The Market for Cassava in the World Prepared for the XIII Congresso Brasileiro de Mandioca By Truman P. Phillips (dtp Studies Inc.

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1 The Market for Cassava in the World Prepared for the XIII Congresso Brasileiro de Mandioca By Truman P. Phillips (dtp Studies Inc.) July 17, 2009 Introduction World trade for cassava is a harbinger of what the production and processing opportunities are for many cassava producing countries. This paper will examine: world cassava trade; world cassava production and utilization; domestic cassava market opportunities; and emerging international cassava markets. The market for cassava has always been about what can be produced from cassava. Although the origin of cassava and its domestication are still not fully understood, there is a certain degree of consensus as to the fact that all Manihot species originated in the New World tropics and that cassava s dissemination to other continents occurred only after the discovery of the Americas. According to Rogers & Appam (1973), the Portuguese were the first to carry M. esculenta from the eastern coast of Brazil to Africa. After the 16 th century, the species gradually spread through the various regions of sub-saharan Africa. The Inhabitants of the region then took them to Madagascar. From the western coast of Central America, Spanish explorers and traders took them to the Philippines, thence to Southeast Asia. Much later, they were introduced to southern India from the East African coast. After the Dutch had taken M. esculenta to its highest level of cultivation in Indonesia, every Pacific island where agriculture was practiced came to grow some variety of this species. Cassava is grown in south Florida, where it was introduced far before the arrival of the Europeans (EMBRAPA 2005). Cassava proved to be an easily transportable food that was pleasant to eat. Accompanying the trade in cassava products, primarily flour, was the flow of planting material and the means of processing cassava. And so the world market for cassava began. World Cassava Trade The primary traded products up to the 1950 s were cassava flour and cassava starch. The Common Agricultural Policy (CAP) 1 for the European Union (EU) was established in 1963 and created a new marketing opportunity for cassava exports. Initially the CAP introduced price import policies which were designed to stimulate EU grain production and limit imported grains. A consequence of this policy was that the cost of grains used to produce animal feeds was artificially high and adversely affected the competitiveness of the EU s livestock industry which needed cheap compound feeds. To address this latter problem the EU developed a trade policy that allowed for the importation of energy rich and protein rich ingredients with minimal trade barriers. The result was that livestock feed compounders could combine imported energy rich and protein rich sources to produce animal feeds which were cheaper than those that could be produced using EU grains. As a result of this policy dried chopped 1 Following post-war shortages, Europe began to explore ways to become self-sufficient in food and agricultural production at the regional level. The Treaty of Rome set the stage for the CAP by establishing guaranteed markets as well as a fair price for agricultural producers. (Delayen 2007) DTP PAGE -1

cassava roots and soybeans became important imported commodities (Ho Rih Hwa 1988). Chopped cassava roots soon became chips and by the mid to late sixties cassava pellets became the major traded item.

(Appendix A lists the FAO trade codes used to classify cassava trade.

2 cassava roots and soybeans became important imported commodities (Ho Rih Hwa 1988). Chopped cassava roots soon became chips and by the mid to late sixties cassava pellets became the major traded item. Paralleling the growth of the cassava pellet market was the expansion and improvement in the export of cassava starch and tapioca of cassava. (Appendix A lists the FAO trade codes used to classify cassava trade.) As can be seen from Figure 1, Europe accounted for most of the market growth up to 1981 and continued with a steady demand of about 8 million tones up to In 1995 European demand decreased to 2.5 million tones and then in 2005 and 2006 imports dropped further to less than 200 thousand tones. Fortunately for cassava exporters, Asia experienced an increasing demand for cassava products. By 2006 the Asian market almost equaled the market that was lost in Europe. North America and South America also acted as replacement markets for the European losses, but levels are less than ten percent of the Asian contribution. Since 1990 cassava starch and tapioca has taken on new importance in all three growth regions. Figure 1: Major Importers of Cassava Products A closer examination of cassava importers (Tables 1 and 2) reveals the changing patterns of cassava products and who imports cassava. In 1981 only a limited number of countries imported more than one million dollars of cassava products. The importers were primarily European countries with the 2 The trade data is derived from various years of FAOSTAT Trade Data (FAO Various years) DTP PAGE -2

