FAO/GIEWS - Food Outlook No.5 - November 1999 p. 10

CASSAVA

• Cassava production on the rise in 1999
• Cassava utilization expands in 1999
• World cassava trade to recover in 1999
• Cassava prices weak or falling
• Production, trade and price outlook

Cassava production on the rise in 1999

Global cassava production in 1999 is forecast to be back on trend, as it recovers fully from the contraction experienced by the sector in 1998, in the aftermath of the El Niño and La Niña weather anomalies. World output in 1999 is forecast to grow by 3.5 percent to 166.7 million tonnes in root equivalent, sustained by increases in Asia and in Latin America and the Caribbean which should more than offset a contraction in Africa.

In Asia, cassava output is forecast to rise by 11 percent to 50.2 million tonnes as a result of an expansion in area and favourable weather. Among the major producing countries in the region, output in Thailand is forecast at 20.3 million tonnes, 24 percent above the drought-reduced 1998 crop, following a 12 percent expansion in plantings and good prospects for higher yields. Apart from favourable weather, almost half of the 1.2 million hectares under cassava cultivation have reportedly been planted with improved strains, which should contribute to the rise in productivity. Production increases ranging from 2 to 5 percent are anticipated in China, India, Indonesia, and the Philippines. By contrast, in Viet Nam, output is expected to remain close to the previous year's level as higher yields brought about by the greater diffusion of improved varieties are expected to be offset by a contraction in plantings.

In Latin America and the Caribbean, the 1999 cassava output is forecast at 31 million tonnes, 12 percent more than last year's poor crop but still 1 million tonnes less than in 1997. In Brazil, the region's largest and the world's second largest cassava producer, output is forecast to recover only partly from 1998, following larger crops in the centre south and northeast states. Substantial growth in production is also anticipated in Colombia while modest increases are likely in Costa Rica, the Dominican Republic, Peru and Nicaragua.

Output in Africa, the world's major producing region, is forecast to contract by 3 percent to 85.5 million tonnes, reflecting poor crops in some major producing countries, including Angola, Burundi, the Congo Democratic Republic, Sierra Leone and Rwanda, where production activities have been disrupted by population displacements and civil strife. In Kenya, Uganda and Tanzania, a prolonged drought is seriously affecting crop production. In Nigeria, government estimates for the 1999 crop point to a reduction of 1.5 million tonnes. By contrast, cassava output is expected to increase in Ghana, following the implementation of the Roots and Tuber Improvement Programme that promotes the introduction, multiplication and distribution to farmers of pest and disease resistant planting materials. Although increases are also forecast in Cameroon, Liberia, Madagascar, Togo and Zambia, they are likely to be modest.

WORLD CASSAVA PRODUCTION 1/

Cassava utilization expands in 1999

The increase in global production is expected to boost world food utilization of cassava by two percent to 98 million tonnes in 1999, with most of the increase concentrated in Asia and in Latin America and the Caribbean. By contrast, in Africa where cassava is a major staple, food utilization of cassava is likely to fall by 3 percent to 58 million tonnes. Feed utilization is anticipated to increase world-wide, with the major increases expected in South America and in the EC. However, at the forecast level, feed utilization of cassava would still fall short of that in 1997, reflecting keen competition from the grains sector. The volume of cassava processed into non-food products is also anticipated to rise, boosted by low international prices for cassava starches and the economic recovery in Asian countries.

In Africa, the fall in production in 1999 is likely to be felt mostly through a decline in food consumption of fresh cassava and products (gari, attiéké, foufou, kokonte, etc.). The contraction will mainly affect the rural populations, which rely to a larger extent on the crop for their livelihoods, but also the urban population as retail prices for cassava have been reported to have risen sharply in most countries. The reduction in cassava food consumption is forecast to be especially marked in Angola, the Congo Democratic Republic and Rwanda.

In Asia, the larger crops in 1999 are expected to lead to a 9 percent growth in utilization. In particular, cassava utilization in feed, alcohol and starch production is likely to expand in 1999 in Thailand and Viet Nam. Food consumption of cassava in China, the Philippines, the Republic of Korea, Malaysia and Japan, which rely mainly on imported supplies, is forecast to remain close to last year's level.

In Latin America and the Caribbean, cassava is an important food staple in a number of countries, but a large share is used as feed in the producing areas. Industrial utilization of cassava in the region by small and large scale factories has been growing in the past decade, as the crop has moved from being a subsistence to a market-oriented crop, providing raw material for the manufacture of food products, feed and industrial applications. The recovery in production in 1999 should help sustain an all-round increase in cassava use.

Among the developed countries, in the EC, the utilization of cassava as animal feed is forecast to increase from last year stimulated by competitive cassava pricing. Spain and Portugal, in particular, are forecast to step up their use of cassava pellets for feed this year, to compensate for a shortfall in barley production. Italy is anticipated to use, for the first time, substantial quantities of cassava chips and pellets for animal feed. By contrast, cassava use is anticipated to fall in Japan and in the other developed countries, including Israel and Poland.

