Exports of cassava starch to face hurdles this year

It is expected that throughout 2020, China will continue making adjustments to the Value Added Tax for cassava starch that are imported through official channels from 13 per cent to 10 per cent, resulting in the price of cassava starch being exported through border areas becoming less competitive.

Illustrative image (Source: Internet)

According to the Agro Processing and Market Development Authority under the Ministry of Agriculture and Rural Development (MARD), Vietnam’s exports of cassava and cassava-based products during 2019 reached 2.5 million tonnes with a value of US$973 million, representing a rise of 3.2 per cent in volume and 1.6 per cent in value against the figures from 2018.

The average export price of cassava and cassava-based products throughout the previous year was at an estimated US$386 per tonne, down 2.3 per cent compared to 2018.

With regard to the market structure, China continued to be the largest importer of the country’s cassava products last year, making up 89.2 per cent of the market share, up 0.6 per cent in volume and down 1 per cent in value compared to 2018.

They were followed by the Republic of Korea’s with 3.1 per cent of the market share, Taiwan at 1.5 per cent, Malaysia at 1.2 per cent, and the Philippines at 1.2 per cent.

Most notably, the import demand for Vietnamese cassava chips and starch from China experienced a downward trend.

In addition, the northern neighbour also tightened regulations regarding labeling, packaging, and information on all cassava starch products coming from Vietnam, while closely monitoring imports through border trade channels in the process.

At present, the supply source of cassava chips from the 2019 to 2020 crop continues to suffer a decline as a result of scarce inputs, while cassava starch processors are speeding up their purchases.

Moreover, the price of maize and wheat has also experienced an upward trend, meaning that the demand for cassava chips within the animal feed industry is predicted to enjoy positive growth over the course of the year.