Global cassava market update July 2019cassavavaluechains.net/wp...update-Nth-Sumatra.pdfGlobal...
29
Global cassava market update July 2019 Jonathan Newby and Cu Thi Le Thuy ACIAR Cassava Value Chain and Livelihood Program Research Symposium, North Sumatra, July 2019 [email protected]
Transcript of Global cassava market update July 2019cassavavaluechains.net/wp...update-Nth-Sumatra.pdfGlobal...
Global cassava market updateJuly 2019
Jonathan Newby and Cu Thi Le Thuy
ACIAR Cassava Value Chain and Livelihood ProgramResearch Symposium, North Sumatra, July 2019
Framework on the project
1. Global markets and external polices
2. Local value chains and domestic policies
3. Household livelihoods and trajectories
4. Field level agronomic and economic results
5. Implications for household livelihoods
6. Implications for local value chain actors
Global markets and policies
Local value chains and policies
Household livelihoods and trajectories
Agronomic & economicsPlot level
On the demand side – the market outlook for cassava in Asia needs to be considered in the context of substitutes in different applications
1. Global markets where cassava chips compete with other forms of carbohydrate for processing animal feed or ethanol such as maize, sorghum, wheat, molasses – oil, gas.
2. Markets where cassava starch competes largely on price with substitutes such as maize and potato starch, sugarcane.
3. Markets where the functional properties of the starch are desired. Consumer preferences, clean label segment, gluten free etc.
And on the supply side – the relative competitiveness against other land use in the context of different trends and shocks
• Own price and relative prices to other commodities that can be produced in agro-ecological zones
• Changes in costs of production• Changing labour costs and ease of mechanization
• Long term climate trends• Floods and droughts• Changes in land suitability and land
degradation• IMPACT OF PEST AND DISEASE
0
20
40
60
80
100
120
140
160
Jan-
15
May
-15
Sep-
15
Jan-
16
May
-16
Sep-
16
Jan-
17
May
-17
Sep-
17
Jan-
18
May
-18
Sep-
18
Jan-
19
May
-19
INDE
X (JA
N15
=100
)Maize Sugar, world Thai Roots
0
20
40
60
80
100
120
140
160
180
Jan-
15
May
-15
Sep-
15
Jan-
16
May
-16
Sep-
16
Jan-
17
May
-17
Sep-
17
Jan-
18
May
-18
Sep-
18
Jan-
19
May
-19
INDE
X (JA
N15
=100
)
Palm oil Coffee, arabica
Coffee, robusta Rubber, SGP/MYS
Thai Roots
The competition for land: change in relative prices of field and tree crops
Area (ha) Production (t) Yield (t/ha)Country 2016 2017 2018 2016 2017 2018 2016 2017 2018
Thailand1,427,168 1,284,021
1,344,79230,557,857 27,875,464
29,974,636* 21.4 21.7 22.3
Indonesia 822,744 772,975 792,95220,260,675 19,053,748 19,341,233 24.6 24.6 24.4
Vietnam 569,233 532,501 10,909,800 10,267,568 19.2 19.3
Cambodia 684,070 613,912 652,235 14,820,249 13,817,261 13,750,076 21.7 22.5 21.1
Laos 75,810 70,930 2,410,000 2,277,050 31.8 32.1
Myanmar 36,625 34,718 433,378 405,404 11.83 11.68
Philippines 229,769 234,540 2,755,146 2,806,668 12.0 12.0
