|No. 3||Rome, June 2003|
World cassava output in 2002 is estimated at 184 million tonnes in fresh root equivalent, which would be about 2 percent above the record of the preceding year, reflecting an expansion in cassava cultivation in Africa and Latin America and the Caribbean that has more than offset a contraction in Asia.
Much of the growth in global production in 2002 originated in Africa, where some 99 million tonnes of cassava were harvested, 3 percent more than in 2001. Cassava continues to be an essential crop for food security in several countries in the region, primarily owing to its resistance to drought. For instance, poor rainfall in 2002 in Mozambique, Madagascar, Malawi and Rwanda favoured an expansion of their cassava output. Moreover, record cassava crops in Nigeria, the world’s leading producer, Ghana and Guinea and Uganda were in part due to policies conducive to the enhancement of food security, along with favourable weather conditions. These bumper crops also reflected the diffusion of high yielding and disease resistant planting material, a progressive replacement of existing varieties with new types and the promotion of new farm applications. In Tanzania, production in 2002 rebounded from the preceding year. Improved security conditions stimulated cassava production also in Angola and Sierra Leone, where it rose by 7 percent and 30 percent respectively. Small to moderate growth was recorded in Burundi, Cameroon, Congo, Mali and Uganda. By contrast, cassava production in the Democratic Republic of Congo continued to be disrupted by population displacement and civil strife. These negative influences were compounded by an outbreak of mosaic disease in southern districts, resulting in production dropping to a 20-year low in the country in 2002. According to official sources in Benin, despite a sharp expansion in cassava area, production in the country fell by 10 percent.
World Cassava Production 1/
1/ In fresh roots.
In Latin America and the Caribbean, output rose by almost 5 percent to 33.2 million tonnes, partly fuelled by a drift away from cash crop commodities into cassava. For instance, the slump in international coffee prices is reported to have induced producers to either intersperse or replace coffee trees with cassava plantings, especially in Colombia, Ecuador and Peru, where production reached record highs. Low coffee prices were also behind a marked increase in cassava output in Brazil, despite lower cassava prices in that country, compared to the preceding year. Similarly, Paraguay registered a record cassava crop, as producers shifted land away from cotton to cassava.
By contrast, Asia witnessed a 2 percent contraction in cassava output in 2002 to 51.5 million tonnes. Most of this decline reflects a major crop failure in Thailand, following flooding problems in the country that depressed yields and suppressed the positive effects a domestic price recovery had had on plantings. According to official sources in the country, production fell by almost 1 million tonnes to 17.3 million tonnes.
The region’s second leading producer, Indonesia, also experienced a 2 percent contraction, while little change in output was estimated for China and the Philippines. The effects of low international coffee prices were also felt in Viet Nam, where cassava production rose by some 11 percent; while sparse and erratic monsoon rains in India stimulated an expansion in plantings in southern and eastern states that boosted somewhat the country’s overall output by around 2 percent.
Global cassava utilization as food is estimated at 108 million tonnes in 2002, almost 2 million tonnes more than in 2001, the bulk of which is consumed in Africa in the form of fresh roots and processed products. Global cassava utilization as feed is estimated to have remained of the order of 50 million tonnes, most of which is concentrated in Latin America and the Caribbean, China in Asia, Nigeria in Africa and the EU.
Utilization growth is very much in line with production, given the fact that proper cassava stocks are held only in relatively modest quantities and in dried form, since the commodity is mostly kept under the ground in the form of roots until they are needed and harvested. On a per caput basis, global cassava availabilities in 2002 are estimated to be in the order of 33.6 kg (root equivalent), up 1.5 percent from 2001.
In Africa, food cassava consumption is estimated to have risen by almost 3 percent to around 67 million tonnes in 2002 or 82 kg on a per caput basis. Large to moderate production gains supported increases in apparent food consumption of cassava in Nigeria, Ghana, Guinea, Mozambique, Angola, Tanzania, Uganda and Zambia. On the other hand, it fell markedly in those countries that experienced a contraction in production following climatic or civil strife, especially the Democratic Republic of Congo and Benin. The rural population, which relies to a larger extent on the crop for subsistence, was the most affected.
