"Future growth of Asia’s starch markets & competitiveness of raw materials – corn vs cassava"
"New policies and government support drives starch industry growth"
Scenario 1 – China’s corn policy movements and its impact on the cassava starch industry
Price supports and preferential tariff arrangements influences the development of the cassava and the starch industry. Global market for cassava remains highly oriented towards Asia, with East Asia (particularly China) having enormous influence on the market.
For Starch - Thailand exports around 45% of its cassava starch to China. while Vietnam’s starch exports of USD 928 million are also predominantly destined for the Chinese market.
Beyond starch, cassava chips are used in the livestock feed industry and as a feedstock into the ethanol industry.
Currently, the corn supply glut in China has spurred the government to initiate various policy moves and subsidies to support their farmers. As a result the cassava industry has started to feel the impact
Cassava exports fall with China demand
- Vietnam News: September, 09/2016
Scenario 2 – Vietnam & European Union signs trade agreement for 30,000 tonnes duty free quota of Vietnamese native tapioca starch
The free trade agreement allowing 30,000 tonnes of duty free quota for Vietnamese native tapioca starch will chip at approximately 8% of the EU pototo starch market.
In Asia and increasingly round the world, cassava starch has become the starch of choice for many food and non-food applications due to its superior functional properties.
What are the new developments in other sources of starch that cannot be replaced by cassava ?
Scenario 3 - Vietnam's Ministry of Agriculture and Rural Development's new policy agenda targets cassava and its value chain industry,
The export value of cassava for Vietnam is about US$1.3-1.5 billion annually, making it the country’s third largest export crop, after rice and coffee.
This burgeoning market represents a huge opportunity for smallholder farmers to earn more from a crop that requires little investment and can grow in very poor soil
Working with CIAT, scientists have discovered recent new high-yield breeding varieties and productivity of cassava has more than doubled.
Results of cassava trials and demonstrations conducted in some provinces have indicated that farmers have successfully improved their practices, and that new technology has boosted cassava yields. Trials show yield increases from 8.5 tonnes per ha to 36 tonnes per ha in some areas – four times more.
Scenario 4 - Competition to supply from South America
International trade of cassava from South America has been constrained by high competition from Asia, where production and processing costs are lower. However, prospects for developing the industry looks good with interesting developments in harvesting equipments and waxy starch cassava varieties.
Aptly placed in Vietnam, CMT’s 6th Starch World ASIA will gather fresh new authoritative speakers that will share their challenges and concerns on ASIA’s starch market.
Growing demand sparks cassava boom in VN
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Vietnam’s cassava production surges, but exports volume came down in 2016
Posted on : 03 Jan, 2017
Vietnam is fast emerging as a key cassava producer and exporter. Vietnam exports USD 928 million worth of cassava – a large part of it goes to starch processors in China. Cassava is Vietnam's third largest export crop, after rice and coffee.
Not only Vietnam has doubled its cassava plantation area in recent years, it has also doubled its yield from 6 to 8 tonnes per ha to 19 tonnes per ha in 2015. This is largely due to the introduction of new high-yield breeding lines through collaboration with the International Centre for Tropical Agriculture (CIAT) and national partners in Vietnam and Thailand as well as scientists.
Vietnam also has a huge potential to boost cassava yield as recent trials indicate increases from 8.5 tonnes per ha to 36 tonnes per ha in some areas. With cassava as a cash crop is high on Vietnam's Ministry of Agriculture and Rural Development's agenda, the production is further expected to get a boost. This year, Vietnam also earned a 30,000 tonnes duty free quota for its native tapioca starch via trade agreement with the EU.
Cassava can be grown on small plots of land, it doesn’t require much care and it can grow in marginal upland conditions and tolerates stress, drought, heat and poor soil. Moreover, farmers also have the flexibility of growing cassava alongside other crops to spread their risk.
However, the decrease in demand from China has affected cassava exports from Vietnam in 2016. According to the Ministry of Agriculture and Rural Development (MARD), exports of cassava and cassava-based products have declined significantly in 2016 – with the export figure standing at 2.6 million tonnes worth US$700 million - down 14.5 percent year-on-year in volume and 22.5 percent in value. China accounted for nearly 86 per cent of the exports, but it was down to 32 per cent in value year-on-year as per the General Department of Việt Nam Customs data.
Vietnam’s cassava shipments to South Korea, Japan and the Philippines were also down with only Malaysia buying 15.1 per cent more of its cassava.
More about Vietnam cassava production and exports at 6th Starch World Asia on 16-17 January, 2017 in Ho Chi Minh.
Find out more about the conference from Ms. Huiyan at firstname.lastname@example.org or call +65 6346 9113.
Rice Starch Products to get a boost with Ingredion’s Thai Acquisition
Posted on : 05 Dec, 2016
Global ingredients provider– Ingredion is all set to acquire Thailand based Sun Flour Industry’s rice starch and rice flour business.
Starch production is one of Ingredion’s main business and the acquisition of this company in Thailand’s Banglen is expected to help Ingredion expand its higher-value specialty ingredients business.
Rice is a key ingredient and an ‘on trend’ product in the market now, given it qualities of gluten free, non-GMO and hypoallergenic. Being of superior functionality, rice is suitable for a vast array of products such as baby foods, dairy products, snacks and gluten-free bakery.
The acquisition is expected to leverage on Sun Flour Industries’ dominance in the Thai agricultural industry while Ingredion’s global presence to expand the rice business.
The acquisition awaits mandatory approval from Thai government authorities as well as to other customary closing conditions.
Thailand is the largest producer of corn for the starch industry. Rice is also a major cash crop for Thailand. The new acquisition opens new opportunities for the rice starch industry.
More about rice starch and starch markets in Asia will be discussed at 6th Starch World Asia on 16-17 January, 2017 in Ho Chi Minh.
Find out more from Ms. Huiyan at email@example.com or call +65 6346 9113.
Chinese Corn Processors may get Subsidies from government
Posted on : 04 Nov, 2016
China – the world’s second-biggest corn producer and consumer – has been facing a domestic glut for some time now. The country started to ease the glut with state stockpiling program. With domestic oversupply, the corn futures in China are at a decade low now and it has also brought down the starch prices. After ending its stockpiling program, China is selling the grain from reserves and reducing planting to curb the glut.
China’s corn processing industry is also in losses owing to a low demand from end users in the textile and paper industry. Analysts say the government is considering extending subsidies to the corn processing industry to boost demand before the harvesting season. The move is likely to help raise production capacity and enable farmers to sell grains. Market analysts say that subsidies of about 300 yuan ($45) to 400 yuan a ton may be offered to corn processors in Heilongjiang and Jilin provinces.
Jilin’s local government already offered a subsidy of 150 yuan a ton in the first half this year. Meanwhile in July, the finance ministry offered to allocate 30 billion yuan in subsidies to corn growers in four provinces.
According to the China National Grain and Oils Information Center, China’s corn production may total 219.5 million tons that will add to stockpiles that Shanghai JC Intelligence Co. estimates to exceed 250 million tons. The corn processing industry is expected to consume only about 60.7 million tons of corn in 2016-17, up from 56.4 million tons a year earlier.
What does the demand glut in China mean for producers in Vietnam, Thailand? Will China’s Starch industry revive?
More about China’s corn production and demand supply will be discussed at 6th Starch World Asia on 16-17 January, 2017 in Ho Chi Minh.
Find out more from Ms. Huiyan at firstname.lastname@example.org or call +65 6346 9113.