FAO/GIEWS - Food Outlook, April 1998

CASSAVA

• Cassava production higher in 1997
• Demand on the increase
• Trade increased in 1997
• Cassava pellets prices reached their lowest level
• Production, trade and price outlook for 1998

Cassava production higher in 1997

The estimate of world cassava output in 1997 has been revised slightly upward since the last report in November 1997 and is currently put at 166.4 million tons of fresh roots, mainly reflecting increases in Africa and in Latin America and the Caribbean. Production in Africa, the major producing region, is estimated to have reached 85.2 million tons, one million above the previous season, primarily as a result of good climatic conditions which favoured an increase in plantings and yields. Larger crops were harvested in Benin, Cameroon, Central African Republic, Côte d’ Ivoire, Ghana, Liberia, Madagascar, Mozambique and Uganda. In Nigeria, (the world's largest producer), cassava output was estimated at 32 million tons, slightly above 1996. By contrast, poor crops were reported in Burundi and Kenya following dry conditions and in Tanzania, as result of a widespread infestations of pests, such as cassava green mites and mealybug, and diseases like cassava mosaic virus that reduced plantings and yields. Civil strife in the Republic of Congo and Sierra Leone, which disrupted farming activities, also contributed to a reduction in output. Little change in the crop size occurred in other countries of the region.

In Asia, total output in 1997 was estimated at 48.6 million tons, almost unchanged from the previous season. Among the major producing countries, output in Thailand was 4 percent above 1996 while in Indonesia it fell by 5 percent due to drought in the last months of 1997. In Vietnam, output was estimated at 2.1 million tons, unchanged from last year despite a shift of land of cassava traditional plantings to more remunerative crops, such as rice and maize. However, new cassava growing areas (former waste lands) in the south are being brought under intensive cassava cultivation using new high-yielding varieties, with large starch content, reflecting the strong interest of the starch industries.

In Latin America and the Caribbean, cassava output is estimated to have risen by 2.5 percent to 32.4 million tons in 1997, mainly reflecting a recovery in Paraguay, where producers have been shifting land from cotton to cassava, as well as increases in Bolivia, Columbia, Peru and Venezuela. By contrast, a contraction was recorded in Brazil, the world’s second largest producer and processor, as well as in Costa Rica and the Dominican Republic, reflecting reduced plantings and drought problems.

SOURCE: FAO
1/ In fresh roots.

Demand on the increase

In Africa, various factors have contributed to an expansion in the demand for fresh and processed cassava food products in 1997, including on-going policies aimed at reducing cereal imports and the disruption of grain marketing systems in some countries affected by civil strife. Recent surveys conducted in Côte d’ Ivoire, Ghana, and Nigeria have also revealed that cassava flours and starch are increasingly being used as a substitute for imported wheat flour in the production of bread, snacks, pie/pastry and other food items. The replacement of up to 20 percent of wheat flour with cassava flour in bread and bakery products in those countries has been widely accepted by consumers, an attitude which highlights the existing potential of the crop to become an important input for the processed food industry in many African countries. In other parts of the region, for instance in Tanzania and in Sierra Leone, cassava together with other root crops have continued to play an important food security role, helping to fill much of the 1997 food deficit in cereals. By contrast, cassava usage as feed remains rather small in the region because of a lack of processing and marketing facilities which limits its competitiveness vis-à-vis cereals based feedstuffs.

In Latin America and the Caribbean, overall usage of fresh and processed cassava rose, with most of the increase concentrated in Paraguay, Bolivia, Peru and Venezuela, as well as in countries of the Caribbean basin. In Brazil, cassava food consumption is estimated to have risen mainly to the detriment of its usage as feed. Food consumption increases were fostered by the growing popularity of cassava new products, for instance naturally fermented cassava starch, commonly known as "polvilho azedo" which has bread-making properties, in the food industry and in urban fast-food outlets. Similarly, greater use of processed cassava into unleavened bread commonly known as "casaba" has been reported in countries of the Caribbean basin. In line with changes of production, the utilization of cassava as feed is estimated to have risen in Bolivia and Paraguay but to have fallen in Brazil.

Overall cassava consumption in the Asian region is estimated to have fallen marginally in 1997, with most of the decline concentrated in Indonesia. However, it rose in several countries, in particular China, the Republic of Korea, the Philippines and Malaysia, which all imported more. Cassava utilization, much of which in processed food and industrial products, is estimated to be also up in Thailand despite larger exports.

Among developed countries, the utilization of cassava as animal feed remained close to the previous year’s level in the EC, the largest market for protein meals and feeding stuffs including cassava, despite the occurrence of swine fever disease in the main cassava using countries, in particular the Netherlands and Germany. Likewise, little change was recorded in Japan and the United States, while Israel resumed its purchases of pellets for feed utilization, which it had suspended since 1995.

