Opportunities for Developing Cassava Markets
Truman P. PhillipsDecember 2008
Questions to be addressed
• Do exports provide the greatest opportunities for developing cassava markets?
• Are there other opportunities for developing cassava markets?
• What are some of the barriers to developing these markets?
• How can these barriers be overcome?
Do exports provide the greatest opportunities for developing cassava
markets?
World Imports of All Cassava Products ($1000)
Regional Imports of All Cassava Products ($1000)
Asia Europe
North America South America
Major Cassava Importers of Products in 2005
REGION COUNTRY CASSAVA DRIED CASSAVA STARCH CASSAVA TAPIOCA TOTAL
Africa South Africa $0 $6,346 $0 $6,346Asia Bangladesh $0 $2,636 $1,798 $4,434Asia China $421,746 $189,531 $3,031 $614,308Asia China, Hong Kong SAR $0 $13,786 $2,015 $15,801Asia Indonesia $0 $24,410 $0 $24,410Asia Japan $3,543 $26,424 $2,168 $32,135Asia Korea, Republic of $34,785 $2,970 $0 $37,755Asia Malaysia $0 $28,733 $0 $28,733Asia Philippines $0 $9,141 $0 $9,141Asia Singapore $0 $12,287 $0 $12,287Asia Sri Lanka $0 $1,057 $0 $1,057Central America Caribbean Aruba $0 $0 $3,171 $3,171Europe Belgium $2,946 $0 $0 $2,946Europe France $3,937 $2,873 $0 $6,810Europe Germany $0 $3,266 $0 $3,266Europe Netherlands $10,826 $4,152 $0 $14,978Europe Portugal $10,184 $0 $0 $10,184Europe Russian Federation $0 $2,392 $0 $2,392Europe Spain $29,012 $0 $0 $29,012Europe Sweden $0 $1,381 $0 $1,381Europe United Kingdom $2,056 $0 $0 $2,056Northern America Canada $1,318 $3,667 $1,711 $6,696Northern America United States of America $38,340 $7,974 $4,954 $51,268Oceania Australia $0 $1,498 $0 $1,498Oceania New Zealand $0 $1,182 $0 $1,182South America Brazil $0 $1,497 $0 $1,497South America Colombia $0 $1,151 $0 $1,151South America Venezuela, Bolivarian Rep $0 $1,279 $0 $1,279
($1,000)
Major Cassava Importers of Products in 1980
Region Coountry Cassava Dried Cassava Starch Cassava Tapioca Total
Asia China $0 $9,087 $8,645 $17,732Asia China, Hong Kong SAR $0 $0 $4,259 $4,259Asia Japan $1 $20,324 $7 $20,332Europe Belgium-Luxembourg $147,951 $274 $342 $148,567Europe Denmark $10,679 $256 $0 $10,935Europe France $67,096 $2,066 $0 $69,162Europe Germany $228,236 $551 $0 $228,787Europe Ireland $8,958 $172 $0 $9,130Europe Italy $16,490 $20 $0 $16,510Europe Netherlands $414,661 $522 $0 $415,183Europe United Kingdom of Great B $11,088 $1,705 $1,198 $13,991Northern America Canada $0 $764 $343 $1,107
$1,000
Thai Exports ($1000)
Major Cassava Exporters ($1000)
Production and Root Equivalence Exports
Production and Root Equivalence Exports by Region
Africa Asia
Central America and Caribbean South America
Conclusion drawn from Trade Trends
• General volume of traded cassava is stable• Product mix continuously changes• Prime importers changed• Prime exporters relatively stable, and Thailand
dominants the market• Unless potential exporters of cassava can compete
with China, Costa Rica, Indonesia, and Thailand in terms of price, quantity, quality and delivery the opportunities for exporting cassava are next to zero
• The major market for cassava is in the producing countries
Are there the opportunities for developing cassava markets domestically?
Sources for Market Growth• Concentration: Market growth can occur when the
relative number of producers decreases but the total demand remains fairly constant. An example is increasing urbanisation accompanied by continued consumption of cassava by the new urban dwellers.