In Asia, cassava utilization as food is estimated to have fallen in 2002 by around 2 percent to some 26 million tonnes or 7kg on a per capita basis. In Indonesia, the cassava production shortfall undermined the country’s policy of promoting cassava food consumption to reduce the country’s dependence on cereal imports. On the other hand, cassava utilization in feed, alcohol and starch production expanded in Viet Nam, made possible by a large increase in output, while it fell in countries that rely heavily on imported supplies, for instance the Republic of Korea, Malaysia and China. In the Republic of Korea, the fall in cassava usage also reflects the government policy aimed at curtailing the size of its rice stocks by diverting rice supplies to feed, at the expense of cassava.
In Latin America and the Caribbean, the expansion in production is estimated to have boosted cassava utilization for both food and feed, especially in Paraguay, Colombia and Brazil. In the latter country, food consumption was further stimulated by the mandatory inclusion of cassava flour in wheat flour, an initiative launched by the Government to reduce the country’s dependency on wheat imports.
Utilization by the developed countries, which is all based on imports, fell by 38 percent in 2002. This sharp contraction reflected to a limited extent a tightening of international supplies from Thailand and Indonesia and, especially, developments in the EU grain market. A bumper cereal output in Europe and consequent low prices vis-à-vis prices of grain substitutes, meant that feed demand could increasingly be met from grains thereby reducing imports of cassava.
International trade in aggregate dry cassava products (also called tapioca) underwent a sharp contraction in 2002, falling by 19 percent to just under 6 million tonnes (in cassava pellet equivalent). Despite a slight increase in the volume traded in the form of flour and starch, which stood at 2.6 million tonnes (1.3 million tonnes in product weight), trade in chips and pellets fell by 33 percent to 4.5 million tonnes.
World Trade in Cassava 1/
1/ In product weight of chips and pellets
2/ Excluding trade between EU members
3/ Including Taiwan Province.
Against the backdrop of declining trade, a major shift in the structure of international trade occurred in 2001, when imports by the developing countries surpassed those by the developed countries, for the first time. Indeed, in 2002, developing countries in the Far East were the major destination for international trade flows in cassava, importing around 3.4 million tonnes in aggregate. China, the leading cassava importer in 2002, with a share of 42 percent of the global market, procured around 2.5 million tonnes (mostly feed ingredients), slightly below the volume of the preceding year. As for other countries in the region (which mainly purchase cassava starch and flour) smaller volumes were shipped to Indonesia, Malaysia and Singapore. Inflows of cassava to the Republic of Korea were down by more than a half, as the government provided incentives to substitute rice products for rice under a recent policy plan aimed at cutting rice inventories.
Much of the contraction in global cassava trade was concentrated in the EU, for years the major destination of cassava shipments, which it principally imported in the form of pellets for the feed industry under a low tariff rate preferential quota. In 2002, however, the EU imports declined sharply by 43 percent to 1.5 million tonnes, reflecting the loss of competitiveness of cassava feed products vis-à-vis domestically produced grains.
Although the major cassava producers are located in Africa and Latin America and the Caribbean, countries in those regions have failed to gain a significant share of the global cassava market, mainly because of their high production costs and the difficulty they face in accessing markets and maintaining regular flows of quality product. Thailand continues to hold a dominant position, with a share of around 95 percent of world exports. The other traditional cassava suppliers are Indonesia and China, though they have also become sizeable cassava importers in recent years. Falling quotations of cassava pellets in the EU since the 1992 CAP reform have pressured exporters to diversify their cassava markets, especially into the Far East.
In 2002, exports of cassava products from Thailand fell by 20 percent to 5.7 million tonnes, reflecting a poor harvest. Shipments by the country to EU member states amounted to about 1.5 million tonnes, substantially short of the 5.25 million tonne specific preferential access granted to Thailand by the EU, but were easily compensated for by buoyant demand in China. International sales by Indonesia, which are mostly destined for China and the Republic of Korea (despite a quota of 866 000 tonnes per annum with the EU), fell by a third to 100 000 tonnes, while the figure for minor exporters, amounted to 150 000 tonnes, unchanged from 2001.
