FAO/GIEWS - Food Outlook No.4 - October 2001 p. 11

Global cassava production rises by 1 percent

Cassava pellets prices remain depressed while they recover for starches/flours

Outlook for 2002

Cassava

Global cassava production rises by 1 percent

Global cassava production in 2001 is forecast at 178 million tonnes, only 1 percent more than in the previous year. Most of the expansion reflects increases in Africa and Latin America and the Caribbean, while little change is currently foreseen in Asia.

World Cassava Production 1/

Source: FAO
1/ In fresh roots

In Africa, cassava continues to be a central crop for food security programmes in several countries, especially because of its resistance to drought. In most cases, the emphasis is put on enhancing productivity, through the introduction of improved varieties. For instance, in Ghana current new varieties yield 2.3 times higher than the local varieties. These new varieties yield between 25 to 32 tonnes per hectares. However, countries such as Cameroon are now shifting their attention towards post-harvest activities that aim to reduce marketing losses. FAO forecasts for the region currently put cassava production at 95 million tonnes, 1 percent more than last year, sustained by an expansion in Angola, Benin, Burundi, Ghana, Liberia, Mozambique, Nigeria and Uganda. In these countries, the sector has benefited from an expansion in plantings and from favourable climatic conditions, which have boosted yields. By contrast, a contraction is anticipated in the Democratic Republic of Congo, where persistent insecurity problems have continued to disrupt agricultural activities. In addition, production is likely to fall in Malawi and Zambia, where flooding seriously damaged the crop, but also in Tanzania and Rwanda, where drought has reportedly affected cassava growing areas, and in Cameroon, because of the spread of pests and diseases, which have dimmed crop yield prospects.

In Latin America and the Caribbean, cassava output is forecast at 33.3 million tonnes, 1.4 million tonnes higher than in 2000, with much of the increase concentrated in Brazil. In this country, the cassava harvest is anticipated to grow by 4 percent to 24.2 million tonnes, lifted by larger plantings in the centre-south and middle-western states. Since 1998, rising cassava market prices in the country have encouraged producers to modernise the sector and to grow cassava under irrigation. Production is anticipated to expand also in Colombia, Paraguay, Haiti, Nicaragua and Peru, in response to an increasing domestic demand for food and other usages. The crop is the object in the region of a comprehensive programme, sponsored by both public and private organizations, to enhance cassava production, processing and utilization in the region (see box on page 24).

In Asia, cassava production in 2001 is likely to stagnate around 49 million tonnes. Thailand and Indonesia, the two major regional producers, have both reported reductions in outputs of about 3 percent. In Thailand, the decline reflects the slide in cassava root prices since 1999, which has encouraged farmers to switch to other crops. The diversification process was limited, to some extent, by large intervention purchases by the Government in the past two years, which helped dampen the price fall. Between November 2000 and January 2001 the government purchased about 3 million tonnes of roots directly from the farmers at a price of 0.85 Baht/kg to produce tapioca chips and starch for export. In Indonesia, the expected contraction would stem from a decline in plantings, as falling prices of rice, which competes directly with cassava in human consumption, depressed domestic demand for cassava products. By contrast, output is anticipated to rise by 11 percent in India, sustained by growth in plantings in Tamil Nadu and Andhra Pradesh. Production is forecast to expand also in Myanmar and Cambodia due to increases in plantings and yields.

Prices of Cassava, Soybean meal and Barley in the EC

Source: FAO, Oil World and Agra-Europe.
1/ F.o.b. Rotterdam (barge or rail), including 6% levy. 2/ Argentina (45/46 % proteins) c.i.f. Rotterdam until September 1999. As from October 1999 Argentina (44/45% proteins) c.i.f. Rotterdam. 3/ Consisting of 80% of cassava pellets and 20% of soybean meal. 4/ Selling price of barley in Spain. 5/ January-August average.

World trade in cassava products in 2001 is tentatively forecast at 7.3 million tonnes (in product weight of chips and pellets)  6 percent above last year and substantially more than earlier anticipated. Of the total, 4.7 million tonnes are estimated to be traded in the form of chips and pellets and 2.6 million tonnes (1.3 million tonnes in product weight) in the form of starch and flour^1/ for food and industrial use. Imports by the EC are forecast to fall by 1 million tonnes to 2.7 million tonnes, depressed by a slackening of demand^2/ in the Netherlands and Spain, where the occurrence of BSE and FMD have led to a fall in meat production. The contraction in EC imports should be more than compensated by larger purchases by countries in the Far East, in particular China. In the first eight months of 2001, this country bought 1.5 million tonnes of chips and pellets from Thailand, compared with only 14 000 tonnes a year earlier, at prices ranging from US$50 per tonne to US$60 per tonne. The rise was mainly in response to unfavourable sweet potato crops in the main growing regions, which has encouraged a shift towards cassava utilization in feeds. Increased cassava purchases are also anticipated to be made by the Philippines, the Republic of Korea, Japan, China, Hong Kong SAR.

