Summary

Given the wide variety of applications of cassava-based products (starch and chips) and the range in export destinations, the market outlook for cassava produced by smallholder farmers in Southeast Asia needs to be considered in the context of market and policy development in a range of commodities that can be substituted in different applications in which cassava is used; and geographies that both produce and consume these products.

On the demand side, the market outlook for cassava in Asia always needs to be considered in the context of substitutes in different applications. There are markets where:

(1) cassava chips compete with other sources of carbohydrate for processing into animal feed or ethanol (e.g., maize, sorghum, wheat, molasses). This include potable alcohol, industrial alcohol and biofuel;

(2) Applications where cassava starch competes largely on price with substitutes such as maize and potato starch. This includes applications such as glucose and other sweeteners or MSG; and

(3) Applications where the functional properties of cassava starch or ‘clean label’ status is desired (e.g., frozen food, dairy, gluten free).

(4) Markets where the direct consumption of cassava remains important – Indonesia, Philippines, Pacific

Global demand for the final products in which cassava is an ingredient are influenced by overall economic growth. That is, cassava is a ‘normal’ economic good in the vast majority of contexts in Asia. The COVID-19 pandemic in 2019-2020 has had limited impact on overall demand for cassava products given the strong demand from China, although demand has been impacted in other countries in the region, such as Japan and Indonesia. However, it is difficult to separate some of these impacts from other processes occurring.

On the supply side, the outlook depends on the relative competitiveness of cassava against other land uses, in the context of different trends and shocks. This is a function of:

(1) the price of cassava relative to other commodities that can be produced in the same agro-ecological zones (e.g., maize, sugarcane, coffee, rubber) and

(2) changes in production costs, particularly changing labour costs and the ease of mechanization.

Cassava supply will also be affected by long-term climate trends, floods and droughts, changes in land suitability and land degradation, and especially the impact of pests and diseases.

The spread of Cassava Mosaic Disease (CMD) is currently one of the biggest threats to cassava supply and has seen yields impacted throughout the region. CMD has now been reported in Vietnam, Cambodia, Thailand and Laos. While not reported in Myanmar, the westward march of the disease and developing connections to the Thai market mean the threat is high and vigilance is required. At the same time, widespread flooding in Vietnam and Cambodia impacted the supply of roots both through complete crop loss or lower yields that occurred due to early harvest to avoid root rot.

The following link present a high-level overview of market developments and how they are impacting cassava prices and smallholder farmers.