Total 3,845,419 3,543,597 2,789,979 82,147,105 76,503,163 63,065,945 21.4 21.6
Change in production and productivity at National level
Statistic too late for analysis in most countries
*Revised down 8%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Thai
Impo
rt v
olum
ne fr
om C
ambo
dia
(Ton
s)
2010 2011 2012 2013 2014
2015 2016 2017 2018 2019
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Thai
Impo
rt v
olum
ne fr
om La
o PD
R (T
ons)
2010 2011 2012 2013 2014
2015 2016 2017 2018 2019
Thai imports of chips and fresh roots from Cambodia and Lao PDR
2017= $282m
2018 = 201m
2019* = $116m
2017 = $83m
2018= $68m
2019* = $54m
Current official reported status of CMD in mainland SE Asia
Vietnam: 15 Provinces infectedCurrent area 40,775 ha infected
Cambodia: 10 Provinces declaredadditional provinces with reportedsymptoms
Thailand: 7 Provinces have had symptoms reported
Laos: No symptoms reported – planting material coming from Vietnam and Thailand
Myanmar: No symptoms report – planting material coming from outside
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Valu
e of
cas
sava
exp
orts
(bill
ion
usd)
Value of cassava exports (2009-2017)
Total (USD) China
Importance of Chinese market outlook
Smallholders cassava farmers part of a larger global carbohydrate market
Large stockpile remains:Allowed to be used for biofuel
Reduction in price support Removal
of scheme
0
500
1,000
1,500
2,000
2,500
3,000
-200
-100
0
100
200
300
400
500Ju
l-12
Oct
-12
Jan-
13Ap
r-13
Jul-1
3O
ct-1
3Ja
n-14
Apr-
14Ju
l-14
Oct
-14
Jan-
15Ap
r-15
Jul-1
5O
ct-1
5Ja
n-16
Apr-
16Ju
l-16
Oct
-16
Jan-
17Ap
r-17
Jul-1
7O
ct-1
7Ja
n-18
Apr-
18Ju
l-18
Oct
-18
Jan-
19Ap
r-19
Chin
ese
Mai
ze F
utur
e (R
MB)
USD
per
MT
Difference US Gulf Maize CNF China + VAT
Chinese Futures (DCE) US Gulf Maize (FOB)
Chinese RMB
Fall armyworm to impact maize supply in the region
African Swine Fever to moderate demand in the short-term: substitution to other animal protein - poultry
0
50
100
150
200
250
300
350
0
2
4
6
8
10
12
14
Jan-
98
Apr-
99
Jul-0
0
Oct
-01
Jan-
03
Apr-
04
Jul-0
5
Oct
-06
Jan-
08
Apr-
09
Jul-1
0
Oct
-11
Jan-
13
Apr-
14
Jul-1
5
Oct
-16
Jan-
18
Apr-
19
US
Mai
ze (U
SD/t
)
Thai
Pric
e (B
aht/
kg)
Thai Corn 80%Cassava+20%Soymeal Maize (FOB Gulf)
Animal feed prices in Thailand and distribution of ASF
6
8
10
12
14
16
18
20
22
150
200
250
300
350
400
450
500
550
600
650
Jan-
06Ju
l-06
Jan-
07Ju
l-07
Jan-
08Ju
l-08
Jan-
09Ju
l-09
Jan-
10Ju
l-10
Jan-
11Ju
l-11
Jan-
12Ju
l-12
Jan-
13Ju
l-13
Jan-
14Ju
l-14
Jan-
15Ju
l-15
Jan-
16Ju
l-16
Jan-
17Ju
l-17
Jan-
18Ju
l-18
Jan-
19
Dom
estic
Pric
e (B
aht/
kg)
Expo
rt P
rice
(FO
B U
S/M
T)
Export Price (FOB US/MT) Domestic price (Baht/kg)
150
170
190
210
230
250
270
290
310
300
350
400
450
500
550
600
650
Jan-
10
Aug-
10
Mar
-11
Oct
-11
May
-12
Dec-
12
Jul-1
3
Feb-
14
Sep-
14
Apr-
15
Nov
-15
Jun-
16
Jan-
17
Aug-
17
Mar
-18
Oct
-18
May
-19
Cass
ava
Chip
s -FO
B Ba
ngko
k (U
SD/t
)
Star
ch-F
OB
Bang
kok
(USD
/t)
Tapioca Starch (Super High-Grade) Export Price (USD/T)