3 Netherlands, Germany and Belgium-Luxembourg each importing more than $148,000,000 of cassava products. Japan, China and Canada were the only non-european countries. Table 1: Major Importers of Cassava Products Region Coountry Cassava Dried Cassava Starch Cassava Tapioca Total $1,000 Europe Netherlands $414,661 $522 $0 $415,183 Europe Germany $228,236 $551 $0 $228,787 Europe Belgium-Luxembourg $147,951 $274 $342 $148,567 Europe France $67,096 $2,066 $0 $69,162 Asia Japan $1 $20,324 $7 $20,332 Asia China $0 $9,087 $8,645 $17,732 Europe Italy $16,490 $20 $0 $16,510 Europe United Kingdom of Great B $11,088 $1,705 $1,198 $13,991 Europe Denmark $10,679 $256 $0 $10,935 Europe Ireland $8,958 $172 $0 $9,130 Northern America Canada $0 $764 $343 $1,107 In 2005, there were 28 importers of cassava and 19 were outside the European Union. China was the major importer with over 600 million dollars of cassava products. In contrast with 1981 when only two countries imported less than five million dollars of cassava products, in 2005 there were 13 countries that imported less than five million dollars of cassava products. Table 2: Major Importers of Cassava Products REGION COUNTRY CASSAVA DRIED CASSAVA STARCH CASSAVA TAPIOCA TOTAL ($1,000) Asia China $421,746 $189,531 $3,031 $614,308 Northern America United States of America $38,340 $7,974 $4,954 $51,268 Asia Korea, Republic of $34,785 $2,970 $0 $37,755 Asia Japan $3,543 $26,424 $2,168 $32,135 Europe Spain $29,012 $0 $0 $29,012 Asia Malaysia $0 $28,733 $0 $28,733 Asia Indonesia $0 $24,410 $0 $24,410 Asia China, Hong Kong SAR $0 $13,786 $2,015 $15,801 Europe Netherlands $10,826 $4,152 $0 $14,978 Asia Singapore $0 $12,287 $0 $12,287 Europe Portugal $10,184 $0 $0 $10,184 Asia Philippines $0 $9,141 $0 $9,141 Europe France $3,937 $2,873 $0 $6,810 Northern America Canada $1,318 $3,667 $1,711 $6,696 Africa South Africa $0 $6,346 $0 $6,346 Asia Bangladesh $0 $2,636 $1,798 $4,434 Europe Germany $0 $3,266 $0 $3,266 Central America Caribbean Aruba $0 $0 $3,171 $3,171 Europe Belgium $2,946 $0 $0 $2,946 Europe Russian Federation $0 $2,392 $0 $2,392 Europe United Kingdom $2,056 $0 $0 $2,056 Oceania Australia $0 $1,498 $0 $1,498 South America Brazil $0 $1,497 $0 $1,497 Europe Sweden $0 $1,381 $0 $1,381 South America Venezuela, Bolivarian Rep $0 $1,279 $0 $1,279 Oceania New Zealand $0 $1,182 $0 $1,182 South America Colombia $0 $1,151 $0 $1,151 Asia Sri Lanka $0 $1,057 $0 $1,057 While the market demand of imported cassava products has changed over the past forty-five years, the countries supplying the market have remained relatively stable. Thailand, Indonesia, Viet Nam and Costa Rica supply 95% of all world cassava imports with Thailand exporting the vast majority (note the vertical axis units in Figure 2). Thailand exports approximately five times the total exports of Indonesia, Viet Nam and Costa Rica combined or 85% of world cassava products exports. Thailand is also the DTP PAGE -3

largest exporter of cassava starch, cassava tapioca, and dried cassava. Costa Rica is unique in that it exports fresh and frozen roots for human consumption.

terms of cassava export potential. The reasons why this is not so are simply: price, quality, and timely delivery.

sufficient quantity to meet demand. Thailand s dominance in the world cassava market stems from these factors.

Its small farmers were already market driven and responded to price incentives that encouraged the increase in cassava production to meet this new market demand.

