Global cassava market updateJuly 2019

Global cassava market update
July 2019
Jonathan Newby and Cu Thi Le Thuy
ACIAR Cassava Value Chain and Livelihood Program
Research Symposium, North Sumatra, July 2019
j.newby@cgiar.org

Framework on the project
1. Global markets and external
polices
2. Local value chains and domestic
policies
3. Household livelihoods and
trajectories
4. Field level agronomic and
economic results
5. Implications for household
livelihoods
6. Implications for local value chain
actors
Global markets and policies
Local value chains and policies
Household livelihoods
and trajectories
Agronomic &
economics
Plot level

On the demand side – the market outlook for cassava in Asia needs to be
considered in the context of substitutes in different applications
1. 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.
2. Markets where cassava starch competes largely
on price with substitutes such as maize and
potato starch, sugarcane.
3. Markets where the functional properties of the
starch are desired. Consumer preferences, clean
label segment, gluten free etc.

And on the supply side – the relative competitiveness against other land use
in the context of different trends and shocks
• Own price and relative prices to other
commodities that can be produced in
agro-ecological zones
• Changes in costs of production
• Changing labour costs and ease of mechanization
• Long term climate trends
• Floods and droughts
• Changes in land suitability and land
degradation
• IMPACT OF PEST AND DISEASE

0
20
40
60
80
100
120
140
160
Jan-15
May-15
Sep-15
Jan-16
May-16
Sep-16
Jan-17
May-17
Sep-17
Jan-18
May-18
Sep-18
Jan-19
May-19
INDEX(JAN15=100) Maize Sugar, world Thai Roots
0
20
40
60
80
100
120
140
160
180
Jan-15
May-15
Sep-15
Jan-16
May-16
Sep-16
Jan-17
May-17
Sep-17
Jan-18
May-18
Sep-18
Jan-19
May-19
INDEX(JAN15=100)
Palm oil Coffee, arabica
Coffee, robusta Rubber, SGP/MYS
Thai Roots
The competition for land: change in relative prices of field and tree crops

Area (ha) Production (t) Yield (t/ha)
Country 2016 2017 2018 2016 2017 2018 2016 2017 2018
Thailand
1,427,168 1,284,021
1,344,792
30,557,857 27,875,464
29,974,636* 21.4 21.7 22.3
Indonesia 822,744 772,975 792,95220,260,675 19,053,748 19,341,233 24.6 24.6 24.4
Vietnam 569,233 532,501 10,909,800 10,267,568 19.2 19.3
Cambodia 684,070 613,912 652,235 14,820,249 13,817,261 13,750,076 21.7 22.5 21.1
Laos 75,810 70,930 2,410,000 2,277,050 31.8 32.1
Myanmar 36,625 34,718 433,378 405,404 11.83 11.68
Philippines 229,769 234,540 2,755,146 2,806,668 12.0 12.0
Total 3,845,419 3,543,597 2,789,979 82,147,105 76,503,163 63,065,945 21.4 21.6
Change in production and productivity at National level
Statistic too late for analysis in most countries
*Revised down 8%

0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
ThaiImportvolumnefromCambodia(Tons)
2010 2011 2012 2013 2014
2015 2016 2017 2018 2019
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
ThaiImportvolumnefromLaoPDR(Tons)
2010 2011 2012 2013 2014
2015 2016 2017 2018 2019
Thai imports of chips and fresh roots from Cambodia and Lao PDR
2017= $282m
2018 = 201m
2019* = $116m
2017 = $83m
2018= $68m
2019* = $54m

Current official reported status of CMD in mainland SE Asia
Vietnam: 15 Provinces infected
Current area 40,775 ha infected
Cambodia: 10 Provinces declared
additional provinces with reported
symptoms
Thailand: 7 Provinces have had symptoms reported
Laos: No symptoms reported – planting material
coming from Vietnam and Thailand
Myanmar: No symptoms report – planting material
coming from outside

0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Valueofcassavaexports(billionusd)
Value of cassava exports (2009-2017)
Total (USD) China
Importance of Chinese market outlook

Smallholders cassava farmers part of a larger global carbohydrate market
Large stockpile remains:
Allowed to be used for biofuel
Reduction
in price
support Removal
of scheme
0
500
1,000
1,500
2,000
2,500
3,000
-200
-100
0
100
200
300
400
500
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Apr-19
ChineseMaizeFuture(RMB)
USDperMT
Difference US Gulf Maize CNF China + VAT
Chinese Futures (DCE) US Gulf Maize (FOB)
Chinese RMB

Fall armyworm to impact maize supply in the region

African Swine Fever to moderate demand in the short-term: substitution to
other animal protein - poultry