International quotations for cassava products were on average higher in 2002 than in the previous year. A tightening of exportable supplies in Thailand and steadfast demand in the Far East, particularly China, were by and large, behind the strengthening of international prices.
Beginning with cassava chips, average annual quotations, for destinations principally in the Far East, rose by over 8 percent to US$64 per tonne f.o.b. Average quotations of cassava pellets in the EU, after falling uninterruptedly since 1996, staged a recovery in 2002, climbing to US$90 per tonne f.o.b., almost 10 percent higher than in the previous year. Along with the price of the raw material, pellet prices in the EU are determined by the domestic prices of grains, especially barley, and the prices of protein-rich meals, such as soybean meal, which supplement cassava to obtain a balanced, grain substituting, compound. Despite declining prices of soymeal, the firming of cassava prices raised the cost of the cassava/soybean meal mixture in 2002 compared with the previous year.
International prices of cassava starch and flour also recovered in 2002, rising by US$11 to US$186 per tonne f.o.b., which again reflected tight supplies of raw material, but also a revival in demand throughout the Far East.
Prospects for cassava production in 2003 are still subject to a large degree of uncertainty, especially in Africa where the crop plays a critical role for food security. In that region, the roots are often left in the ground for over one year and are only harvested when food shortages arise, which makes an assessment of production particularly difficult. Of great concern is the prevalence of civil strife and internal conflict in the region. Among important cassava growing countries, Angola, Central African Republic, Republic of Congo, Democratic Republic of Congo, Cote d’Ivoire, Guinea, Sierra Leone, Tanzania and Uganda, are viewed likely to suffer some contraction in output owing to a deterioration in their security conditions. In Nigeria, despite favourable weather conditions in the country, an outbreak of mosaic disease has placed its cassava crop under some jeopardy, threatening the Government’s recently announced initiative to expand production for value-added cassava products.
Cassava and Cassava Products Prices
Source: Thai Tapioca Trade Association, Market Review.
A marginal recovery is expected in Asia, assuming a return to normal climatic conditions, especially following the annual planting survey in Thailand which pointed to a 2 percent increase in production in 2003. The establishment, last year, of a local futures exchange for commodities including cassava may also bring about some stability to the sector in the country. Production is expected to rise in Indonesia, where the Government recently reiterated its intention to reduce the country's dependence on rice imports through the promotion of alternative crop production, including cassava.
A further production expansion is foreseen in Latin America and the Caribbean, especially if international coffee prices fail to recover. In addition, a rise in support prices of cassava in Brazil should induce producers to expand cultivation of the crop in the country.
International trade in cassava products is currently forecast to expand, given an expected recovery in exportable supplies in Thailand during the current season. Based on the pace of shipments of pellets and chips by the country to date, exports during January to mid April 2003 were around 3 percent higher than during the same period last year and, in contrast to 2002, the majority of shipments have been in the form of cassava chips to the Far East. Thus, countries in the region are again likely to displace the EU as the major world cassava import destination this year. Regarding imports by the EU, from January to the first week in May 2003, the Commission had only released import certificates for approximately 500 000 tonnes of cassava pellets, about 400 000 tonnes less than in the corresponding period in 2002. This slow start was mainly the result of highly competitive feed grain pricing. Indeed, while the price ratio between the cassava/soybean meal mixture and barley had given a 30 percent competitive edge to the latter in past years, in the latest months the differential was less than 10 percent.
Contrasting price trends among cassava products have arisen in the year to date. For instance, international quotations of cassava pellets exported to the EU recovered somewhat from last year, averaging 12 percent more in the first quarter than in the same period last year. By contrast, international prices of cassava starch were on average down compared with the first few months of 2002, but were showing signs of buoyancy against quotations of the latter half of last year. Since the EU cassava market is expected to remain depressed in 2003, the outlook for global prices will depend mainly on countries in the Far East maintaining large international purchases.
Prices of Cassava, Soybean meal and Barley in the EU
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-April average.