4 largest exporter of cassava starch, cassava tapioca, and dried cassava. Costa Rica is unique in that it exports fresh and frozen roots for human consumption. Figure 2: Root Equivalent of Cassava Roots Used for Imported Cassava Products Many cassava producing countries would like to be in the same league as Thailand in terms of cassava export potential. The reasons why this is not so are simply: price, quality, and timely delivery. Cassava exports must be competitive with other products that have the same physical properties; and the volume exported must be delivered in a timely manner, and of sufficient quantity to meet demand. Thailand s dominance in the world cassava market stems from these factors. In the fifties and early sixties Thailand was already a major agricultural trading country prior to the emergence of a European cassava market opportunity. Its small farmers were already market driven and responded to price incentives that encouraged the increase in cassava production to meet this new market demand. Thai processors and marketers had experience in amassing large volumes of products from small farmers. The infrastructure in terms of roads and ports needed to export large volumes already existed. Finally cassava was price competitive with competing products and profitable for local farmers. DTP PAGE -4

Thai export prices represent the world standard, except for the export of fresh cassava which is dominated by Costa Rica. The average price history of Thai exports is presented in Figure 3.

5 Thai export prices represent the world standard, except for the export of fresh cassava which is dominated by Costa Rica. The average price history of Thai exports is presented in Figure 3. The prices are calculated as the value of exported cassava products divided by quantity of exported cassava products. The price of cassava roots is estimated as the price of dried cassava products divided by the conversion factor of roots to dried cassava, e.g In the early 1960s, the average price of exported dried cassava products was approximately $39/t with an implicit root price of $15/t. The average price of dried cassava reached a high of $130/t a number of times, 1980, 1987 and 1996, translating to an implicit root price of about $52/t. Between 2000 and 2004 the implicit root price was less than $30/t which resulted in the following cassava product prices: dried cassava $66/t, starch $176/t and tapioca $244/t. It can be seen that Thailand did not begin exporting starch until Figure 3: Calculated Price of Thai Exports For a country to be a successful exporter of cassava products it is assumed that the cost of cassava roots in that country must be to some degree competitive with the price of cassava roots in Thailand. For purposes of analysis it is assumed that $60/t, the highest implicit price of Thai roots, represents the upper limit of competitively priced cassava roots. Table 3: National Prices of Cassava Roots (average ) Prices >$100/mt Prices $60 to $100/mt Prices <$60/mt Burkina Faso Barbados Congo, Republic of Madagascar Burundi Belize Gambia India Cameroon Costa Rica Ghana Laos Côte d'ivoire Dominican Republic Kenya Thailand Equatorial Guinea El Salvador Malawi Viet Nam Guinea Honduras Rwanda Brazil Mali Jamaica Indonesia Mauritius Mexico Philippines Mozambique Panama Nicaragua Niger Puerto Rico Paraguay Nigeria Saint Lucia Peru Sudan Trinidad and Tobago Togo Cook Islands Zimbabwe Argentina Cambodia Bolivia China Colombia Malaysia Ecuador Myanmar Suriname Singapore Venezuela,Bolivar Rep of Sri Lanka DTP PAGE -5

It can be seen from Table 3 that only five other countries can meet that price but only Viet Nam can compete in terms of all that is required to meet timely delivery.

India would appear to have the productive capacity to be competitive internationally, but it has a large vibrant domestic market which is probably more attractive than the international market.

6 It can be seen from Table 3 that only five other countries can meet that price but only Viet Nam can compete in terms of all that is required to meet timely delivery. Madagascar and Laos, although their price is competitive, do not have the production capacity to enter the world market. India would appear to have the productive capacity to be competitive internationally, but it has a large vibrant domestic market which is probably more attractive than the international market. Brazil on the other hand is an important trader of cassava starch (fourth in the world). Until 1995 Brazil has had sporadic years of cassava starch exports (figure 4). Since 1992 there has been an increase in the quantity and value of cassava based exports, even though cassava starch exports utilize only a small portion of Brazil s total cassava production. Figure 4 Brazilian Exports of Cassava Starch (value and volume) Brazil s cassava starch export pattern (Map 1) is interesting. As can be seen The United States is the major importer, exceeding one thousand tones while five countries, Mexico, Paraguay, Belgium, Turkey and Australia import less than 10 tonnes. The most interesting trading partners are the South American countries (Argentina, Chile, Colombia, Peru and Venezuela) who import between 100 to 1000 tonnes of starch. These are of interest because it is one of the few examples of intra-continental trade. It clearly is an opportunity that should be further explored by Brazil. DTP PAGE -6

