FAO/GIEWS - Food Outlook No.5, November 1998

CASSAVA

• Global cassava production and consumption lower in 1998
• Lower cassava trade in 1998
• Cassava pellets prices reached their lowest level
• Production, trade and price outlook for 1999

Global cassava production and consumption lower in 1998

World cassava production in 1998 is forecast to decline by 2 percent to 161 million tonnes (fresh weight), mostly due to reduced outputs in Asia and Latin America and the Caribbean which would more than offset a marginal increase expected in Africa. In Africa, latest information indicates production will increase by 1.5 million tonnes, less than one percent, to reach 86.5 million tonnes. Larger harvests are estimated for Ghana, Kenya, Liberia, Mozambique, Nigeria, Tanzania, Uganda and Zambia. This was primarily the result of favourable climatic conditions which led to area expansion and higher yields. In some cases, government policies also promoted production. These measures were directed towards large-scale multiplication and diffusion of high yielding and disease resistant planting material, a progressive replacement of existing varieties with new ones and the promotion of new farm applications. For example, in Ghana, the recently launched Roots and Tubers Projects promotes the introduction of new cassava varieties more adapted to different food and industrial applications. In Tanzania, the Government under the National Agriculture Master Plan is giving high priority to crops such as cassava and sweet potatoes, to cover food deficit, resulting from shortfalls in sorghum and millet production. Similarly, in several parts of Uganda, banana plantations and sorghum/millet crops are gradually being replaced by new high-yielding and pest-resistant cassava varieties. By contrast, poor crops are reported for Benin, Cameroon, Chad, Republic of Congo, and the Congo Democratic Republic, following respectively dry conditions and widespread infestations of "cassava mosaic virus" that reduced plantings and yields. Civil strife in the Republic of Congo and internal conflicts in Rwanda also contributed to a reduction in output. No significant changes in cassava production are anticipated for other countries in the region.

In Asia, cassava output in 1998 is forecast at 45 million tonnes, 5 percent below 1997 largely as a result of weather related problems. The adverse effect of droughts related to the El Niño phenomenon, which manifested itself from mid 1997 until well into 1998, affected plantings and yields. Among the major producing countries in the region, output in Thailand is forecast at 16 million tonnes, 12 percent below 1997. Declines ranging between 5 and 20 percent are also anticipated in India, China and the Philippines.

In Latin America and the Caribbean, the 1998 cassava output is forecast at 29.5 million tonnes, 7 percent below 1997. As in Asia, the reduction was largely due to the adverse El Niño-related weather in several countries along the equatorial belt as well as in the southern hemisphere causing extensive crop damage and yield losses. In Brazil, the world's second largest producer and processor, output in 1998 is anticipated to fall to 21.5 million tonnes, 10 percent below the previous year's. Cassava production was severely affected by a prolonged drought stretching across 10 states in the northeast of the country, which account for about 40 percent of the national cassava production, and where this crop is also a major staple food. Similarly, in Venezuela cassava output is expected to be at most one-third below that of 1997. By contrast, modest increases are forecast for Bolivia, the Dominican Republic and Peru, as a result of increased plantings and yields.

WORLD CASSAVA PRODUCTION 1/

SOURCE: FAO
1/ In fresh roots.

In Africa, larger crops are expected to lead to increases in food consumption of fresh cassava and products, (gari, attiéké, foufou, kokonte, etc.) in 1998, partly as result of rising domestic prices of cereals, reflecting high import prices and the disruption of marketing systems due to civil strife in some countries. Recent surveys conducted in Ghana, Nigeria, and Tanzania have revealed that cassava flours and starch are increasingly been used as substitutes for imported wheat flour in the production of bread, snacks, pie/pastry and other food items. The replacement of up to 20-30 percent of wheat flour in bread and bakery products has been widely accepted by consumers, an attitude that highlights the potential of the crop to become an important input for the processed food sector in many African countries. In Ghana, for instance, the continued trend towards urbanization has led to a rapid increase in the market for convenience foods, such as bread, biscuits, pies and cakes. In these products, a proportion of imported wheat has been replaced by cassava, as rising prices and currency devaluations have encouraged food manufactures to look for local substitutes to wheat flour. In Nigeria, per caput consumption of cassava and products is expected to continue its upward trend as a result of economic difficulties, the loss of purchasing power and falling per caput incomes; these factors helped to maintain interest in cassava flour as a substitute for wheat to produce competitively priced products. Also, in Tanzania much of the food deficit in cereals is estimated to be covered by non-cereal crops, including cassava and other roots crops, such as potatoes and sweet potatoes.

