Impact from cassava price

Increasing tapioca starch prices will likely delay some cassava-based food additive projects, say manufacturers.

Domestic prices of tapioca starch have been rising strongly in line with costly cassava roots, as output has dropped due to drought and an invasion of pink cassava mealybugs. Starch prices hit 19.50 baht a kilogramme on average this month, driving export prices above US$600 per tonne, compared with 12 baht per kg and $400 a tonne earlier this year and eight baht a kg and $280 a tonne last year.

"Considering these high prices, we might opt to wait and see before investing in making cassava-based maltodextrin," said Chanchai Chaodee, managing director of Chaodee Starch Co.

Chaodee, a producer and exporter of tapioca starch, plans to invest 200 million baht to produce maltodextrin, a polysaccharide used as an additive in food and medical products.

Strong starch prices decrease the competitiveness of cassava-based maltodextrin compared with imported products produced from other kinds of flour. Corn-based starch from China is now 23-24 baht per kg, compared with 27-29 baht for cassava-based maltodextrin made here.

Cassava production is estimated to drop to 20-21 million tonnes this year, or 30% from the previous season.

The company, located in the Northeast, uses about 2,000 tonnes of cassava roots a day to make 500 tonnes of starch for local paper makers such as Siam Cement and for export to China, India and Japan.Plans to produce ethanol from cassava have also been put off until production returns to normal levels, he said.

The maltodextrin project received support from the Industrial Technology Assistance Programme (iTAP). iTAP has teamed up with the Suranaree University of Technology to provide technical support for the project, which plans to produce about 50 litres of maltodextrin a day.

The agency is also helping the company to turn cassava waste into bio-fertiliser.