World cassava trade to recover in 1999

World trade in dry cassava products (also called "tapioca") is forecast to increase by 12 percent in 1999 to about 5.5 million tonnes (16 million tonnes in fresh root equivalent), recovering only partly from the 23 percent contraction last year. Of the total, 4.6 million tonnes are anticipated to be traded in the form of chips and pellets and 900 000 tonnes in the form of cassava flour, up from 3.9 million tonnes and 700 000 tonnes, respectively, in 1998. The increase should be sustained by relatively large export availabilities in Thailand and by increased import demand for chips and pellets by the EC. Little change in imports by non-EC countries is currently anticipated.

WORLD TRADE IN CASSAVA 1/

The production recovery in Thailand has been the main engine for growth in cassava trade in 1999. Between January and mid-October this year, exports of tapioca chips and pellets by Thailand reached 3.4 million tonnes, 38.4 percent more than during the same period in 1998. Of those, 3.27 million tonnes were destinated to the EC, up from the 2.1 million tonnes delivered in January-mid-October 1998. Sales to the EC, however, are likely to continue at the same rate during the remaining part of the year, despite the abundant supplies of the new cereal crop and high grain inventories in member countries. As a result, Thailand's exports of cassava products, including flour, are anticipated to reach some 4.6 million tonnes in 1999, up from 3.9 million tonnes in 1998, yet substantially below the 5.3 million tonnes exported in 1997. Despite good crop prospects, foreign sales by Indonesia and Viet Nam are expected to remain close to last year's level while those by China may contract, reflecting strong domestic requirements in those countries.

Purchases by the EC are forecast to recover from the low 2.9 million tonnes in 1998 to some 3.6 million tonnes this year, reflecting larger shipments to the Netherlands, the main port of entry of cassava products, Belgium and Italy, and to the drought-stricken Spain and Portugal. At that level, imports would barely reach half of the 6.8 million tonnes that are allowed preferential access to the EC. Cassava shipments to non-EC markets, the majority of which are in Asia, are expected to total 1.9 million tonnes, unchanged from last year. Purchases of cassava chips and pellets by China, Japan, the Republic of Korea are anticipated to fall. By contrast, imports of cassava starch by Japan and the Chinese Province of Taiwan are likely to exceed last year's level.

CASSAVA AND CASSAVA PRODUCTS PRICES IN THAILAND

Cassava prices weak or falling

International cassava prices have remained weak in 1999, since abundant supplies have coincided with a weak demand world-wide. Quotations of cassava pellets in the EC (respectively the most important cassava product traded internationally and the main cassava import market) are determined by the domestic prices of grains, especially barley, and the prices of protein-rich meals which supplement cassava to obtain a balanced, grain substituting, compound. In the first nine months of 1999, the EC import price for cassava pellets averaged US$102 per tonne, close to the level prevailing during the corresponding period in 1998, but 36 percent less than in 1993, when implementation of the CAP reform began. Quotations for barley in the EC in the first nine months of the year have also remained mostly unchanged and have averaged US$144 per tonne in Spain, one of the major cassava users in the Community. Soybean meal prices, on the other hand, fell to US$146 per tonne (c.i.f. Rotterdam), or 16 percent below the same period in 1998. As a result, the cassava/soybean meal blend has become slightly more attractive than last year in the EC, which has helped sustain cassava utilization in member states. International prices of cassava starches and flours, which are traded principally among Asian countries, have been on a downward trend for most of the year and have fallen to US$163 per tonne in July-August 1999. Up to August 1999, they have average US$176 per tonne, considerably below the US$305 per tonne prevailing in January-August 1998, and the lowest level since 1988.

PRICES OF CASSAVA, SOYBEAN MEAL AND BARLEY IN THE EC

Production, trade and price outlook

Preliminary indications for cassava production in 2000 point to a recovery in Africa, assuming normal growing conditions and improved security in those countries currently affected by civil strife. An increase is also anticipated in Latin America and the Caribbean, especially in Brazil where demand for food has strengthened and prompted an increase in plantings. The interest in promoting the cassava sector in the region has recently given rise to the establishment of a consortium, CLAYUCA, composed of public and private institutions, that strives to support research and development of the cassava sector in the region. In Asia, production is expected to rise in Indonesia, where the Government has recently announced its intention to reduce the country's dependence on rice imports through the promotion of alternative crop production, including cassava. By contrast, low farm prices in Thailand during most of 1999 may lead to reduced plantings next season.

Very early prospects for cassava trade in 2000 suggest virtually no change from the current year, since large supplies of feed grains in the EC are likely to limit any further recovery in import demand among member states. Future prices of cassava chips and pellets will depend largely on the pattern that the EC grain prices will follow. Given the large carry-over grain stocks currently held in the Community, their prices are unlikely to increase by a substantial amount in the next few months. As a result, cassava pellets prices may remain weak for the rest of the year and during the first half of 2000, unless affected by variations in the exchange rates or in oilmeals prices. There is much uncertainty regarding the future prices of cassava starch, with their recovery depending largely on the consolidation of the economic growth in Asia to revitalize demand.