Currently, cassava is grown in over 100 countries worldwide, with vastly different cultivation scales. The global cassava production has remained relatively stable in recent years, averaging around 230 million metric tons.
The situation of cassava production and consumption in Vietnam.
In Vietnam, cassava ranks as the third most important staple crop after rice and maize. Cassava has transitioned from being primarily a food crop to becoming a competitive industrial commodity. Cassava production serves as a significant source of income for many poor farmers due to its ease of cultivation, low land requirements, minimal initial investment, ecological suitability, and compatibility with small-scale agricultural conditions.
According to statistics from the General Department of Customs, in July 2023, Vietnam exported 145.23 thousand tons of cassava and cassava-derived products, with a total value of $71.88 million. This marked a 2.8% increase in volume and a 9.8% increase in value compared to June 2023.
According to customs data from China, Vietnam is the second-largest supplier of cassava slices to China in the first four months of 2023. Vietnam's market share in cassava slice imports by China reached 12.55%, higher than the 10.71% recorded in the same period in 2022. Vietnam also holds the second-largest market share in supplying cassava starch to China, with a 36.11% market share, slightly lower than the 36.15% in the first four months of 2022.
In the domestic market, the price of fresh cassava roots in Tay Ninh province is currently 1,000-1,200 VND/kg higher than the same period last year. Tay Ninh province boasts 65 cassava starch processing plants, with a total capacity exceeding 4 million tons of cassava per year. Among them, 18 companies have processing capacities ranging from 50 to 300 tons of starch per day, and 47 facilities have capacities below 50 tons of starch per day. Currently, the primary export markets for cassava processing plants in the province are China (70%), the United States and Europe (8%), other Asian countries (10%), with the remaining portion being consumed domestically.
In general, during the first 7 months of 2023, despite a decrease in cassava exports, the export of cassava and cassava-derived products to certain markets continued to show strong growth in both volume and value compared to the same period in 2022. Notable markets in this regard include Malaysia, the Taiwan market, and Japan. However, it's worth noting that these markets represent a relatively small portion of Vietnam's total cassava and cassava product exports.
Cassava exports continue to present both opportunities and challenges.
According to experts in the cassava industry, the strong growth in Vietnam's cassava and cassava-derived product exports is driven by markets intensifying their purchases for use in livestock feed production. This trend has been particularly notable amid the global disruptions caused by the Russia-Ukraine conflict, which have disrupted global cereal supplies.
However, in the Chinese market, Vietnam's cassava and cassava starch face intense competition from counterparts in Thailand, Laos, and Cambodia. Furthermore, China's fluctuating import-export policies have had a significant impact on Vietnamese agricultural exporters, including the cassava sector.
Addressing the weaknesses of the cassava industry, the Vietnam Cassava Association points out that the consumption of Vietnamese cassava and cassava products involves several intermediaries, leading to low domestic competitiveness due to Vietnam's high logistics costs. Currently, Vietnamese cassava products face fierce competition in export markets from countries like Thailand, Cambodia, and Laos.
Additionally, most cassava starch processing technologies in Vietnam involve soaking the ground cassava in water, followed by multiple filtration steps. There are relatively few deep-processing facilities. Therefore, it is recommended that cassava processing plants invest in new technologies for cassava starch production, gradually phasing out traditional natural filtration methods in favor of centrifugal systems for starch extraction from cassava.
The cassava industry needs to open up to the European market.
Vietnam currently stands as the second-largest source of cassava product exports to China, accounting for nearly 90% of Vietnam's total cassava and cassava product export revenue in the first five months of 2023. This amounts to 171 thousand tons valued at $70.63 million, marking a 1.7% increase in volume and a 7.1% increase in value compared to April 2023.
However, in the Chinese market, Vietnamese cassava and cassava starch face intense competition from counterparts in Thailand, Laos, and Cambodia. Additionally, China's fluctuating import-export policies have had a significant impact on Vietnamese agricultural exporters, including the cassava sector.
According to experts, Vietnam's cassava and cassava product exports still heavily depend on the Chinese market, which carries inherent risks. In the current context, with the prices of various staple crops in Europe, especially wheat, on the rise, Vietnamese enterprises should seize the opportunity to open up the European market for cassava products.
"Some member enterprises of the Vietnam Cassava Association have already introduced their products to markets beyond China, such as Belarus, Russia, Japan, Taiwan, Indonesia, the Philippines, the Middle East, and Africa, by leveraging various Free Trade Agreements. Therefore, researching and improving the quality of cassava for export to markets with FTAs, particularly the potentially lucrative EU market, will help boost the export turnover of this industry" said Mr. Nghiem Minh Tien, the Deputy Permanent Chairman of the Vietnam Cassava Association.
In a world of changing agricultural dynamics and growing demand for sustainable food sources, cassava stands as a resilient and adaptable crop, offering solutions to many of the challenges facing global agriculture. While cassava exports have seen growth, particularly in markets like China, the industry faces competition from neighboring countries. The need to diversify export markets, especially in the European Union, presents an opportunity for the cassava sector to further expand and enhance its global presence.