Map 1 Importers of Brazilian Cassava Starch 1 to 10mt 10-100mt 100-1000mt >1,000mt In summary, world cassava trade has grown

From 1989 to 1995 trade declined and since 1995, exports have stabilized at approximately 7,000 thousand tones valued at

7 Map 1 Importers of Brazilian Cassava Starch 1 to 10mt mt mt >1,000mt In summary, world cassava trade has grown for 28 years from 16 thousand tones in 1961 to over 12 million tones of imports in From 1989 to 1995 trade declined and since 1995, exports have stabilized at approximately 7,000 thousand tones valued at approximately 700 million dollars 3 a year (Figures 5 and 6). Figure 5: Quantity of Cassava Imported Products (t) 3 About 11 million tones of cassava products. DTP PAGE -7

Figure 6: Value of Imported Cassava Products ($1000) Thailand and Indonesia have been competitive and able to fulfill market requirements since the sixties.

competitive or had insufficient processing capacity. Thailand is the world price setter, meaning that to enter into world trade of cassava products a country has to be competitive with Thailand.

8 Figure 6: Value of Imported Cassava Products ($1000) Thailand and Indonesia have been competitive and able to fulfill market requirements since the sixties. Other countries such as, Malaysia, Côte d'ivoire, northeast of Brazil, were encouraged by European importers, primarily Germans, to export cassava to the EU market, but these countries failed to be competitive or had insufficient processing capacity. Thailand is the world price setter, meaning that to enter into world trade of cassava products a country has to be competitive with Thailand. World Production and Utilization World trade, at best, accounts for no more than twenty-five percent of world production in 1989 (Figure 7). Therefore 75% of all cassava production is consumed in the producing countries. This is effectively the world market of cassava. Figure 7: World Production and Root Equivalent of Exports Regionally, the statement that the world market for cassava is the domestic market for cassava is particularly true in Africa and South America (Figure 8). The market for cassava in Asia however is made up of exports and domestic consumption. At times exports exceed domestic consumption while more recently domestic consumption exceeds exports. Central America owing to Costa Rica s export of fresh and frozen roots demonstrates a small and growing export portion of domestic supplies. Africa s growing production trends reflects its continuing population growth and desire for cassava DTP PAGE -8

desire for cassava Figure 8: Regional Production and Root Equivalent Exports

9. In Africa and Asia cassava is primarily used for food and processing.

9 consumption. South America s production illustrates Brazil s strong domestic market and desire for cassava consumption. Figure 8: Regional Production and Root Equivalent Exports How cassava is used in different regions of the world is illustrated in Figure 9. In Africa and Asia cassava is primarily used for food and processing. In Central and South America cassava is also used for feed. In South America feed accounts for almost fifty percent of utilization. DTP PAGE -9

Figure 9 Regional Supply Utilization Accounts As an example it can be seen from Figure 10 that

Perhaps the most interesting feature of this Figure is that since the eighties the utilization of

This stability is unexpected owing to the changes in the food market caused by the increased

On the other hand given the degree of urbanization in Brazil the stable market is very promising in

10 Figure 9 Regional Supply Utilization Accounts As an example it can be seen from Figure 10 that animal feed utilization accounts for a major portion of Brazilian supply. Perhaps the most interesting feature of this Figure is that since the eighties the utilization of cassava in Brazil has remained fairly constant. This stability is unexpected owing to the changes in the food market caused by the increased urbanization, and the known increase in processed cassava commodities like starch. On the other hand given the degree of urbanization in Brazil the stable market is very promising in terms of market concentration (see discussed below) for producers and processors. In other words there will be a relative increase of consumers versus the number of producers and processors. DTP PAGE -10

Figure 10: Supply Utilization Accounts Domestic Market Opportunities As illustrated above, world trade of cassava requires processed cassava.