In most countries of Latin America and the Caribbean cassava continues to be an important food staple and is widely processed in many small-scale as well as larger-scale, and increasingly sophisticated, industries. In Brazil, cassava starch is extensively used for human consumption in bread making and cassava flour as a side dish with meat and seafood. In the southern, central and western regions, for instance, the main cassava based fast-food, pão de queijo, a kind of bread made of sweet and sour cassava starches, cheese and eggs, is consumed traditionally virtually in every family. During the last five years, consumption of pão de queijo has been on the rise as it turned from a regional product to a nation-wide fast food. Cassava starch is also used as a thickener, a stabilizer in processed meat, as a base for colours and aromas and, in foodstuffs (cheese, cookies, ice creams, chocolates etc.), industrial products (i.e. paper, cardboard, textiles, pharmaceutical products, glues and adhesives etc.) and modified starches. While these cassava end-uses may have expanded, reductions in output this year are likely to result in reduced usage of cassava for animal feed. Fermented or sour starch extracted from cassava is used in Colombia to prepare snacks, traditional gluten-free cheese bread such as pan de yuca and pan de bono. Production of industrial starch on a medium-scale as well as in fully mechanized, processing plants have expanded in the northern coastal areas of the country. Also, some starch industries are currently diversifying into modified starch products. In Ecuador, cassava flour is commonly used to substitute for wheat flour and industrially in fillers for resins used for making plywood.

Overall cassava consumption in the Asian region is estimated to contract in 1998, with most of the decline concentrated in Indonesia, the Chinese Province of Taiwan, the Republic of Korea, the Philippines and Malaysia. All these countries imported less or no cassava as a result of the intensification of the economic crisis and falling demand in the livestock sector. In the Chinese Province of Taiwan, for instance, a contraction in the utilization of cassava chips and pellets in feed rations, reflects a slow-down in pig production. This is associated with a decline in demand as a result of economic problems and the on-going re-structuring of the sector after the occurrence of several cases of foot and mouth disease in 1997 and the concomitant loss of the Japanese market. In Thailand, cassava utilization in processed food and industrial products is also estimated to have contracted as a result of short supplies, rising costs and falling domestic demand.

Among the developed countries, in the EC, the utilization of cassava as animal feed in 1998 is expected to be less than in the previous year, despite a recovery in the pig industry from the swine fever outbreak that had lowered pig production in 1997, particularly in the Netherlands, Germany and Belgium. Within the EC, Spain and Portugal made larger use of cassava pellets for feed, mainly as a result of the shortfall of domestic barley supplies following planting reductions and unfavourable weather conditions and the reduction in stocks of maize. However, as a result of another above-average cereal output in the EC as a whole, the increased demand for protein meals and feeding stuffs could be met by a larger use of domestic feed grains reducing the level for non-grain feed ingredients, including cassava. In Japan and China, demand for chips and pellets is expected to be higher than in 1997 reflecting a slight expansion in pig herds in Japan and substitution of grains in animal feed in China.

Lower cassava trade in 1998

World trade in dry cassava products in 1998 is tentatively forecast to fall to 5.8 million tonnes (14.5 million tonnes in fresh root equivalent), 10 percent less than the revised estimate for 1997. This decline mainly reflects reduced shipments to both the EC and non-EC countries of chips and pellets for feed, which represent the bulk of international trade in cassava products. Trade in starch and flour for food and industrial use, accounting for 18 percent of world trade is expected to remain almost unchanged from last year.

WORLD TRADE IN CASSAVA 1/

SOURCE: FAO
1/ In product weight of chips and pellets. including starch and flour.
2/ Including Taiwan Province.
3/ Excluding trade between EC members.

