Feed industry urged
to use more tapioca
WALAILAK KEERATIPIPATPONG
Local tapioca manufacturers say the
government should buy at least five million tonnes of
cassava from the new crop in order to stabilise prices that
are expected to fall in a slowing market.
Industry surveys conducted last week
found that local cassava production from the 2008-09 crop
would be 29.15 million tonnes, a rise of 15% from the
previous crop, as a result of larger plantations and higher
yields.
Favourable prices last year driven by the
ethanol craze have induced planters, raising the harvesting
acreage this year above eight million rai, from 7.39 million
a year earlier. In addition, the average yield per rai has
improved to 3.64 tonnes from 3.4 tonnes, according to the
Thai Tapioca Trade Association.
Chen Wongboonsin, the association's
president said that in recent discussions with the Commerce
Ministry's Internal Trade Department, planters and
manufacturers agreed that tate intervention was necessary to
prevent a price slump.
Farmers are worried that slowing demand
from Europe and lack of clarity in the Thai government's
ethanol policy could push down cassava prices. The root is
currently fetching 1.70 to 1.80 baht per kilogramme, down
from 2.70 baht early this year.
They have proposed that the government
buy surplus output of around five million tonnes, at prices
between 1.90 and 2.20 baht per kilogramme.
The Internal Trade Department will
consider appropriate pledging prices to minimise the effect
on export prices and on the government budget.
According to Mr Chen, tapioca pellet
exports to the 27 countries of the European Union, the
largest buyer, are likely to decline as EU grain production
this year is up 25% to 304 million tonnes.
In the first eight months of 2008, the EU
bought about 1.4 million tonnes of pellets from Thailand to
use in livestock feed, about 500,000 tonnes higher than in
the same period last year. A severe drought in the EU last
year contributed to brisk sales of Thai tapioca pellets in
the first half of this year.
Mr Chen said he was confident that with
state intervention, the market would remain healthy thanks
to more demand from the local animal feed industry. It is
estimated that the industry will use as much as two million
tonnes of pellets to mix with soybean meal, resulting in the
equivalent nutritive value of maize.
As well, non-EU buyers that include South
Korea, the Philippines and Indonesia are significant markets
that could together import up to 500,000 tonnes of pellets
from Thailand next year.
Despite the decline in imports of tapioca
chips from Thailand this year, China is expected to remain a
big customer for the product, use largely in its alcohol
industry, as world maize prices are on the rise, reflecting
a forecast drop in US production.
He said that tapioca demand from the
native and modified starch industries also remained strong,
estimated at 15 million tonnes of roots next year. As well,
the opening of two or three new ethanol plants next year
would drive demand to at least two million tonnes of cassava
per year.
Currently, there is one ethanol plant
that uses cassava, with annual demand of 300,000 to 400,000
tonnes.
