The Thai tapioca industry remains promising, but concern is mounting about a possible short supply of cassava roots caused by volatile weather and smaller plantation areas.
Thai tapioca shipments will likely remain in good shape and the country will retain its title as the world's largest tapioca exporter, said Preecha Temprom, president of the Thai Tapioca Starch Association.
Thailand's tapioca shipments are expected to fetch 90 billion baht this year, up from 80 billion in 2012.
Of the total, tapioca flour will account for 50-55 billion baht, while the rest will be in chip and pellet forms.
Tapioca flour shipments are forecast at 3.5 million tonnes in 2013, up from 3.2 million tonnes last year.
Exports of tapioca chip and tapioca pellet will likely stay unchanged at 4 million tonnes.
"Tapioca chip is now quoted at US$240 a tonne, relatively higher than $210 a tonne last year," said Mr Preecha. "We therefore believe there will not be an oversupply and the government will no longer need to subsidise the prices like it did last year."
Cassava roots are now sold at 3 to 3.10 baht per kilogramme, much higher than the government's pledging price.
The Tapioca Policy Committee last month decided to scrap the cassava subsidy for the 2012-13 season, as tapioca prices recovered amid high demand in the alternative energy sector, especially in China.
The move is also supposed to be a lesson for unscrupulous traders who have been hoarding cassava to sell to the government's pledging scheme.
Under the programme, which ran from Oct 1, 2012 to March 31, 2013, the government initially paid 2.50 baht per kg for cassava root before raising the price by five satang each month until it reached 2.70 baht at the end of the programme.
Mr Preecha said demand for tapioca flour grows by 10-15% every year, with the global demand estimated at about 5 million tonnes.
Suree Yodprachong, president of the Thai Tapioca Trade Association, said the association is increasingly concerned about production in the October-December season due to volatile weather and the spread of red mites and pink cassava mealybugs.
He said the production is now affected by smaller plantation areas, as several farmers particularly in the Northeast have shifted to growing rubber.
In a related development, the World Tapioca Conference & Thailand Tapioca Exhibition 2013 will take place at the Suranaree University of Technology in Nakhon Ratchasima from June 20-23.