Between January and August this year, Thailand shipped 3.6 million tonnes of chips and pellets, compared with 2.6 million tonnes in the same period last year. Much of the increase reflects a surge in sales of chips and pellets to China, mainly from stocks held by the Thai Public Warehouse Organization after the government launched, last year, a purchasing programme for cassava chips, pellets and flour in support of producer prices. As a result, overall exports of cassava products by Thailand this year are forecast at 7 million tonnes, about 0.5 million tonnes more than in 2000. By contrast, sales of cassava products from Indonesia, which are mostly destined to China and the Republic of Korea, are anticipated to remain below the 150 000 tonnes exported last year. Other exports are mostly limited to border or intra-regional transactions, which are often not recorded in the official statistics.
Some instances of officially reported sales in Africa include Ghana with some 10 000 tonnes and Côte d'Ivoire with 2 000 tonnes. Within the Far East, India officially forecast 1 700 tonnes of exports of tapioca starch, sago, flours and meals. In Latin America and the Caribbean, shipments from Costa Rica were reported at 11 000 tonnes this year down from 42 000 tonnes in 2000. Lastly, about 10 000 tonnes were expected to be shipped by Brazil, mainly in the form of cassava flour. Overall, shipments from exporters other than Thailand and Indonesia are put at some 170 000 tonnes in 2001, somewhat less than last year.

World Trade in Cassava 1/

Source: FAO.
1/ In product weight of chips and pellets. Since the June issue of Food Outlook, trade in flour or starch has been added in pellets equivalent (1 tonne of flour or starch equal to two tonnes of pellets). 2/ Excluding trade between EC members. 3/ Including Taiwan Province.

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1/ Since the June issue of Food Outlook trade in starch and flours has been added in pellets equivalent (1 tonne of flour or starch is equivalent to two tonnes of pellets). 2/ Under Agenda 2000, the cereal intervention prices have been reduced from the starting level of Euro 119.19/tonne to Euro 110.25/tonne in the previous season and to Euro 101.31/tonne for the current 2001/02 season.

Cassava pellets prices remain depressed while they recover for starches/flours

International cassava prices have continued to fall during most of the year mainly reflecting a weak import demand in the EC. In the first eight months of the year, the EC import prices for cassava pellets averaged US$81 per tonne or 8 percent less than in the corresponding period in 2000. By contrast, Thai export
prices of cassava starch and flours recovered to US$185 per tonne in July-August 2001, up from US$159 per tonne in the corresponding period of last year.

Outlook for 2002

Global cassava production in 2002 is forecast to experience a moderate expansion again next year, assuming normal growing conditions. In Africa, production could increase, stimulated by rising demand and the positive effects of on-going programmes to promote the cultivation of high-yielding, pest and disease resistant varieties. In Latin America and the Caribbean, further gains in output could also be achieved. In particular, in Brazil and Colombia a rise in cassava market prices this year should induce producers to expand cassava cultivation. By contrast, cassava production is expected to contract further in Asia. Results from a recent survey conducted in Thailand, point to a 2.5 percent contraction in output to 17.8 million tonnes next season. Such a fall would stem from a drop in plantings of nearly 6 percent, which is expected to be partially compensated by a 3 percent boost in yields, following a greater usage of improved varieties.

Current prospects for cassava trade in 2002 remain uncertain. On the one hand, a possible strengthening in cereal prices next season in the EC might support a recovery in import demand for cassava products by

member countries. On the other, this might be dampened by the contraction in livestock herds in some of the major EC cassava users. There is also considerable uncertainty regarding the maintenance of large purchases by China, which were made, this year under specially favourable price conditions. Given the prospects of a smaller crop in Thailand, domestic prices could indeed recover from the extremely low levels that have prevailed since 1999. As for cassava pellet export prices, current forecasts point to some recovery next season, consistent with the prospects for firm cereal prices in the Community. Likewise, prices of cassava flour could continue on an upward trend, mainly reflecting a tightening of supplies in Thailand.

Cassava and Cassava Products Prices in Thailand

Source: Thai Tapioca Trade Association, Market Review.