Cassava Prices Drop Sharply Amid Low Demand

Cassava export prices have fallen to new lows amid decreasing demand from international markets, particularly China, traders say.

Taun Sara, a cassava trader in Battambang province, said the export price to Thailand, also an important market, had dropped to it lowest level in six years.

“This time last year, we traded at 6 baht [about 680 riel] per kg. Now we are getting 4.6 baht [about 525 riel] per kg,” Ms. Sara said. “The price has recently been dropping every day; it’s getting lower and lower, and I have never seen a drop like this before.”

Farmers and traders in the country’s two other main cassava-growing provinces, Banteay Meanchey and Ratanakkiri, noted similar falling prices in recent weeks.

Cambodia lacks facilities to process raw cassava, and farmers have traditionally focused on exporting to Thailand and Vietnam, where the crop can be processed and then exported to China, said Rouen So­vannarith, president of the Cambodia Rural Development Agency, which works with about 450,000 cassava farmers nationwide.

But slack demand in China and competing harvests in Vietnam and Thailand has hurt demand for Cambodian cassava, Mr. Sovannarith said.

“Because oil prices are low, China is importing much more oil than cassava [compared to in the past], which can be used to produce ethanol, a substitute for oil,” Mr. So­vannarith said. “And farmers in Vi­etnam and Thailand have started to make their own yields now.”

If demand continues pushing prices down, Mr. Sovannarith said, he expected Cambodian farmers would stop growing cassava. To avoid wasting existing crops, he said, the government should en­courage investment in storage fa­cilities and boost domestic markets by establishing ethanol and cassava-flour factories.

Mr. Sev Ly, a cassava farmer in Ratanakkiri, said traders who act as middlemen selling his produce to Vietnam had seen a 16 percent fall in export prices since Sunday, squeezing profit margins for both traders and growers.

“The traders who buy our cassa­va said that if we don’t want to sell to them at lower prices, we can take them to sell to Vietnam ourselves,” Mr. Ly said, adding many farm­ers could not afford the cargo trucks that would make that process viable.

“If the prices continue to fall, I will abandon this crop and try to find another that may be more mar­ketable and profitable soon.”

[email protected]

© 2016, The Cambodia Daily. All rights reserved. No part of this article may be reproduced in print, electronically, broadcast, rewritten or redistributed without written permission.