11 Figure 10: Supply Utilization Accounts Domestic Market Opportunities As illustrated above, world trade of cassava requires processed cassava. Since world trade for cassava is a harbinger of what the production and processing opportunities are for many cassava producing countries, the evolution of world traded cassava products indicates that there should be growing domestic market opportunities within cassava producing countries regardless of whether they actually trade cassava. The following section will identify two such opportunities. Two major domestic marketing opportunities exist within cassava producing countries because of growing market concentration and product competition. Market concentration is defined as market growth with a relatively fixed or diminishing number of producers, i.e., there is a concentration of producers. Market competition is defined as market growth when cassava becomes economically more attractive for a particular use than alternative products. Market Concentration Market concentration results from the rapid urban growth that is occurring in most producing countries. This means that the number of potential cassava consumers is growing more rapidly than the number of cassava producers. Thus if the growing urban population is going to continue consuming cassava, the producers and processors of cassava will have to increase production. The growth of the urban market not only indicates an expanded market for producers and processors, but also suggests the need for new products which may have greater value attributes. The following table present some estimates of the potential impact of concentration owing to urban growth. Clearly the urbanization impact is greatest for African countries while for South American countries the urban market will represent the bulk of the market. DTP PAGE -11

12 Table 4: Potential Increased Cassava Consumption Owing to Urbanization REGION COUNTRY Total 2005 Urban 2015 Total 2015 Percent Increase Percent Urban Consumption Africa Angola 3,857,722 2,227,064 4,881, % 46.00% Africa Benin 1,316, ,843 1,736, % 54.00% Africa Burundi 709, , , % 14.00% Africa Cameroon 1,485,302 1,093,800 1,779, % 61.00% Africa Central African Repub 524, , , % 48.00% Africa Chad 331, , , % 29.00% Africa Comoros 58,254 31,428 74, % 42.00% Africa Côte d'ivoire 1,470, ,540 1,759, % 50.00% Africa Gabon 114, , , % 94.00% Africa Ghana 4,842,747 3,088,986 5,896, % 52.00% Africa Guinea 1,250, ,189 1,519, % 45.00% Africa Guinea-Bissau 39,650 22,918 51, % 45.00% Africa Kenya 411, , , % 56.00% Africa Liberia 476, , , % 54.00% Africa Madagascar 2,158, ,103 2,794, % 28.00% Africa Malawi 1,133, ,967 1,415, % 22.00% Africa Mali 13,518 7,213 17, % 41.00% Africa Mozambique 4,888,624 3,119,439 5,928, % 53.00% Africa Niger 125,613 49, , % 29.00% Africa Nigeria 14,994,420 10,674,349 18,494, % 58.00% Africa Rwanda 1,147, ,692 1,828, % 53.00% Asia China 1,323, ,882 1,414, % 51.00% Asia India 6,620,226 2,362,464 7,666, % 31.00% Asia Indonesia 13,144,079 9,206,814 14,760, % 62.00% Asia Malaysia 354, , , % 74.00% Asia Myanmar 101,038 40, , % 35.00% Asia Philippines 1,578,026 1,335,867 1,875, % 71.00% Central America CaribbeaCosta Rica 8,654 7,044 10, % 67.00% Central America CaribbeaCuba 270, , , % 77.00% Central America CaribbeaDominican Republic 106,740 77, , % 64.00% Central America CaribbeaEl Salvador 13,762 10,762 16, % 66.00% Central America CaribbeaGuatemala 12,599 7,955 15, % 51.00% Central America CaribbeaHaiti 238, , , % 45.00% Central America CaribbeaJamaica 5,302 2,942 5, % 52.00% Central America CaribbeaNicaragua 38,409 28,389 46, % 62.00% Central America CaribbeaPanama 22,624 16,213 26, % 60.00% South America Argentina 38,747 39,409 42, % 93.00% South America Bolivia 183, , , % 69.00% South America Brazil 7,642,605 7,868,096 8,696, % 90.00% South America Colombia 1,550,400 1,485,036 1,800, % 82.00% South America Ecuador 105,824 81, , % 68.00% South America Guyana 16,522 7,178 16, % 42.00% South America Paraguay 775, , , % 65.00% South America Peru 699, , , % 78.00% DTP PAGE -12