Tapioca Chips Export Price (USD/T)
Thai reference price declines in past 6 months as local supply recovers and demand for chips declines
Thai Starch price Thai Starch and Chip price
-60
-40
-20
0
20
40
60
250
300
350
400
450
500
550
600
Jan-
16
Mar
-16
May
-16
Jul-1
6
Sep-
16
Nov
-16
Jan-
17
Mar
-17
May
-17
Jul-1
7
Sep-
17
Nov
-17
Jan-
18
Mar
-18
May
-18
Jul-1
8
Sep-
18
Nov
-18
Jan-
19
Mar
-19
May
-19
Bang
kok-
HCM
C (U
SD/t
)
Star
ch p
rice
(USD
/t)
Difference FOB HCMC High FOB HCMC Low
DAF China High DAF China Low Bangkok-HCMC
-80
-60
-40
-20
0
20
40
60
80
100
200
250
300
350
400
450
500
550
600
650
Oct
-09
Mar
-10
Aug-
10
Jan-
11
Jun-
11
Nov
-11
Apr-
12
Sep-
12
Feb-
13
Jul-1
3
Dec-
13
May
-14
Oct
-14
Mar
-15
Aug-
15
Jan-
16
Jun-
16
Nov
-16
Apr-
17
Sep-
17
Feb-
18
Jul-1
8
Dec-
18
May
-19
Diffe
renc
e (T
hai -
Dom
estic
@ F
acto
ry g
ate)
Star
ch P
rice
(USD
/t)
Difference Thai Starch (FOB Bangkok) Indonesia Starch (East Java) Thai + Freight
Relative starch price in Vietnam and Indonesia against Thai Benchmark
Vietnam Indonesia
Thai Cheaper Thai Cheaper
-200
-100
0
100
200
300
400
500
600
700O
ct-0
9Ap
r-10
Oct
-10
Apr-
11O
ct-1
1Ap
r-12
Oct
-12
Apr-
13O
ct-1
3Ap
r-14
Oct
-14
Apr-
15O
ct-1
5Ap
r-16
Oct
-16
Apr-
17O
ct-1
7Ap
r-18
Oct
-18
Apr-
19
USD
/MT
Difference
Tapioca starch (Super High-Grade) FOB Bangkok
Corn starch, Midwest
Thai Cassava Starch versus US maize starch and Indonesian Imports
0
50
100
150
200
250
300
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Thai
land
cas
sava
star
ch e
xpor
ts to
Indo
nesia
(M
illio
n U
SD)
2010 2011 2012 2013 2014
2015 2016 2017 2018 2019
2012
Indonesia increase import of corn starch and syrups
0
200
400
600
800
1,000
1,200
1,400
1,600
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Thai
Sta
rch
expo
rt v
alue
(Mill
ion
USD
)
2010
2011
2012
2014
2015
2016
2017
2018
2019
-
100
200
300
400
500
600
700
800
900
1,000
Valu
e of
star
ch e
xpot
s (M
illio
n U
SD)
2010
2011
2012
2014
2015
2016
2017
2018
2019
Cassava starch exports continue to expand in value in short-term
2019 - Thai starch exports to date at highest value in history Vietnam starch exports remain strong
2015
1000
1500
2000
2500
3000
3500
4000
4500
5000
Jan-
17
Mar
-17
May
-17
Jul-1
7
Sep-
17
Nov
-17
Jan-
18
Mar
-18
May
-18
Jul-1
8
Sep-
18
Nov
-18
Jan-
19
Mar
-19
May
-19
Fres
h ro
ot p
rice
(THB
/t)
ThaiBahit30 Sonla DakLak TayNinh Thai
-60
-40
-20
0
20
40
60
250
300
350
400
450
500
550
600
Jan-
16
Apr-
16
Jul-1
6
Oct
-16
Jan-
17
Apr-
17
Jul-1
7
Oct
-17
Jan-
18
Apr-
18
Jul-1
8
Oct
-18
Jan-
19
Apr-
19
BAN
GKO
K-HC
MC
(USD
/T)
STAR
CH P
RICE
(USD
/T)
Difference FOB HCMC High FOB HCMC Low Bangkok-HCMC
The Vietnam challenge – competition for fresh roots
0
50
100
150
200
250
300
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Viet
nam
impo
rts f
rom
Cam
bodi
a (M
illio
n U
SD)
2010 2011 2012 2013 2014
2015 2016 2017 2018 2019
Early harvest in 2018 of Cambodian roots for Vietnam market
• Extensive margin for roots extend into Cambodian hinterland.
