Presentation at the World Root and Tuber Congress and GCP21 Conference. Jan 2016

1. Cassava in Asia: Exposing the drivers
and trajectories of the hidden
ingredient in global supply chains
Dr Jonathan Newby
CIAT Asia, Hanoi
j.newby@cgiar.org
World Congress on Roots and Tubers
18th – 22nd January 2016
Nanning, China

2. Cassava production in Southeast and East Asia
Western Africa
30%
Middle Africa
14%
Eastern
Africa
13%
South-
Eastern
Asia
28%
South America
10%
Eastern Asia
2%
Western Africa
30%
Middle Africa
20%
Eastern Africa
18%
South-
Eastern
Asia
18%
South America
11%
Share of global cassava area
Share of global cassava production
• Introduced to Asia in the late 18th to early 19th Century
• While initially an important food crop, early stages of
commercialisation began during the late 19th Century
FAO Stats

3. Diverse cassava production system in
Southeast Asia
Cambodia
10%
Indonesia
28%
Lao
PDR
2%
Malaysia
0%
Myanmar
1%
Philippines
6%
Thailand
38%
Viet Nam
15%
Share of Southeast Asia’s 3.6 million hectares of cassava
FAO Stats

4. Phases of development driven by policy and
market changes
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
AreaofcassavainAsia(millionha)
Philippines
Myanmar
Lao People's Democratic Republic
India
China, mainland
Cambodia
Viet Nam
Thailand
Indonesia
Asia
Phase 1 – Post war
Phase 2 – European livestock
feed market
Phase 3 – Starch
utilisation
Phase 4 – China demand
FAO Stats

5. Consumption of cassava in Asia (FAO)
0
100
200
300
400
500
600
700
800 Congo
Ghana
Mozambique
Angola
Benin
CentralAfricanRepublic
Liberia
Togo
Côted'Ivoire
Madagascar
Paraguay
Cameroon
Nigeria
Uganda
Guinea
SierraLeone
Rwanda
Zambia
Gabon
Malawi
UnitedRepublicofTanzania
Indonesia
Peru
Guinea-Bissau
SaoTomeandPrincipe
Brazil
Fiji
Colombia
Haiti
Cambodia
LaoPeople'sDemocraticRepublic
Cuba
Philippines
Chad
Timor-Leste
Zimbabwe
DominicanRepublic
Kenya
Bolivia(PlurinationalStateof)
SriLanka
Thailand
Venezuela(BolivarianRepublicof)
Myanmar
Senegal
FrenchPolynesia
CaboVerde
VietNam
BruneiDarussalam
Nicaragua
Niger
kcal/capital/day
Indonesia = 47kg/year
Thailand = 13kg/year
Vietnam = 8kg/year

6. Rice centric nations of Southeast Asia
0
500
1000
1500
2000
2500
(kcal/capita/day)
Wheat and products
Rice (Milled Equivalent)
Potatoes and products
Millet and products
Maize and products
Cassava and products
Beans
FAO Stats

7. Cassava food value chains in Southeast Asia

8. Over 306,000 cassava households in Nusa Tenggara Timur – 85% sell no cassava
Still plays an important role in the upland
subsistence oriented livelihoods
Percent of households not marketing
any cassava production
G.Smith

9. Remains a hidden ingredient in global supply
chains
• Cassava still has a reputation of being grown as a
secondary refuge crop grown by poor upland
farmers
• Little appreciation of its modern application, with
consumers unaware of their consumption and
interactions with cassava starch
• Historically, a low priority of national governments
• Largely off the donor radar
• Limited private sector investment beyond the
processing industry

10. Population, economic growth and demand in
Asia
0%
10%
20%
30%
40%
50%
60%
China
India
Indonesia
Bangladesh
Japan
Philippines
Vietnam
Thailand
Myanmar
Korea,Rep.
Malaysia
Nepal
Korea,Dem.Rep.
Cumulativeshareofglobalpopulation

11. Rising incomes in Asia and changing consumer
preferences
0
5
10
15
20
25
30
35
40
GNIpercapita(PPP)-ThousandInternationalDollars
China
Indonesia
India
Cambodia
Korea, Rep.
Lao PDR
Philippines
Thailand
Vietnam
World
World Bank Stats
G.Smith

