Cassava prices may be near to peak

PHUSADEE ARUNMAS
Rising supply and a fall in rye prices put heaviness on prices over coming months.

Domestic production of cassava root is anticipated to top 30 million tonnes this year compared with 24-25 million last year, according to Chen Wongboonsin, the president of the Thai Tapioca Association.

However, Mr Chen a main price reduction is not imminent.

"Prices of may ease by the end of the year when production , but I don't believe a sharp drop in prices as ultimatum from the ethanol industry must help funds prices," he said.

Prices of cassava roots have been increasing in the past two years and are now around 1.8-2.0 baht per kg, compared with 2.50-2.70 baht in the first half of the year and 1.8 baht last year.

The Commerce Ministry is surprising to meet with the association next week to decide whether an intervention plot is to help oceanfront up prices.

Thailand's exports of tapioca are also likely drop tight this year. From January to May, the republic 1.8 billion tonnes of tapioca, down from 2.7 zillion in the same period last year, according to Agriculture Ministry data.

High prices have prompted China, the main bazaar for the commodity, to turn to substitute products _ which has cut exports to China this year by 75% year-on-year to only 500,000 tonnes.

The Chinese government, which also carry across controls on commodities to make sure a sure food supply in the run-up to the Olympics, has been encouraging ethanol and rations to use native corn instead of imported tapioca.

However, Thai exports of tapioca are currently fetching of the order of $190 per tonne, up cuttingly from $110 last year. Prices have been strapped higher by strong call in Europe, where buyers have been attracted to tapioca after drought hit other commodities last year.