• Cut into chip supply
• Impact viability of new factories in Cambodia
2017
2018
-100
0
100
200
300
400
500
600Ju
l-12
Nov
-12
Mar
-13
Jul-1
3N
ov-1
3M
ar-1
4Ju
l-14
Nov
-14
Mar
-15
Jul-1
5N
ov-1
5M
ar-1
6Ju
l-16
Nov
-16
Mar
-17
Jul-1
7N
ov-1
7M
ar-1
8Ju
l-18
Nov
-18
Mar
-19
Star
ch p
rice
(USD
/t)
Difference Wholesale Ayeyarwady (USD/t) FOB Bangkok (USD/t)
Myanmar starch price relative to Bangkok FOB
Month 2015 2016 2017 2018 2019
Dec 140 170 140 230
Jan 100 130 160 140/120 220/200
Feb 90 150 150 120 200
March 95 170 140 110 200
April 200
Fresh root price (kyat/vis)
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Thai
chi
p ex
port
val
ue (M
illio
n U
SD)
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
20192019
-
100
200
300
400
500
600
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Valu
e of
chi
p ex
port
s (m
illio
n U
SD)
2010
2011
2012
2015
2016
2017
2018
2019
2019
Significant decline in chip exports – changing structure of the market
Thailand chip exports – lowest in 10 years Vietnam chip exports
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8O
ct-0
9M
ay-1
0De
c-10
Jul-1
1Fe
b-12
Sep-
12Ap
r-13
Nov
-13
Jun-
14Ja
n-15
Aug-
15M
ar-1
6O
ct-1
6M
ay-1
7De
c-17
Jul-1
8Fe
b-19
USD
/Litr
e
Root cost in Ethanol (Thai) CBOT Ethanol (USD/litre)
Cassava based ethanol production remains challenged by relatively expensive feedstock
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
Molasses Dried Chips Fresh root Future CBOT
Feed stock Other costs
Daklak, Vietnam
Local Trade and quarantine policy changes International trade negotiations
PANEL DISCUSSION
1. Mr Ngo Quang Tuan, FOCOCEV, Sonla Vietnam2. Bumi Sari Prima Starch Factory, North Sumatra, Indonesia3. Mr Dang Cong Nguyen, Dai Viet Ethanol Factory, Daklak Vietnam4. Mr Somsay Didouangdeth – Chip processor, Bolikhamxai Lao PDR
Mr Ngo Quang Tuan, FOCOCEV, SonlaVietnam
Your company has recently increased processing capacity. There are also new starch factories in Sonla. How do you see the supply and demand for roots changing in the next few season?
How are the new trade regulations with China impacting the way you manage the business?
Bumi Sari Prima Starch Factory, North Sumatra, Indonesia
How has the supply of fresh roots to the factory recovered after the low prices and area decline of 2015-16?
How has the prospects of starch production in North Sumatra changed in the last 2 years?
-80
-60
-40
-20
0
20
40
60
80
100
200
250
300
350
400
450
500
550
600
650
Oct
-09
Mar
-10
Aug-
10
Jan-
11
Jun-
11
Nov
-11
Apr-
12
Sep-
12
Feb-
13
Jul-1
3
Dec-
13
May
-14
Oct
-14
Mar
-15
Aug-
15
Jan-
16
Jun-
16
Nov
-16
Apr-
17
Sep-
17
Feb-
18
Jul-1
8
Dec-
18
May
-19
Diffe
renc
e (T
hai -
Dom
estic
@ F
acto
ry g
ate)
Star
ch P
rice
(USD
/t)
Difference Thai Starch (FOB Bangkok) Indonesia Starch (East Java) Thai + Freight
Thai Cheaper Thai Cheaper
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
Molasses Dried Chips Fresh root Future CBOT
Feed stock Other costs
Daklak, Vietnam
Mr Dang Cong Nguyen, Dai Viet Ethanol Factory, Daklak Vietnam
How do you see the outlook for cassava as a feedstock into ethanol production?
With sugar prices falling – do you think molasses prices are likely to increase?
How important is having your own supply of roots to the viability of the business?
Trade and quarantine policy changesMr Somsay Didouangdeth – Chip processor, Bolikhamxai Lao PDR
How do you see the outlook for dried chip production in Bolikhamxai?
How are the new quarantine measures impacting the cost of exporting chips to Thailand? How does this impact the price of fresh roots?
Thank you!