Imports by the EC in 1998 are forecast to fall by 400 000 tonnes to 3.3 million tonnes, 12 percent less than 1997, and the lowest level in ten years, largely due to larger availability of domestically produced feed grains at competitive prices. A fall in imports is also expected in non-EC countries. In the first nine months of 1998, purchases by the Republic of Korea and the Philippines were much lower than in the previous year due to the economic difficulties. In the same period, other traditional importers, such as Israel, Poland, the Chinese Province of Taiwan and Turkey made no purchases of chips and pellets. By contrast, purchases by Japan and China were higher than 1997.

Between January and mid-September this year, Thailand shipped a total of 2.4 million tonnes of chips and pellets and about 472 000 tonnes of starch. Two million tonnes of chips and pellets went to the Community, mainly to the Netherlands (partly for trans-shipment) Belgium, Germany, Portugal and Spain. In particular, Spain bought some 25 percent more than in 1997, whereas Germany reduced its purchases to a very small amount reflecting a continued shrinkage of tapioca mixtures in feed rations. Another 400 000 tonnes of chips were shipped to non-EC countries including China, Japan, the Philippines, the Republic of Korea. Foreign sales by Indonesia are expected to be slightly higher than in 1997 but are nevertheless not expected to exceed 300 000 tonnes due to strong domestic demand.

Cassava pellets prices reached their lowest level

In the first nine months of 1998, the EC import price for cassava pellets, the major product traded internationally, continued the slide that began in September 1996, averaging US$103, or 6 percent below the corresponding period in 1997. The depressed prices were caused by the relatively weak import demand in the EC for tapioca chips and pellets, due to falling prices and abundant supplies of feedgrains. In the first nine months of 1998, quotations of barley were US$144 per tonne in the EC or 13 percent lower than in the corresponding period in 1997, while those for soybean pellets from Argentina (c.i.f. Rotterdam) reached US$174, or 38 percent below 1997. These price developments suggest that cassava/soybean mixtures would still be able to compete on a price basis with feedgrains, such as barley and maize in the European markets (see price table). However, following excessive rainfall at harvest time and harvesting of immature plants, Thai cassava roots were characterized by a very poor starch content in 1998. While EC import regulations specify quality standard for pellets with a minimum starch level of 60 percent (up to the mid 90's), more recently some Thai cassava pellet imports have been reported with starch content of below that level. A low starch content of pellets not only implies higher costs to feed millers but also causes serious problems in maintaining nutrition levels in the feed formulas. Some feed millers are reportedly prepared to pay as much as US$10 per tonne premium for pellets with a 70 percent starch content.

PRICES OF CASSAVA, SOYBEAN MEAL AND BARLEY IN THE EC

Production, trade and price outlook for 1999

Preliminary indications for global cassava production in 1999 point to some recovery in major countries in Asia and Latin America assuming that the effect of heavy rains related to La Niña remain contained. Also, expectations of higher export returns from value-added sales of starch flours and other products could, to a limited extent, lead to an expansion of plantings and a replacement of traditional planting materials by new higher yielding varieties with higher starch content. In Africa output could continue to increase due to producer's responses to higher cassava prices, and the on-going diffusion of recently introduced high-yielding and pest resistant varieties. An increase might also occur in Latin America and the Caribbean as technical improvements materialize.

The volume of world cassava trade in 1999 will depend on various factors, including the price developments for grains and protein meals in the EC and the availability in major exporting countries. The increase of the compulsory set-aside area for cereals from 5 percent to 10 percent in the EC for the coming crop year to reduce grain production and EC farm spending in the cereal sector could result in an increase in domestic grain prices. This in turn would render cassava more competitive in feed rations and lead to some expansion in import demand of alternative feedstuffs, including cassava chips and pellets. Export supplies could be particularly affected by the possible revisions of Thailand's export policy, which are currently under consideration, with respect to the allocation of the quota to the EC market. The renewal of the Agreement between Thailand and the EC, for the four-year period (1999-2002) represents another area of uncertainty regarding access quotas and in-quota tariff rates.