Session 6.1 Markets of Cassava products: Issues in Marketing/Smallholder Produce by Lefroy, CIAT

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Session 6.1 Markets of Cassava products: Issues in Marketing/Smallholder Produce by Lefroy, CIAT

  1. 2. Markets for Smallholder Cassava Production <ul><li>Focus: Smallholder Cassava production in Asia </li></ul><ul><li>Production & Trade: Global and Asia </li></ul><ul><li>Smallholder options for utilization and sale </li></ul><ul><li>Market dynamics & farmer strategies </li></ul><ul><li>Recommendations ? .....The ways forward ? ... </li></ul><ul><li>Biofuel is not the focus – but clearly a consideration </li></ul>
  2. 3. <ul><li>Warning Note: Quality of Statistics </li></ul><ul><li>Production </li></ul><ul><li>FAOSTAT and National statistics </li></ul><ul><li>China: Provincial statistics are much higher </li></ul><ul><li>Trade </li></ul><ul><li>FAOSTAT and others </li></ul><ul><li>Combine categories differently </li></ul><ul><li>Include some but not all products </li></ul>
  3. 4. Global Production of Cassava
  4. 5. Asian Production of Cassava
  5. 6. <ul><li>2007 Exports </li></ul><ul><li>6.5 million t dried cassava (chips, pellets, etc.) </li></ul><ul><li>1.6 million t starch </li></ul><ul><li><25 million t fresh root equivalent (~11% global production) </li></ul><ul><li>75 % from Thailand (90% of starch, 70% of chips) 15% from Viet Nam (20% of chips) </li></ul><ul><li>2007 Imports </li></ul><ul><li>62% to China (~70% of chips, 45% of starch) </li></ul><ul><li>18% to Western Europe (~25% of chips) </li></ul><ul><li>15% rest of Asia (40% of starch) </li></ul>Global Trade in Cassava Products
  6. 7. <ul><li>2009 Exports Large change in 2 years </li></ul><ul><li>8 million t chips </li></ul><ul><li>4 million t starch & flour </li></ul><ul><li>~39 million t fresh root equivalent </li></ul><ul><li>67 % from Thailand (90 % of starch, ~50 % of chips) 26 % from Viet Nam (44 % of chips) </li></ul><ul><li>2009 Imports </li></ul><ul><li>68 % to China (>85 % of chips, 40 % of starch) </li></ul><ul><li>32 % to rest (60 % of starch) </li></ul>Global Trade in Cassava Products
  7. 8. <ul><li>Demand: </li></ul><ul><li>China: expects to double consumption in 5+ years </li></ul><ul><li>Currently imports 60% of consumption </li></ul><ul><li>Even if domestic production doubles, importation will double </li></ul><ul><li>Supply: </li></ul><ul><li>~ 25% of current Viet Nam export of chips will be required by bioethanol plants under construction </li></ul><ul><li>Depending on policies and prices, similar in Thailand? </li></ul><ul><li>Huge opportunities for other producers – in Asia ... and in SSA? </li></ul>Likely changes in Global Trade in Cassava ?!!
  8. 9. <ul><li>~ 4 million ha producing ~75 million t </li></ul><ul><li>Dominated by smallholders: </li></ul><ul><ul><li>Estimated 8 million farming households, average 0.5 ha/farm </li></ul></ul><ul><ul><li>Indonesia: ~3 million HH 0.4 ha/farm </li></ul></ul><ul><ul><li>Viet Nam: ~2 million HH <0.3 ha/farm </li></ul></ul><ul><ul><li>China : ~1.5 million HH <0.3 ha/farm </li></ul></ul><ul><ul><li>Thailand: <0.5 million HH 2.5 ha/farm </li></ul></ul><ul><ul><li>Some larger estates/companies </li></ul></ul><ul><li>50+ % using modern “industrial” varieties 80% in GMS; Large area under one variety </li></ul>Production in Asia
  9. 10. <ul><li>On-farm /domestic use </li></ul><ul><li>Sale </li></ul><ul><ul><li>Range of methods </li></ul></ul><ul><ul><li>Wide range of products/value chains </li></ul></ul>“ Market” options for Smallholders
  10. 11. <ul><li>Staple food - food and snacks in Indonesia and East Timor - some ethnic minority groups in mountainous SE, E, and S Asia </li></ul>On Farm Use
  11. 12. Human Consumption of Cassava