• Competition: Market growth occurs because cassava and cassava products becomes economically more attractive for a particular use than do competing products. This has certainly been the case for cassava as an animal feed ingredient in Europe.
• Innovation: Market growth occurs because cassava is found to have unique characteristics suitable for a new market. Such a case might be the use of cassava for the production of beta-carotene rich foods, production of waxy starches, or the production of non-allergenic foods.
Concentration
A major factor driving market growth is the fact that non-producers of cassava products
(urban population) continue to consume cassava products.
Hence more consumers per cassava producer and processor
Regional Population TrendsAfrica Asia
Central America and Caribbean South America
Regional Production and Consumption Trends
Cassava Production and Production Per Capita for Selected African Countries
And for Selected South American and Asian Countries
Potential Market Growth owing to Urbanisation (2005 to 2015)
REGION COUNTRY Total 2005 Urban 2015 Total 2015 Percent Increase Percent Urban
Africa Angola 3,857,722 2,227,064 4,881,793 27.00% 46.00%Africa Benin 1,316,484 942,843 1,736,450 32.00% 54.00%Africa Burundi 709,512 124,608 861,689 21.00% 14.00%Africa Cameroon 1,485,302 1,093,800 1,779,571 20.00% 61.00%Africa Central African Republic 524,940 294,129 606,671 16.00% 48.00%Africa Chad 331,466 131,357 445,842 35.00% 29.00%Africa Comoros 58,254 31,428 74,379 28.00% 42.00%Africa Côte d'Ivoire 1,470,474 876,540 1,759,258 20.00% 50.00%Africa Gabon 114,872 129,559 138,126 20.00% 94.00%Africa Ghana 4,842,747 3,088,986 5,896,898 22.00% 52.00%Africa Guinea 1,250,466 683,189 1,519,370 22.00% 45.00%Africa Guinea-Bissau 39,650 22,918 51,377 30.00% 45.00%Africa Kenya 411,072 280,565 503,961 23.00% 56.00%Africa Liberia 476,035 370,933 684,548 44.00% 54.00%Africa Madagascar 2,158,296 794,103 2,794,326 29.00% 28.00%Africa Malawi 1,133,792 305,967 1,415,208 25.00% 22.00%Africa Mali 13,518 7,213 17,530 30.00% 41.00%Africa Mozambique 4,888,624 3,119,439 5,928,292 21.00% 53.00%Africa Niger 125,613 49,580 170,742 36.00% 29.00%Africa Nigeria 14,994,420 10,674,349 18,494,323 23.00% 58.00%Africa Rwanda 1,147,826 960,692 1,828,349 59.00% 53.00%
Consumption
Potential Market Growth owing to Urbanisation (2005 to 2015) (contined)
REGION COUNTRY Total 2005 Urban 2015 Total 2015 Percent Increase Percent Urban
Asia China 1,323,345 725,882 1,414,938 7.00% 51.00%Asia India 6,620,226 2,362,464 7,666,195 16.00% 31.00%Asia Indonesia 13,144,079 9,206,814 14,760,223 12.00% 62.00%Asia Malaysia 354,858 320,411 430,528 21.00% 74.00%Asia Myanmar 101,038 40,004 112,945 12.00% 35.00%Asia Philippines 1,578,026 1,335,867 1,875,762 19.00% 71.00%Central America Caribbean Costa Rica 8,654 7,044 10,510 21.00% 67.00%Central America Caribbean Cuba 270,456 215,635 278,998 3.00% 77.00%Central America Caribbean Dominican Republic 106,740 77,446 121,912 14.00% 64.00%Central America Caribbean El Salvador 13,762 10,762 16,355 19.00% 66.00%Central America Caribbean Guatemala 12,599 7,955 15,567 24.00% 51.00%Central America Caribbean Haiti 238,784 123,002 271,658 14.00% 45.00%Central America Caribbean Jamaica 5,302 2,942 5,607 6.00% 52.00%Central America Caribbean Nicaragua 38,409 28,389 46,056 20.00% 62.00%Central America Caribbean Panama 22,624 16,213 26,833 19.00% 60.00%South America Argentina 38,747 39,409 42,572 10.00% 93.00%South America Bolivia 183,640 152,240 220,474 20.00% 69.00%South America Brazil 7,642,605 7,868,096 8,696,304 14.00% 90.00%South America Colombia 1,550,400 1,485,036 1,800,679 16.00% 82.00%South America Ecuador 105,824 81,666 120,759 14.00% 68.00%South America Guyana 16,522 7,178 16,905 2.00% 42.00%South America Paraguay 775,908 625,153 964,482 24.00% 65.00%South America Peru 699,200 629,602 806,102 15.00% 78.00%
Consumption
Conclusions about Concentration Trends
• Cassava consumption is typically sourced within the country it is produced
• Cassava production per capita has been fairly stable in most countries
• Cassava consumption of has tended to be relatively stable implying that urban population continue to consume cassava
• If this trend continues the greatest increases will occur in Africa
• It is anticipated that to maintain this trend cassava products need to be developed which are attractive to urban consumers.
