Display mode (Doesn't show in master page preview)

11 Aug 2016


Shredded Cassava Exports Exhibit Bleak Prospects Amid Risks in China(Current Issue No. 2763 Full Ed.)

Although there is continuing demand for Thai shredded cassava from China's alcoholic beverage and ethanol industries, the outlook for exports of that product to the world's most populous nation – being our main market for shredded cassava – looks quite gloomy in terms of value and volume due to a number of impediments. These include China's decision to use stockpiled corn instead of cassava, its pledge to scrap a costly corn stockpiling policy as part of its grain reforms, new Chinese cassava import regulations that will be more stringent, heightening competition from Vietnam since it has increased shredded cassava productivity and exports. These factors will offer China alternatives to importing shredded cassava from elsewhere and allow latitude in bargaining, so it is expected that our shredded cassava shipments may look grim in 2016 and 2017. Persistently low global oil prices will add pressure to our shredded cassava exports, as well.
Given this, we at KResearch expect that the value of Thai shredded cassava shipments in 2016 will reach some USD1.17 billion, contracting 25.1 percent YoY. The export price will likely be around USD180/ton, declining 15.9 percent YoY on an export volume of perhaps 6.5 million tons, shrinking 10.9 percent YoY.

To compensate for that export shortfall, Thai exporters should send more native cassava starch and modified cassava starch to China because we have the potential to produce a lot and there is still demand for those products in China. We could also make greater inroads into new export markets where there is demand for cassava as a substitute for other produce, e.g., in India, where sago is widely consumed. Last but not least, Thai cassava exporters are advised to maintain their product standards and deliver them promptly to build buyer confidence.

View full article