Map 2 Market Growth Potential Owing to Urbanization 0-10% 11-15% 15-25% >26% African countries which have relatively low levels of urbanization can expect that concentration growth opportunities will

13 Map 2 Market Growth Potential Owing to Urbanization 0-10% 11-15% 15-25% >26% African countries which have relatively low levels of urbanization can expect that concentration growth opportunities will exist for a relatively long time. For countries with high levels of urbanization, such as Brazil with ninety percent urbanization, concentration growth will exist for a shorter period of time. Even so, these countries should continue to have a large domestic urban market. Market Competition Additional domestic markets can arise as cassava is processed into products that can reduce or replace imported products. Table 5 illustrates the potential growth of national cassava markets if cassava products can replace 10% of wheat flour and maize imports. These two commodities are selected because they are commonly imported commodities which can be replaced with cassava products. It can be seen that for most countries, competition at the 10% level does not represent a challenge in terms of the amount of extra production needed to satisfy the expanded market. In fact from the production, and perhaps processing, perspective a relatively larger proportion of some imported commodities could be replaced. These replacements must be considered with the caveat that there is sufficient infrastructure and processing capacity. The benefits of competition are twofold. First there is the increased market for cassava products (Table 5). In the case of Angola the replacement market would create a demand for and additional 161 thousand tones of cassava to replace maize and 23 thousand tones to replace wheat flour. This expanded market would require only 2 percent increase in production and processing. For Brazil the replacement market would create a demand for an additional 40 thousand tones of cassava to replace maize and 196 thousand tones to replace wheat flour. This expanded market would require only 1 percent increase in production and processing. Ten percent replacement of maize and wheat flour imports is probably impractical for countries like Cuba which would require a 60 percent increase in production and processing. DTP PAGE -13

14 COUNTRY Table 5: Potential Market Increase with 10% replacement of Maize and Wheat flour Imports Cassava Production % Wheat Flour Replacement 10% Maize Replacement Additional Production required for Replacement Cassava Equivalent (t) Cuba 450,000 88, ,619 60% Costa Rica 300,000 8, ,514 55% Zimbabwe 206,911 5,920 89,712 46% Peru 945, ,220 43% Mali 56,000 21,132 2,116 42% Colombia 2,000, ,661 40% Senegal 120,841 9,511 26,980 30% Sri Lanka 226,080 25,780 40,100 29% Niger 127,419 14,577 15,994 24% Nicaragua 105,000 10,197 10,719 20% Bolivia 373,612 60, % Venezuela 489,047 2,278 76,328 16% Kenya 841,196 2,187 50,287 6% Haiti 326,821 18, % Philippines 1,756,860 23,550 35,128 3% Rwanda 588,174 12,061 6,515 3% Burundi 710,000 1,083 20,122 3% Indonesia 19,927, , ,692 3% Guinea 1,068,518 26, % Congo 1,000,000 22, % Angola 8,810, ,993 23,508 2% Zambia 950, ,505 2% Viet Nam 7,714,000 20, ,607 2% Côte d'ivoire 2,200,000 27,767 4,297 1% Malawi 2,075,000 4,532 23,272 1% Madagascar 2,358,775 22,313 1,478 1% Tanzania 6,500,000 2,133 57,448 1% Brazil 26,713,038 39, ,241 1% Mozambique 11,458,000 1,803 49,414 0% Uganda 4,926,000 1,395 19,365 0% Congo, DR 14,974,470 57,191 5,065 0% Thailand 22,584,402 46,704 33,492 0% Ghana 9,638,000 4,552 21,351 0% Paraguay 4,800, ,997 0% Author s calculations The second benefit from replacing imports is the foreign exchange savings (Table 6). For example the foreign exchange savings for Angola would be more than 9 million dollars on reduced maize imports and almost 1 million dollars on reduced wheat imports. Similarly the Brazilian import savings could be more than 2 million dollars from reduced maize imports, and more than 6 million dollars from reduced wheat flour imports. At the high end, the potential foreign exchange saving for Colombia could be over 37 million dollars. DTP PAGE -14