12. Not an “economic inferior” good
• Livestock feed
• Paper industry and glues
• Textiles
• Sweeteners
• Processed food sector
• Pharmaceuticals
• Alcohol
• Bioplastics
• Biofuel
Desirable functional traits:
Meat products, sauces, frozen foods, dairy products,
noodles
• High viscosity, firm and elastic texture
• Freeze thaw stability.
• Provide short texture and reduce water
separation
• Smooth texture and paste clarity
• Prevent cracking, good freeze thaw
• Smooth and improve mouth feel
Cost competitive compared to substitutes?
• Maize, sorghum, sugarcane, potatoes, etc
• Oil

13. Growing demand for protein in Asia
China, mainland
0
5
10
15
20
25
30
35
40
1961
1966
1971
1976
1981
1986
1991
1996
2001
2006
2011
Kg/capita/year
Bovine Meat Pigmeat
Poultry Meat
Vietnam
0
5
10
15
20
25
30
35
40
1961
1966
1971
1976
1981
1986
1991
1996
2001
2006
2011
Kg/capita/year Bovine Meat Pigmeat
Poultry Meat
FAO Stats

14. 0
0.5
1
1.5
2
2.5
3
3.5
4
4.5 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Valueofexports(BillionUSD)
Cassava (fresh and dried) Cassava Starch
Multi-billion dollar export industry
Comtrade

15. Cassava Roots
(40.76)
Cassava chips and
pellets
(17.19)
Domestic
(1.13)
Export
(16.06)
Cassava starch
(21.81)
Domestic
(5.88)
Export
(15.93)
Ethanol
(1.76)
280 Million Litres
(1.76)
42%
54%
4%
3%
39%
39%
4%
14%
Thailand cassava domestic and export utilisation
(million tons)
78% exported
Source: TTTA

16. 0
2
4
6
8
10
12 1961
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
2005
2009
2013
ImportQuantity(milliontons)
Eastern Asia South-Eastern Asia
Western Europe World
0
0.5
1
1.5
2
2.5
1961
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
2005
2009
2013
Importvalue(billionUSD) Eastern Asia South-Eastern Asia
Western Europe World
Impact of policies on orientation of cassava trade
FAO Stats

17. Trade in cassava (fresh and dried 2013)
Comtrade
China – 89%
Thailand – 1.3 billion USD
Vietnam– 387 million USD

18. 0
50
100
150
200
250
300
350
400
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
CassavaArea(thousandha)
Cambodia Lao PDR Myanmar
Cross-border trade and investment
G.Smith

19. 0
0.5
1
1.5
2
2.5
3
3.5
4
4.5 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
ExportValue(BillionUSD)
Manioc (cassava) starch Maize (corn) starch
Potato starch Wheat starch
Other starches
Globally the most widely traded starch
Comtrade
G.Smith

20. Trade in cassava starch (2013)
1st - 61%
2nd - 5.8%
Comtrade
Vietnam – 707 million USD
Thailand – 1.14 billion USD

21. 0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2001 2003 2005 2007 2009 2011 2013 2015
(to
Nov)
ExportofCassavastarch(Milliontons)
Native Starch Modified Starch
0
5
10
15
20
25
30
35
40
45
2001 2003 2005 2007 2009 2011 2013 2015
(to
Nov)
Starchexportvalue(Billionbaht)
Native Starch Modified Starch
Growth in export of Thai native and modified starch
Source: TTSA

22. Sweeteners
44%
Monosodium
Gultamate
(MSG)
18%
Whole Salers
13%
Modified Starch
10%
Paper
7%
Tapioca Pearls
4%
Textile
1%
Other
3%
Starch
Sweeteners
46%
Sugar-hol
5%
Modified Starch
7%
Polyol
2%
Citric Acid
7%
Lactic acid
1%
glutanate
18%
Lysine
5%
Other amino
acids
1% Food
8%
Utilisation of starch in Thailand and China
Thai Domestic use of cassava starch Chinese use of all starch
Source: TTTA
Source: Jin Shu-ren

23. -300
-200
-100
0
100
200
300
400
500
600
Jun-08
Dec-08
Jun-09
Dec-09
Jun-10
Dec-10
Jun-11
Dec-11
Jun-12
Dec-12
Jun-13
Dec-13
Jun-14
Dec-14
Jun-15
USDperMT
Difference
US Gulf Maize (FOB)
US Gulf Maize CNF China + VAT
Chinese Futures (DCE)
Has it been too good to be true?: Impact of grain policy
Stockpile = ???