  12. 13. <ul><li>Staple food - food and snacks in Indonesia and East Timor - some ethnic minority groups in mountainous SE, E, and S Asia </li></ul><ul><li>Emergency or occasional food - coping with rice shortages - when working in the field - artisanal noodle production </li></ul><ul><li>On-farm use for animals - roots & leaves - wilted, dried, ensiled </li></ul>On Farm Use
  13. 14. <ul><li>Fresh Roots </li></ul><ul><ul><li>food or local snack food processing - relatively low volume, high price </li></ul></ul><ul><ul><li>Processing for foodstuffs, feed, starch, modified starch, biofuel, etc. …… including chips </li></ul></ul><ul><li>Dried roots/chips (on-farm) </li></ul><ul><ul><li>For on-farm use </li></ul></ul><ul><ul><li>If limited access to markets / traders </li></ul></ul>Market options for Smallholders
  14. 15. <ul><ul><li>Eating varieties - quality (most “industrial” varieties = low acceptability) - price expectations </li></ul></ul><ul><ul><li>Processing varieties - payment on starch content (combine yield and % starch) - greater product differentiation may reduce flexibility </li></ul></ul><ul><ul><li>Range of processors – size and value chain - artisanal, small, medium, large - chip exporters, feed, starch, modified starch, bioethanol, … - differs by location and between countries </li></ul></ul>Flexible market options for Smallholders
  15. 16. Price variability Prices with local traders / collectors vary more widely – often much lower!
  16. 17. <ul><li>Processors require: </li></ul><ul><li>Near-continuous supply - multiple feed stocks - storage (dried, wet starch, reduced PPD) </li></ul><ul><li>Low but economic prices - need to improve and maintain profitability for smallholders </li></ul>Feedstock supply to Processors
  17. 18. <ul><li>Chipping by smallholders or local collectors: </li></ul><ul><li>Promotion of a range of effective chipping and drying apparatus </li></ul><ul><li>Adds value and flexibility </li></ul>Value adding possibilities
  18. 19. <ul><li>Pre-processing at or near production site: </li></ul><ul><li>Adds value and flexibility </li></ul><ul><li>“ Waste problem” becomes a benefit - Residues for animal feed - Waste water for irrigation </li></ul><ul><li>Social policy for rural employment and industrialization, and reduce move to cities </li></ul>Value adding possibilities
  19. 20. <ul><li>Forms of Pre-processing: </li></ul><ul><li>Production and storage of wet starch </li></ul><ul><li>Initial fermentation to mash (pre-distillation) </li></ul><ul><li>Mini-factories for starch / flour - mobile (probably unnecessary) - transportable </li></ul>Value adding possibilities
  20. 21. <ul><li>Labour productivity - harvesting tools, etc. </li></ul><ul><li>Agronomy / management - pest and disease management - much of the benefit of germplasm attained - likely further gains through agronomy (fertilizers, erosion control, cropping systems, planting density &/or time to harvest, ...) </li></ul><ul><li>Credit/inputs and appropriate contracts </li></ul>Productivity / Profitability
  21. 22. <ul><li>New germplasm - pest and disease resistance - new starch qualities - higher starch yields (even with high moisture) - decreased PPD - plant type for higher planting density - Roundup-ready varieties ........ </li></ul><ul><li>Need to avoid too much specificity that narrows market opportunities </li></ul>Productivity / Profitability
  22. 23. <ul><li>Cassava has proved to be a good crop for economic development for the poor </li></ul><ul><li>Requires facilitation of links to markets </li></ul><ul><li>Requires support for improved production and processing (increased R&D support) </li></ul><ul><li>Requires the right policies (pro-poor social, environmental, and biofuel policies) </li></ul><ul><li>Cassava can be a major pro-poor bioenergy crop </li></ul>Conclusions

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