Tapioca starch prices reach record levels
Thailand supplies around 80 per cent of the tapioca to the world market, and its price always sets the benchmark. After identifying the supply squeeze as a result of the weather and pest problem, National Starch Food Innovation increased its tapioca starch prices in February by between 8 and 12 per cent.
Since then, however, the FOB export price of tapioca has soared even further, from US$410 per metric tonne at the end of February to a high of $630 by mid August.
Luc Bertram, European sales director at NSFI told FoodNavigator.com that tapioca has never reached such highs before. “It’s a market issue,” he said. “It leaves the [food ingredients] industry no choice but to raise prices”.
Bertram confirmed that NSFI will be increasing its prices again when it is contractually able to do so, though it is honouring any prices it is already signed into for the duration of agreements.
He added that it is “very very difficult” to predict how supply will fare in the future, but close monitoring will continue.
The indications at present are that this year’s cassava production will be down 20-21 million tonnes – 30 per cent lower than last year.
While some manufacturers may be temped to switch from tapioca starch to maize or potato starch, there are considerable technical challenges and it may result in a compromise over quality.
“Tapioca has different functionality and viscosity,” Bertram said. “It is not a straightforward switch”.
Replicating that functionality using different ingredients would be hard, he said.
Hold the R&D
It is not only international ingredient suppliers who look to be affected. Thailand-based Chaodee Starch Co is considering holding off on a planned investment of 200m baht to produce maltodextrin from cassava for food and medicinal products, according to the Bangkok Post.
The maltodextrin project had received support from Thailand’s Industrial Technology Assistance Programme (iTAP), with technical support secured from Suranaree University of Technology. The plan was to produce about 50 litres of maltodextrin a day, the newspaper reports.