Vietnam’s cassava price forecast to stay high due to raw material shortage

According to the Vietnam Cassava Association, in February this year, most of cassava processing plants in Vietnam run on a shortage of raw materials though production for the 2020-2021 crop still prolongs a few months.

Traders have forecast the price of cassava will continue to stay high as the supply of cassava starch has decreased sharply. According to a number of factories, cassava price may hit a record high by the end of the 2020-2021 crop and before the next year’s crop.

The volume of cassava chips purchased and stored during the 2020-2021 crop of Vietnam is very low. Meanwhile, the price of tapioca starch and corns increased substantially so many Chinese factories have prioritized the used of crushed cassava chips.

Data of the General Department of Vietnam Customs showed in January 2021, exports of cassava and cassava products reached 472.8 thousand tons, fetching US$ 175.6 million, up 23.7% in volume and up 23.1% in value compared to December. If comparing to January 2020, the figures were up 122.3% in volume and 139% in value.

The average export price of cassava and cassava products was US$ 369/ton, down 0.5% against December 2020 but up 7.5% compared to January 2020.

For cassava products only, the export volume reached 168.86 thousand tons worth US$ 40.9 million in January, up 125.1% in volume and 280.8% in value month-on-month and up 230.2% in volume and 370.5% in value year-on-year

Cassava export price was averaged at US$ 242.2/ton in January, up 69.1% over December 2020 and 42.5% over January 2020.

In January 2021, Vietnam’s cassava and cassava products were mainly shipped to China, accounting for 95.9% of the country's total exports with 453.45 thousand tons worth US$ 166.56 million, up 22.2% in volume and 21.6% in value over December 2020 and up 127.7% in volume and 146.5% in value against January 2020.

Such a high growth rate was attributed to increase in alcohol consumption in China during the Lunar New Year holiday. Besides, the world corn price also increased sharply which has driven China to increase the import of cassava chips to replace corn.

With the recovery of the Chinese pig farming industry after the African swine fever epidemic and given the shrinkage in the corn supply from the United States and South America due to unfavorable weather, Vietnam's cassava export is forecasted to continue rising.