www.ciat.cgiar.org Science to cultivate change

Cassava production in Vietnam: current status, challenges, and opportunities

Future Prospects for Tapioca Production and Trade in ASEAN

Jonathan NewbyAgricultural economist CIAT-Asia

CURRENT STATUS OF CASSAVA PRODUCTION IN VIETNAM

Official production area stable…

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

Tota

l Are

a in

Asi

a (M

illio

n h

a)

Co

un

try

Are

a (M

illio

n h

a)

Indonesia Viet Nam Cambodia

Thailand Asia

• The agriculture development plan for 2016-2020 aims to maintain cassava areas at 550,000 ha.

National cassava yields

0

5

10

15

20

25

30

35

40

45

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

2010

2013

Yie

ld (

t/h

a)

Asia India Indonesia

Thailand Viet Nam

• Increased production needs to be generated through yield increases

• National yield growth has slowed in recent years

• Extending value chains into neighboring countries

Current status of production in Vietnam

Year Areas

(000 ha)

Yield

(tons/ha)

Production

(000 tons)

2010 498 17.26 8,596

2011 559.8 17.69 9,875

2012 551.9 17.64 9,735

2013 544.1 17.91 9,742

2014

(Pre.)

551.1 18.55 10,225

G. Smith

Variety adoption estimates in Vietnam

Variety/

Release Year

Northern

region

Southern

region

National

KM 94 = KU50 (1995) 80% 37% 60%

KM 140 (2010) 5% 31% 16.3%

KM 98-5 (2010) 0% 9.9% 4.4%

KM 419 (2013) 1.5% 7.4% 4.1%

KM 60 = Rayong 60 0% 6.1% 3.26%

Rayong 72 3% 0% 2.76%

Other improved Varieties

2.5%5.2% 3.98%

Traditional/Local/Landraces

7%3.6% 5.2%

* Currently based on expert consultation not farmer survey

Diverse agro-ecological zones

Processing capacity

• Currently more than 100 cassava starch processing factories throughout Vietnam.

• High competition in roots between factories and alternative value-chains.

• Total design capacity is 2.2 million tons starch/year. • Those factories don’t have sufficient raw materials for

full operation

Size Capacity (t/starch) Number of factories

Large > 50t /day 50

Medium < 50t/day 60

Manual <10t/day 400

MARD

Processing location and scale

Tay Ninh49 Large22 small

Cross border movement of technology, capital, and cassava products

Export value 2004-2013

Source: FAOStats, Comtrade, MARD

300

350

400

450

500

550

600

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Are

a (T

ho

usa

nd

ha)

Exp

ort

Val

ye B

illio

n U

SD)

Cassava (Roots/Chips) Cassava Starch Area

Trade volume and value

0.00.51.01.52.02.53.03.54.04.5

Exp

ort

vo

lum

e (

Mill

ion

to

ns)

Cassava chips Starch and other

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Exp

ort

val

ue

(B

illio

n U

SD)

Cassava chips Starch and other

Source: General Department of Vietnam Customs

Heavily oriented towards Chinese market

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

2009 2010 2011 2012 2013 2014 Jan-May2015**

Exp

ort

Val

ue

(B

illio

n U

SD)

Other

China

Source: Customs

Export destination

Vietnam biofuel mandates

• Decision issued by the Prime Minister of Vietnam in November 2012 stated that all organizations, individuals who produce, mix and trade petrol in Vietnam for use by conventional vehicle engines must use biofuel:

• E5 Gasoline– E5 vehicles in provinces and cities of Hanoi, HCMC, Haiphong, Da

Nang, Can Tho, Quang Ngai and Ba Ria-Vung Tau from1st December 2014.

– From the 1st December 2015 E5 gasoline will be produced and traded over the whole country.

• E10 Gasoline– Vehicles in provinces and cities of Hanoi, HCMC, Haiphong, Da Nang,

Can Tho, Quang Ngai and Ba Ria-Vung Tau since the 1st December 2016.

– From the 1st December 2017 E10 gasoline will be produced and traded over the whole country.

Status of biofuel factoriesNo Factories Capacity/year

(tons/year)

Location Status

1 Dung Quang

bioethanol

79,000 Dung Quat industrial zone Started 2nd quarter 2012.

Limited market – on and off

operation

2 Tung Lam factory 60,000 Xuan Hoa, Xuan Loc, Dong

Nai

On and off operation

3 Dai Tan factory 100,000 Dai Loc, Quang Nam Started in 2010,

stop in 11/2012

Working to start again

4 Binh Phuoc

factory

79,000 Bu Dang, Binh Phuoc Start in 3rd quarter/2012.

