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Cassava up on peaking demand, low supply

CASSAVA prices have soared in recent months on reduced output and increased demand from Thailand after the removal of a ban on cassava imports from Cambodia in May, industry insiders say.

A tonne of dry-chip cassava is fetching between US$160 and $170 a tonne this month, up 17 percent from $145 in December last year and 51 percent from a May low of $112 per tonne, according to Kim Jung Ho, administration director at MH Bio-Energy Cambodia. The firm buys around 15,000 tonnes per month to produce ethanol, bio-plastics and food products.

Higher prices were due to a combination of reduced supply and increased demand, said Yang Saing Koma, president of the Cambodian Center for Study and Development in Agriculture (CEDAC). “Some farmers abandoned this crop because of a serious drop in prices beginning in November last year – it discouraged farmers to grow it,” he said.

Farmers grew cassava on an estimated 100,000 hectares last year, but the figure declined in 2009, he said, adding that no precise stats were available.

Kim estimated that the area under cassava cultivation was down around 10 percent compared with last year.

Som Yen, director at cassava broker Malai Trading Company in Banteay Meanchey province, said the end of the Thai ban on Cambodian cassava imports was the key reason for higher prices.

“Under the trade ban farmers had few buyers for their cassava, so it was quite cheap at the time. This year, it’s a good market for the crop because it is possible to export to Thailand,” he said.

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