• Also to maintain this trend cassava productivity must improve since each producer will be providing food for more individuals.
Competition
A major factor driving market growth is the production of cassava and cassava based
products which are competitive with alternative crops.
These opportunities often exist when the alternative crops are imported.
The following tables contain some estimates of the potential competitive options for cassava in
selected African countries
Competition opportunities for Selected African Countries
Country Cassava Prod 2000 10% Maize Import
Replacement
10% Wheat Import
Replacement
Urban Growth
Potential
Sum of Opportunities
% of Cassava
Production
Congo, D.R. 15,959,000 14,722 62,464.17 163,266 240,452 1.51%
Kenya 418,221 104,285.50 187,510 8,992 300,788 71.92%
Madagascar 2,463,360 1,405.50 32,473 34,523 68,402 2.78%
Malawi 2,757,190 2,267.75 17,004 19,499 38,771 1.41%
Mozambique 5,361,974 31,250.00 65,880 124,181 221,311 4.13%
Tanzania 7,120,000 16,744.00 88,232 120,944 225,920 3.17%
Uganda 4,966,000 4,855.75 30,170 16,445 51,471 1.04%
Zambia 815,248 1,892.00 17,177 8,993 28,063 3.44%
Estimates of Competitive Options in Nigeria
Sector Current
Alternative Product Use
Substitution (%)
Equivalent in fresh cassava roots
(tonnes) Food 1,180,000 20 1,000,000 Starch 67,100 100 350,000 Livestock 1,200,000 20 1,000,000 Ethanol 20,900 100 2,000,000 Total 4,500,000
The Thai Target
Thailand Cassava Dried Cassava Starch Cassava Tapioca Cassava EquivalentTonnes 2,904,153 767,420 22,612 11,621,252‘000 US$ 191,227 135,020 5,520 346,783Unit Price $65.84 $175.94 $244.11 $29.84
In addition to cassava production capacity there is a need to have efficient processing capacity.
An important part of competition is the price of raw material. As the world leader in cassava exports Thailand sets the price target that other countries
should aspire to achieve.
Again the example of Thailand provides an indication of the production capacity needed to be competitive. Thailand currently has 200 pellet factories with a total capacity of 10 million tonnes a year. It also has more than 40 starch factories with a total capacity of over 1 million
tonnes of starch
Domestic Root Prices 2005Prices $60 to $100/mt Prices <$60/mt
Burkina Faso Barbados Congo, Republic of MadagascarBurundi Belize Gambia IndiaCameroon Costa Rica Ghana LaosCôte d'Ivoire Dominican Republic Kenya ThailandEquatorial Guinea El Salvador Malawi BrazilGuinea Honduras RwandaMali Jamaica IndonesiaMauritius Mexico PhilippinesMozambique Panama NicaraguaNiger Puerto Rico ParaguayNigeria Saint Lucia PeruSudan Trinidad and TobagoTogo Cook IslandsZimbabwe ArgentinaCambodia BoliviaChina ColombiaMalaysia EcuadorMyanmar SurinameSingapore Venezuela,Bolivar Rep ofSri Lanka
Prices >$100/mt
Conclusions drawn from Competitive Trends
• The cassava product must be competitive. Competitiveness is a combination of price, quantity and quality. All these components start with the production of cassava. If the price of cassava is over $100/tonne it is unlikely that a cassava product can be competitive.
