Cassava_Value Chain Analysis: Results and Discussions

A number of techniques to test performance agricultural commodity in the market are available like market integration, parity bound analysis, symmetry, error correction mechanisms and value chain analysis (VCA). Some studies used mathematical models including deterministic analytical models and stochastic models.

The VCA was performed because it is design to identify critical issues and constraints that undermine value chain development and identify business and technological opportunities that can enhance the performance and competitiveness of the sub-sector.

The first step done in mapping the market was delineating the value chain and simplifying it. At a glance, it was more complex than anticipated. The quantitative mapping  and the qualitative mapping showed the equation with inputs and outputs interacting with each other. As a result two value chains were mapped out: (1) Fresh Cassava Value Chain and (2) Dried Cassava Value Chain.  

NATURE AND STRUCTURE OF THE INDUSTRY

The bulk of world trade in cassava is in the form of pellets and chips for feed (70 percent) and the balance mostly in starch and flour for food processing and industrial use. Very little is traded in the form of fresh root, given the product’s bulkiness and perishable nature. Thailand is a dominant supplier to world markets, accounting for some 80 percent of global trade; Viet Nam and Indonesia both have a share of about 8 percent; and a few countries in Asia, Africa and Latin America provide  for the remainder.  

Countries in the Far East are the major destination of international trade flows in cassava. Over the past few years, China has emerged as the leading cassava importer, procuring mostly feed ingredients. Presently, the country accounts for around 60 percent of the global market. China has supplanted the EU as the single most important destination for international cassava shipments.

Countries wishing to establish themselves as new exporters of cassava products are likely to face stiff competition from Thailand. Overcoming the competitive advantage that Thailand possesses in exporting cassava products will prove a daunting challenge, particularly in the feed and starch markets.