0
50
100
150
200
250
300
350
0
2
4
6
8
10
12
14
Jan-98
Apr-99
Jul-00
Oct-01
Jan-03
Apr-04
Jul-05
Oct-06
Jan-08
Apr-09
Jul-10
Oct-11
Jan-13
Apr-14
Jul-15
Oct-16
Jan-18
Apr-19
USMaize(USD/t)
ThaiPrice(Baht/kg)
Thai Corn 80%Cassava+20%Soymeal Maize (FOB Gulf)
Animal feed prices in Thailand and distribution of ASF

6
8
10
12
14
16
18
20
22
150
200
250
300
350
400
450
500
550
600
650
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
Jul-18
Jan-19
DomesticPrice(Baht/kg)
ExportPrice(FOBUS/MT)
Export Price (FOB US/MT) Domestic price (Baht/kg)
150
170
190
210
230
250
270
290
310
300
350
400
450
500
550
600
650
Jan-10
Aug-10
Mar-11
Oct-11
May-12
Dec-12
Jul-13
Feb-14
Sep-14
Apr-15
Nov-15
Jun-16
Jan-17
Aug-17
Mar-18
Oct-18
May-19
CassavaChips-FOBBangkok(USD/t)
Starch-FOBBangkok(USD/t)
Tapioca Starch (Super High-Grade) Export Price (USD/T)
Tapioca Chips Export Price (USD/T)
Thai reference price declines in past 6 months as local supply recovers and
demand for chips declines
Thai Starch price Thai Starch and Chip price

-60
-40
-20
0
20
40
60
250
300
350
400
450
500
550
600
Jan-16
Mar-16
May-16
Jul-16
Sep-16
Nov-16
Jan-17
Mar-17
May-17
Jul-17
Sep-17
Nov-17
Jan-18
Mar-18
May-18
Jul-18
Sep-18
Nov-18
Jan-19
Mar-19
May-19
Bangkok-HCMC(USD/t)
Starchprice(USD/t)
Difference FOB HCMC High FOB HCMC Low
DAF China High DAF China Low Bangkok-HCMC
-80
-60
-40
-20
0
20
40
60
80
100
200
250
300
350
400
450
500
550
600
650
Oct-09
Mar-10
Aug-10
Jan-11
Jun-11
Nov-11
Apr-12
Sep-12
Feb-13
Jul-13
Dec-13
May-14
Oct-14
Mar-15
Aug-15
Jan-16
Jun-16
Nov-16
Apr-17
Sep-17
Feb-18
Jul-18
Dec-18
May-19
Difference(Thai-Domestic@Factorygate)
StarchPrice(USD/t)
Difference Thai Starch (FOB Bangkok) Indonesia Starch (East Java) Thai + Freight
Relative starch price in Vietnam and Indonesia against Thai Benchmark
Vietnam Indonesia
Thai Cheaper Thai Cheaper

-200
-100
0
100
200
300
400
500
600
700
Oct-09
Apr-10
Oct-10
Apr-11
Oct-11
Apr-12
Oct-12
Apr-13
Oct-13
Apr-14
Oct-14
Apr-15
Oct-15
Apr-16
Oct-16
Apr-17
Oct-17
Apr-18
Oct-18
Apr-19
USD/MT
Difference
Tapioca starch (Super High-Grade) FOB Bangkok
Corn starch, Midwest
Thai Cassava Starch versus US maize starch and Indonesian Imports
0
50
100
150
200
250
300
ThailandcassavastarchexportstoIndonesia
(MillionUSD)
2010 2011 2012 2013 2014
2015 2016 2017 2018 2019
2012
Indonesia increase import of corn starch and syrups

0
200
400
600
800
1,000
1,200
1,400
1,600
ThaiStarchexportvalue(MillionUSD)
2010
2011
2012
2014
2015
2016
2017
2018
2019
-
100
200
300
400
500
600
700
800
900
1,000
Valueofstarchexpots(MillionUSD)
2010
2011
2012
2014
2015
2016
2017
2018
2019
Cassava starch exports continue to expand in value in short-term
2019 - Thai starch exports to date at highest value in history Vietnam starch exports remain strong
2015

1000
1500
2000
2500
3000
3500
4000
4500
5000
Jan-17
Mar-17
May-17
Jul-17
Sep-17
Nov-17
Jan-18
Mar-18
May-18
Jul-18
Sep-18
Nov-18
Jan-19
Mar-19
May-19
Freshrootprice(THB/t)
ThaiBahit30 Sonla DakLak TayNinh Thai
-60
-40
-20
0
20
40
60
250
300
350
400
450
500
550
600
Jan-16
Apr-16
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Apr-19
BANGKOK-HCMC(USD/T)
STARCHPRICE(USD/T)
Difference FOB HCMC High FOB HCMC Low Bangkok-HCMC
The Vietnam challenge – competition for fresh roots

