Cassava exports drop as price rises

Farmers in the Central Highland city of Kon Tum process cassava for export. High prices caused exports in the first half of the year to drop in volume and value compared to the same period last year. — VNS Photo Le Lam

HCM CITY — Viet Nam exported only 1.2 million tonnes of cassava worth US$300 million in the first six months of the year, down 52.4 per cent in volume and 12.8 per cent in value, compared to the same period last year, according to the Statistics Bureau.

Viet Nam's cassava exports are mostly starch powder and dried slices.

Experts said local traders set prices too high, causing importers to buy from other countries, reported the Thoi Bao Kinh Te Viet Nam (Vietnam Economic Times).

Since the beginning of the year, many traders began buying cassava and storing it, expecting to earn big profits from exports as in previous years.

Caught by surprise

However, they had not researched the market well, and were caught by surprise by the other countries' lower prices.

Traders purchased dried cassava slices from farmers for VND1.3-1.5 million a tonne during last year's harvest season, but paid VND2.5 million a tonne this year.

Because of the increase in price, exporters set prices too high for the global market.

Most cassava importers are from China, which accounts for 90 per cent of Viet Nam's cassava exports.

China is currently buying more cassava from Indonesia and Thailand. In recent years, Viet Nam's cassava has brought high prices since demand for it has risen because it is used for producing ethanol-blended petrol and animal feed.

It is also used in the chemical, pharmaceutical and food processing industries.

Last year in Viet Nam, export revenue of cassava reached $800 million, double the export revenue of pepper.

The country has 508,000 ha of cassava under cultivation, and output is estimated to reach about 8.5 million tonnes this year, according to the Ministry of Agriculture and Rural Development.

Of the output, Vi?t Nam needs to export 4.3 million tonnes of cassava after meeting domestic demand, said the ministry.

By the end of last year, the area under cassava cultivation increased to 560,000ha from 270,000ha in 2006, as the crop helped farmers in disadvantaged areas escape from poverty.

The ministry targets keeping the area under cassava cultivation at 450,000ha, partly because it wants to limit deforestation in the country. — VNS