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Cassava powder price dips
The global cassava powder price has dipped, forcing Lao process ors to lower their purchase price for raw cassava.
A Lao-owned cassava powder exporter, Lao-Indochina Group Public Company, last week lowered the price it pays to farmers for their cassava crop from 600,000 kip to 500,000 kip per tonne.
Included in the new price is a fee for delivery of the raw product, which is processed into cassava powder, from farms to the factory, according to an announcement from the company.
Company Chairman Mr Sengmaly Sengvatthana said prices paid by the company are often changed according to fluctuations on the world market.
The price has dropped because export prices to China have dropped.
The company's Accounting and Financial Manager, Mr Namtha Thirakul, said presently the company's export price for powder is over US$400 per tonne, a decrease from the previous price of around US$450 a tonne.
Cassava powder producers in neighbouring countries are facing similar issues, including China, Thailand and Vietnam. “It happens worldwide, but I believe the price will soon rise again,” Mr Namtha said.
Another Lao-owned cassava powder exporter, KPN Tapioca Factory, in Champassak province has not changed the price it pays farmers for their cassava since last year.
KPN Tapioca Factory General Director, Ms Kongphat Thavitham, said “We have kept the price at 550,000 kip per tonne because we don't want to confuse farmers with global price fluctuations.”
Ms Kongphat said the price was low at present because there is a large amount of cassava powder being produced globally. Her current powder export price is only US$460 per tonne, including transport costs.
“However, if you have a large warehouse to store the powder to sell in the wet season, in August or September, you will get a better price because there is less production and supply at that time of the year.”
Mr Sengmaly said prices won't dip below 300,000 kip per tonne because his company contracts with farmers to guarantee a minimum price. This means that even if the price for processed cassava keeps on falling, the company won't buy the crop for less than 300,000 kip per tonne.
This is the seventh price adjustme nt by the company since 2009. It first increased the purchase price to 320,000 kip per tonne, before raising it further to 350,000 kip in October 2009 and to 400,000 kip per tonne in December. In 2010, it rose to 450,000 kip per tonne in March and to 500,000 kip in November, then to 600, 000 kip in October last year.
Factories producing cassava powder in Laos are located in Lau-ngam district of Saravan province and Meun district in Vientiane province, with both selling to local and overseas customers.
vientiane times
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