24. Who has been doing well?
Farmers when connected to competitive value chains
0
20
40
60
80
100
120
140
160
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
Sep-15
PriceIndex(Jan2012=100)
Cassava Starch Cassava Roots (Factory gate)
Central Highlands Vietnam
N.Palmer

25. Falling global prices in alternative land uses
0
50
100
150
200
250 Jan-10
Aug-10
Mar-11
Oct-11
May-12
Dec-12
Jul-13
Feb-14
Sep-14
Apr-15
Nov-15
PriceIndex(Jan2010=100)
Palm oil
Maize
Sugar, world
Rubber, SGP/MYS
WorldBank PinkSheets

26. 0
100
200
300
400
500
600
700
0
100
200
300
400
500
600
Jun-08 Oct-09 Mar-11 Jul-12 Dec-13 Apr-15
ThaiTapioca(USD/t)
Maizeprice(USD/t)
US Corn (FOB GULF) US Corn + Freight +VAT
DaLian (China) Nearby Futures Thai Tapioca (FOB Bangkok)
Cassava following the correction in maize prices

27. • Small-scale labor intensive starch processors
have found it difficult to compete for raw
material unless they have a niche market
• E.g. Small-scale processors in Cambodia
closed as they struggled to compete for
roots
• Large processors of raw material, but not linked
to Chinese market
• E.g. Biofuel industry in Vietnam
• Deep processors depending on cassava starch,
but competing against maize based products
• E.g. Glucose, sorbitol producers
• Limited utilisation in domestic livestock sector
Who has been doing it tough?
G.Smith

28. -200
-100
0
100
200
300
400
500
600
700
Oct-09
Mar-10
Aug-10
Jan-11
Jun-11
Nov-11
Apr-12
Sep-12
Feb-13
Jul-13
Dec-13
May-14
Oct-14
Mar-15
Aug-15
StarchPrice(USD/t)
Difference
Corn starch, Midwest
Tapioca Starch (Super High-Grade) Bangkok
Tapioca starch versus corn starch
USDA, TTTA
G.Smith

29. Productivity will be critical for maintaining competitiveness:
particularly with current freight costs
0
5
10
15
20
25
0
2
4
6
8
10
12
1961
1966
1971
1976
1981
1986
1991
1996
2001
2006
2011
Rootyield(t/ha)
Grainyields(t/ha)
US Maize Grain Yield Thai Maize Grain Yield
Thailand cassava Root Yield
0
1
2
3
4
5
6
7
1961
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
2005
2009
2013
StarchYield(t/ha)
Thailand Cassava US Maize
Currently less than $25 USD/t bulk freight from the US to China
FAO Stats

30. Private sector engagement
• Evaluate and stimulate adoption of existing
technologies
• Different incentive to invest in some value chains,
eg. Cassava starch versus cassava chip trade
• Some technologies provide less ability to capture
the returns on investment, eg. Variety
dissemination versus soil conservation
• Competition for feedstock and ability to capture
returns on investment
• Collective action and lobby for government support
for the industry
• Cassava association and regional learning alliances
a good start
• Invest in R&D to lift starch yield potential and
functional traits?
Factory and traders conducting variety assessment with
researcher – North Sumatra, Indonesia
Factory experimenting with cassava varieties and
management to produce raw material throughout
season, Central Highlands, Vietnam

31. Public sector support
• Private sector involvement not a panacea
• Recognise that there are threats to productivity on
the horizon that need public sector leadership
• Land degradation
• Emerging pests and diseases in Asia
• Opportunity for national governments to deliver
both improve rural livelihoods for smallholders and
economic development
• Conditions for inclusive development
• Be proactive rather than let the trajectory of the
cassava sector oscillate based on developments in
substitute commodities
• Strengthen linkages and partnerships between
research, industry, governments and farmers
G.Smith