Stop

5 Dai Viet factory 55,000 Tam Thang, Cu Jut,

Daknong

Stop in 3/2013

6 Bio-ethanol

Dakto

50,000 Tan Canh, Dakto, Kontum On-and off operation

7 Phu Tho factory 79,000 Tam Nong, Phu Tho Finished key items.

Stopped

Cassava root prices (THB/t)

620

640

660

680

700

720

740

760

780

800

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

ม.ค.-12

เม.ย.-1

2

ก.ค.-12

ต.ค.-12

ม.ค.-13

เม.ย.-1

3

ก.ค.-13

ต.ค.-13

ม.ค.-14

เม.ย.-1

4

ก.ค.-14

ต.ค.-14

ม.ค.-15

เม.ย.-1

5

Do

ng:

Bah

t

Thai

Bah

t/t

Thai Roots (25%) DakLak Roots (30%)

TayNinh Roots (30%) Exchange rate

Source: TTTA, DARD, Industry

Thai and Vietnam price movements

80

90

100

110

120

130

140

ม.ค.-13

มี.ค.-13

พ.ค.-13

ก.ค.-13

ก.ย.-13

พ.ย.-13

ม.ค.-14

มี.ค.-14

พ.ค.-14

ก.ค.-14

ก.ย.-14

พ.ย.-14

Pri

ce In

dex

(Ja

n 1

3 =

10

0)

Thai Roots DakLak Roots TayNinh Roots

Thai Starch DakLak Starch

Declining commodity prices of alternative crops

0

50

100

150

200

250

ม.ค.-10

ก.ย.-10

พ.ค.-11

ม.ค.-12

ก.ย.-12

พ.ค.-13

ม.ค.-14

ก.ย.-14

Pri

ce In

dex

Rubber Vietnam Export

Rubber, SGP/MYS

0

20

40

60

80

100

120

ม.ค.-12

มิ.ย.-12

พ.ย.-12

เม.ย.-1

3

ก.ย.-13

ก.พ.-14

ก.ค.-14

ธ.ค.-1

4

Pri

ce In

dex

Sugar Central Coast & CentralHighland

Sugar (world)

A changing policies environment?

• Limitation on the area, while not binding it has dis-incentivized extension services and constrained yield gains.

• Recent recognition of export value and livelihood impacts is changing government opinions.

• Biofuel mandate timeline

• Changing view of cassava….

– More support from Government?

– Investment in R&D?

CHALLENGES AND OPPORTUNITIESG. Smith

Eco-efficient cassava value chains

Eco-efficiency cassava value chains are:

1. competitive and profitable

2. sustainable and resilient,

3. generating multiple benefits for the poor - equitable

Science to cultivate change

Environmental

ResilientSustainable

Social

FairEquitable

Economic

CompetitiveProfitable

Sustainable cassava production improving livelihoods and economic development

Some ongoing challenges

1. Heavy reliance on single market –vulnerable to changing market and policy conditions

2. Erosion and declining soil fertility in areas where the crop is not managed appropriately;

3. Rising labour costs and limited mechanisation;

4. Emerging pest and diseases throughout Southeast Asia;

5. Historically, limited investment in cassava R&D by private and public institutions relative to other crops

Science to cultivate change

Soil fertility maintenance and nutrientuse efficiency

• Low soil fertility a serious constraint to increasing productivity of cassava production

• Soil erosion is a serious concern of government of Vietnam

• Highly amenable to improvements

– Identify the soil nutrient constraints, improve the efficiency of fertilizer applications, develop site specific recommendations

– Development of eco-efficient soil conservation and intercropping systems

Science to cultivate change

Rising labor costs: occurring across the region

• Increasingly diversified household livelihoods

• Migration to cities

• Competition with other industries

• High opportunity cost of farm-household labor

• Limited mechanization

Invasive pests and disease widen yield gap

Moving towards clean seed systemsSe

ed

-sto

ck

See

d d

istr

ibu

tio

n /

sal

es

Cro

pp

ing

syst

em

Farm

er

Growing clean label market…is there a market for sustainable production….?

Partnerships for a eco-efficient cassava value chain

• Private sector needs to be strongly involved in setting the research agenda with continuing involvement throughout the research and development process– Not only recipients of feedstock from productivity

gains– Agents of change in the dissemination of technology

to overcome the production challenges

• Regional partnerships key to overcoming common issues facing cassava growers and processors throughout SE Asia

Eco-efficient agriculture to improve livelihoods in Asia

Follow us: Website: www.ciat.cgiar.orgBlog: www.ciatnews.cgiar.org/en/

http://twitter.com/ciat_

Insert pic

www.facebook.com/ciat.ecoefficient

Science to cultivate change

www.linkedin.com/company/ciat