• Quality of the product is primarily a function of processing. Inconsistent processing will normally lead to a poor quality product.
Innovation
A major factor driving market growth is the production of cassava and cassava based
products which have properties which have not previously been associated with cassava
and cassava based products.
This opportunities often arises when it is possible to change the composition of
cassava or the products made with cassava.
Market Opportunities available through modification of cassava• Beta-carotene rich cassava (yellow cassava). Research
reveals that this cassava can provide therapeutic levels. The hope is that beta-carotene rich cassava products can help reduce the Vitamin A deficiency that exist in many countries.
• Waxy Cassava may find a niche in the high amylopectin starches. There are continued reports of finding new uses for Waxy Maize.
• Process technologies used to produce extruded snack foods is creating new markets for a number of crops including cassava
• Gel fuel an innovative bio-fuel that can be used for cooking, heating and light which can be made with cassava
What are some of the barriers to developing these markets?
Some Economic and Institutional Barriers to Development of Markets
• Cassava still suffers from its subsistence crop reputation
• Markets are thin (low volume and infrequent transactions)
• Public goods such as roads, legal system, research are missing
• Information is missing or unavailable• Products do not conform to a standard• Markets are imbalanced with a few buyers or
sellers able to influence price• Cassava lacks supporting policies or suffers from
policy that advantage other crops
Some examples of market problems from Nigeria
Lack of Roads
Nigeria Target Prices for Crop Substitution
Replace crop commodity
Import Price US$ per tonne
or litre
Conversion Implicit Root Price US$ per tonne or litre
Maize $178.00 3.125 $56.96Wheat Flour $250.00 5.000 $50.00Ethanol $0.65 150.000 $97.50Starch $540.00 5.000 $108.00
If Nigeria were to realise the aforementioned opportunities Nigeria would not have the capacity to produce the required products
Number of Plant needed to Meet Nigerian Market Opportunities
Market Opportunities Small Medium Large WorldFood for urban 96,969 - - -Food for rural 29,992 - - -Food for export 12,500 - - -Food as flour 12,823 - - -Livestock chips 4,623 2,312 - -Livestock pellets - - 39 12Starch 4,589 - - 92Ethanol 1,145 57 29 2
Scale of Operation
How can these barriers be overcome?
• Not easily• One suggestion is to adoptive an approach that
systematically examines the barriers and identifies opportunities to overcome these barriers
• What follows are two applications of this approach
Develop Marketing Strategy
• to assess untapped value added product opportunities;
• to assess the availability of cassava for the production of the product;
• to identify constraints that could limit the development of that product market opportunity; and
• to identify methods for overcoming constraints• to identify the key stakeholders
Private Enterprise Support Activities (PESA)
A Nigerian Example
Indicators used to identify States in Nigeria with good production potential
• Low population density so that large contiguous blocks of land could be utilized for cassava production
• Proximity to roads
• Higher than average yields (>12 tonnes per ha)
• Low absolute root prices and one that is below 80% of maize threshold price
Indicators used to identify States in Nigeria with good processing potential
• Low cassava root and gari prices. If gari prices are high there could be a tendency to divert cassava roots from a new industry to the existing gari market
• Low cassava to maize price ratio
• Proximity to roads
• Existence of potential cassava-using industries such as animal feed, flour and starch.
Six production states were identified and Sixteen processing states were identified
Zone State High
Production Potential
High Processing Potential
NC Kogi √ √ NC Kwara √ √ SS Edo √ √ SW Ogun √ √ SW Ondo √ √ SW Oyo √ √ NC Benue - √ NC Nassarawa - √ NW Kano - √ NW Niger - √ SE Abia - √ SE Anambra - √ SE Enugu - √ SS Delta - √ SS Rivers - √ SW Lagos - √
States Identified for Expanded Cassava Production
States Identified for Expanded Industrial Cassava Processing
THE END