15 Table 6: Potential Foreign Exchange Savings from 10% replacement of Maize and Wheat flour Imports COUNTRY Value of Wheat Replacement Value of Maize replacement Total Value of Replacement ($1,000) Colombia $39 $37,426 $37,466 Indonesia $11,692 $16,201 $27,893 Zimbabwe $767 $25,675 $26,442 Peru $33 $18,371 $18,404 Cuba $4,947 $7,961 $12,907 Angola $9,208 $980 $10,188 Costa Rica $625 $8,808 $9,433 Brazil $2,129 $6,001 $8,130 Viet Nam $910 $4,897 $5,806 Venezuela $227 $5,401 $5,628 Congo, DR $4,085 $309 $4,394 Kenya $132 $4,178 $4,310 Tanzania $74 $3,735 $3,809 Thailand $2,542 $1,240 $3,782 Philippines $1,385 $2,381 $3,766 Sri Lanka $1,104 $2,228 $3,332 Bolivia $2,492 $297 $2,789 Mozambique $89 $2,521 $2,610 Senegal $752 $1,546 $2,298 Côte d'ivoire $1,868 $333 $2,200 Ghana $342 $1,580 $1,921 Zambia $60 $1,813 $1,873 Uganda $96 $1,698 $1,795 Malawi $267 $1,503 $1,771 Niger $1,003 $744 $1,748 Mali $1,504 $122 $1,626 Guinea $1,604 $15 $1,619 Burundi $81 $1,287 $1,367 Congo $1,299 $31 $1,329 Haiti $1,274 $45 $1,319 Madagascar $1,083 $155 $1,238 Paraguay $14 $1,118 $1,132 Rwanda $764 $334 $1,098 Nicaragua $594 $501 $1,095 Author s calculations Examination of domestic market growth potential for Brazil illustrates that, based on 2006 cassava production levels, 5% growth in cassava production could be achieved from urbanization and the replacement of 10% of maize and wheat imports to Brazil. Emerging International Markets Other than these two domestic growth opportunities, where are the future market growth opportunities for traded cassava? One simply answer is China. DTP PAGE -15

16 As illustrated earlier, by 2005 China became the dominate importer of cassava accounting for sixty-six percent of the value of all imported cassava. The Chinese demand for cassava products is primarily driven by their growing fuel ethanol program, and their rapidly growing food, pharmaceutical and manufacturing sectors (China Tapioca Market Research 2006). China is and will continue to be the world s largest importer of cassava in the immediate future. China s ethanol production from sugarcane, cassava and sweet sorghum is predicted to be 5 million tons in The demand for cassava for food, feed and ethanol is predicted to be between 32 and 34 million tons. China s domestic cassava production is estimated at 10 to 11 million tons. The resulting gap between China s cassava demand and supply will likely be between 21 and 23 million tons. China is not the only Asian country making plans for cassava based ethanol plants. Table 7 illustrates plans for cassava based ethanol plants in Indonesia, Thailand and Viet Nam as well as China. The resulting roots needed to supply these plants exceed 36 million tones annually. Which if it happens represents roughly 18% of current world cassava production. Table 7 Actual and Planned Cassava Based Ethanol Plants as of March 2008 Country Company Location Capacity ('000 l/day) Status Roots ('000 t/year) China Guangxi New Tianda Energy Ltd. Co. Qainzhou, Guangxi 420 operating 787 China Food Comp Beihai, Guangxi 840 completed in ,575 China Food Comp Wuzhou, Guangxi 1,260 2,362 Other factories 1,510 planned 2,832 TOTAL 4,030 7,556 Indonesia Sampoerna Bio-energy : 3 factories East Java 2,500 planned 4,688 Sorini Corporation SE Sulawesi 2,500 planned 4,688 EN3 Co. Ltd. 3 factories S Sulawesi 600 1,125 TOTAL 5,600 10,501 Thailand Thai Nguan Ethanol Co. Ltd. Khon Kaen 130 stopped operating International Gasohol Corp. Rayong 150 completed, not operating Phakwantip Co. Ltd. Prachinburi 60 completed, not operating 6 factories using cassava /or malasses 1,000 to be completed in , factories 7,170 licensed 13,433 TOTAL 8,510 15,945 Viet Nam Perosetco + Itochu Co. HCM city 333 to be completed 2009 (Howeler 2008) Petrosetco Binh Dinh 375 planned 703 Petrosetco Baria Vungtau 375 planned 703 Hai Phong Engine Comp. Gia Lai 400 planned 750 TOTAL 1,483 2,780 Total for all 4 countries 19,623 36, DTP PAGE -16