0
50
100
150
200
250
300
VietnamimportsfromCambodia(MillionUSD)
2010 2011 2012 2013 2014
2015 2016 2017 2018 2019
Early harvest in 2018 of Cambodian roots for Vietnam market
• Extensive margin for
roots extend into
Cambodian hinterland.
• Cut into chip supply
• Impact viability of new
factories in Cambodia
2017
2018

-100
0
100
200
300
400
500
600 Jul-12
Nov-12
Mar-13
Jul-13
Nov-13
Mar-14
Jul-14
Nov-14
Mar-15
Jul-15
Nov-15
Mar-16
Jul-16
Nov-16
Mar-17
Jul-17
Nov-17
Mar-18
Jul-18
Nov-18
Mar-19
Starchprice(USD/t)
Difference Wholesale Ayeyarwady (USD/t) FOB Bangkok (USD/t)
Myanmar starch price relative to Bangkok FOB
Month 2015 2016 2017 2018 2019
Dec 140 170 140 230
Jan 100 130 160 140/120 220/200
Feb 90 150 150 120 200
March 95 170 140 110 200
April 200
Fresh root price (kyat/vis)

0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Thaichipexportvalue(MillionUSD)
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
20192019
-
100
200
300
400
500
600
Valueofchipexports(millionUSD)
2010
2011
2012
2015
2016
2017
2018
2019
2019
Significant decline in chip exports – changing structure of the market
Thailand chip exports – lowest in 10 years Vietnam chip exports

0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
Oct-09
May-10
Dec-10
Jul-11
Feb-12
Sep-12
Apr-13
Nov-13
Jun-14
Jan-15
Aug-15
Mar-16
Oct-16
May-17
Dec-17
Jul-18
Feb-19
USD/Litre
Root cost in Ethanol (Thai) CBOT Ethanol (USD/litre)
Cassava based ethanol production remains challenged by relatively
expensive feedstock
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
Molasses Dried Chips Fresh root Future CBOT
Feed stock Other costs
Daklak, Vietnam

Local Trade and quarantine policy changes International trade negotiations

PANEL DISCUSSION
1. Mr Ngo Quang Tuan, FOCOCEV, Sonla Vietnam
2. Bumi Sari Prima Starch Factory, North Sumatra, Indonesia
3. Mr Dang Cong Nguyen, Dai Viet Ethanol Factory, Daklak Vietnam
4. Mr Somsay Didouangdeth – Chip processor, Bolikhamxai Lao PDR

Mr Ngo Quang Tuan, FOCOCEV, Sonla
Vietnam
Your company has recently increased
processing capacity. There are also new
starch factories in Sonla. How do you see
the supply and demand for roots changing
in the next few season?
How are the new trade regulations with
China impacting the way you manage the
business?

Bumi Sari Prima Starch Factory, North
Sumatra, Indonesia
How has the supply of fresh roots to the
factory recovered after the low prices
and area decline of 2015-16?
How has the prospects of starch
production in North Sumatra changed in
the last 2 years?
-80
-60
-40
-20
0
20
40
60
80
100
200
250
300
350
400
450
500
550
600
650
Oct-09
Mar-10
Aug-10
Jan-11
Jun-11
Nov-11
Apr-12
Sep-12
Feb-13
Jul-13
Dec-13
May-14
Oct-14
Mar-15
Aug-15
Jan-16
Jun-16
Nov-16
Apr-17
Sep-17
Feb-18
Jul-18
Dec-18
May-19
Difference(Thai-Domestic@Factorygate)
StarchPrice(USD/t)
Difference Thai Starch (FOB Bangkok) Indonesia Starch (East Java) Thai + Freight
Thai Cheaper Thai Cheaper

0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
Molasses Dried Chips Fresh root Future CBOT
Feed stock Other costs
Daklak, Vietnam
Mr Dang Cong Nguyen, Dai Viet Ethanol
Factory, Daklak Vietnam
How do you see the outlook for cassava as a
feedstock into ethanol production?
With sugar prices falling – do you think
molasses prices are likely to increase?
How important is having your own supply of
roots to the viability of the business?

Trade and quarantine policy changes
Mr Somsay Didouangdeth – Chip processor,
Bolikhamxai Lao PDR
How do you see the outlook for dried
chip production in Bolikhamxai?
How are the new quarantine measures
impacting the cost of exporting chips to
Thailand? How does this impact the
price of fresh roots?

Global cassava market updateJuly 2019

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