Dec
-13
May
-14
Oct
-14
Mar
-15
Au
g-1
5
Jan
-16
Jun
-16
No
v-1
6
Ap
r-1
7
USD
/Lit
re
Root cost in Ethanol (Indonesia) Root cost in Ethanol (Thai)
CBOT Ethanol (USD/litre)
Biofuel prices and root equivalent priceThe new policies on the horizon that will influence the short-term and long term trajectory of the cassava sector and smallholder farmers
Conclusion
• When deciding which crop to grow, farmers do not consider factors such as: the global
price of oil, sugar, wheat, maize; changes in the demand for pork, or paper and
cardboard; or whether a biofuel mandate is developed.
• Yet as a global commodity trade, understanding the connection between cassava and
these markets in essential to understanding the outlook for the crop.
• An understanding of the global market context in which localised value chains
(farmer-trader-processor) operate helps recognize the market risk that farmers and
processors are exposed to.
• This can help develop informed scenarios regarding the potential for intensification
and diversification strategies improve farmer livelihoods.
Join the conversation at : https://www.facebook.com/groups/1462662477369426/
ACIAR Cassava Value Chain and Livelihood Program