17 However with regards to ethanol exports, Brazil is the world s leading exporter, all of which is produced from sugarcane. Brazil does has an opportunity to use cassava in ethanol production. If cassava were used in just 10% of current ethanol export production, cassava production would grow by 8%, based on 2006 cassava production levels. Conclusion The conclusion to be drawn from the preceding discussion is that there will continue to be growing domestic and international market opportunities for cassava. Being a player in the international market has and is the dream of many cassava producing countries, but it has to be realized that the market is very competitive in terms price and volume. It should be realized that the international market and domestic market are not separate entities. For example in the case of Brazil the potential foreign exchange savings from replacing maize and wheat flour imports are of the same magnitude as the value of cassava exports. Both activities earn foreign exchange. The following table contains a summary international and domestic market opportunities for 2010 and beyond. It would appear that the affects of concentration and competition could require an additional 95 million tones of cassava. China by itself could require an additional 23 million tones of imported cassava. While Thailand will continue to be the dominant exporter it is possible that a number of other countries can take advantage of the expanded export market opportunities. Finally, the market for both international and domestic markets will continually evolve and provide opportunities for those countries that can respond. Table 8 Predictions of cassava growth 2010 and beyond Markets Domestic markets in cassava producing countries will continue to grow China will be the main importer Thailand will continue to be the major exporter Other exporters will see their trade opportunities expand Volume > 95 million tones >23 million tones >20 million tones Of course while these predictions seem promising a number of conditions must also be met. One, the additional supply required to meet this demand may require substantial political support and innovations in production and processing techniques. Two, these new innovations may face closer scrutiny in terms of resource utilization and environmental impact. Three, society may require economic and social accountability regarding who benefits from the growing market. Four, failure to comply with resource and environmental concerns may stymie expanded cassava production. In summary, there are great market opportunities for cassava both now and in the future. In most cases, these opportunities exist in the cassava producing country themselves and are larger than international trade markets. These domestic opportunities are beneficial to the primary stakeholders in the cassava supply chain and the broader society because they have a long duration. They are not trendy. In contrast, export markets for those who can be competitive can be rewarding but they can be risky. Not many countries appear to be price competitive with Thailand. For the most part, the largest market for cassava products continues to exist in cassava producing countries themselves. DTP PAGE -17

18 References "China Tapioca Market Research." Web page. Available at %20Research-Final.pdf The Common Agricultural Policy: A Brief Introduction, Céline Delayen. Institute for Agriculture and Trade Policy, Minneapolis, Minnesota. 3. EMBRAPA Cassava the Bread of Brazil. Brasilia, Brazil: EMBRAPS. 4. FAO. "FAOSTAT Statistical Databases 2008." Web page, [accessed August 2008]. Available at 5. FAO. Various years. FAO Trade Statistics. Rome, Italy: FAO. 6. Ho Rih Hwa Eating Salt: An Autobiography. Singapore: Times Books International. 7. Howeler, Reinhardt Cassava in Asia: A Potential new Green Revolution in the making. DTP PAGE -18

19 Appendix A Table 9: FAO Cassava Trade Categories and Trade Codes FAO Code FAO Description SITC Rev. 3 Code SITC Description 128 Cassava Dried Manioc (cassava) fresh or dried, whether or not sliced or in the form of pellets 129 Cassava Starch Manioc (cassava) starch 127 Tapioca of Cassava ex Tapioca and substitutes therefore prepared from starch, in the form of flakes, grains, pearls, siftings or in similar forms Source: (FAO 2008), DTP PAGE -19

UNIVERSITY OF KANSAS Office of Institutional Research and Planning

UNIVERSITY OF KANSAS Office of Institutional Research and Planning 10/13 TABLE 4-170 FALL - TOTAL 1,624 1,740 1,926 2,135 2,134 2,138 2,246 Male 927 968 1,076 1,191 1,188 1,179 1,262 Female 697 772 850 944 946 959 984 Undergraduate 685 791 974 1,181 1,189 1,217 1,281