Trade increased in 1997

World cassava trade in 1997 has been revised upward by 300 000 thousand tons, since last report, and is currently put at 6.3 million tons (15.8 million tons in fresh root equivalent), or 9 percent above 1996. Chips and pellets for feed usage accounted for 85 percent of the total, while flour and starch accounted for 15 percent, about the same proportions as last year. The expansion in cassava trade was mainly sustained by larger purchases by non-EC countries while imports by the EC remained about unchanged.

Shipments to non-EC destinations rose by 22 percent in 1997 to 2.8 million tons, representing 44 percent of global trade. Much larger purchases were made by China, Indonesia, Israel, Malaysia, Japan, the Republic of Korea, Pakistan, the Philippines, Singapore and Turkey. The increase in China reflected larger imports of flour and starch, following a cut in import duty from 35 to 20 percent, but also of chips and pellets. Increased imports of flour and starch explain most of the increases in the other countries, except in the case of the Republic of Korea, which only purchases chips and pellets for use in alcohol and feed production. Cassava imports by the EC, which continue to be limited through Co-operation Agreements with the main exporters, remained unchanged around at 3.5 million tons in 1997, reflecting mainly prevailing policies of the major supplying countries to the Community, which aimed primarily at satisfying growing domestic markets.

Growth in global cassava exports in 1997 was driven by increased deliveries from Thailand, which supplies about 80 percent of international trade. Total shipments of cassava products from this country were estimated at 5.1 million tons or 11 percent above 1996, with total export of chips and pellets amounting to 4.1 million tons. Foreign sales by Indonesia in 1997 were estimated at 400 000 tons, about the same level as last year, reflecting the crop shortfall and the Government export restrictions as it strived to meet domestic requirements. In particular, Indonesia’s deliveries to the EC amounted to less than 100 000 tons, considerably below the 866 000 tons quota it is entitled to export there. Among the other traditional cassava exporters, sales by China and Vietnam are estimated at the same level as in 1996. The two countries, which are both exporters and importers of cassava products, failed to fulfil, like Indonesia, their quotas to the EC due to increased domestic demand and a diversion of supplies to other markets. Shipments by minor exporters in Africa, Latin America and the Caribbean and Asia remained of the order of 400 000 tons.

Cassava pellets prices reached their lowest level

In 1997, the EC import price for cassava pellets, the major cassava product traded internationally continued to trend downward, falling by 29 percent to US $ 108 per ton, the lowest level for the last ten years. Cassava prices suffered from relatively weak import demand for tapioca chips and pellets in the EC compared to the previous season, caused mainly by the swine fever outbreak, falling domestic feed grain prices and stronger protein meal quotations. On the supply side, the price decline also reflected the poor starch content of the roots in Thailand following excessive rainfall at harvest time. At the same time, in 1997, quotations for barley, a major competitor in the feed market were US$161 per ton in the EC, or 17 percent lower than then the average in 1996, while those for soybean pellets from Argentina (c.i.f. Rotterdam) reached an annual average of US$276 per ton, or 3 percent above 1996. Despite the small increase in soymeal prices and falling quotations for barley (see table), cassava/ soybean mixtures in the Community remained attractively priced largely because of the sharp decline in cassava prices.

Production, trade and price outlook for 1998

Preliminary indications for global cassava production in 1998 point to a strong contraction, due to adverse El-Niño related weather in several countries along the equatorial belt as well as in the southern hemisphere. Smaller crops are anticipated in a number of western and southern African countries, including Congo Democratic Republic, Benin, Tanzania and Uganda, where cassava plays an important role in food security. Morevover, should drought conditions persist, production shortfalls could be recorded in 1998 in major producing countries such as Brazil, Indonesia and Thailand.

Reduced production in the latter two countries could result in a contraction in the global volume of trade in 1998, especially in view of current expectations of falling world prices of feed grain and abundant feedstuffs in the EC. The decline in trade is expected to reflect smaller shipments of chips and pellets for feed while trade in flour and starch might increase.

Reduced cassava supplies might put domestic and international prices under some upward pressure. Already, domestic root prices in Thailand have reached a historical high, in local currency terms, of 2.30 Baht/kg (US$ 52.6 per ton)^1/ during the first half of March 1998, compared with 1.03 Baht/kg (US$ 39.8 per ton)^2/ during the same period last year. On international markets, Thai tapioca flour/starch export prices, FOB Bangkok, rose from US $ 250 per ton in March 1997 to US $ 325 per ton in March 1998. At the same time, while cassava pellets prices exported to the EC in the first two months of 1998 fell, the prospects for declining soybean prices may give some scope for cassava pellet prices to rise. However, this will depend to a large extent on the changes of feed grain prices in the EC markets.

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1/ At the average exchange rate of 43.7 Baht per US$ as of mid-March 1998.
2/ At the average ex change rate of 25.82 Baht per US$ as of mid-March 1997.