Tapioca pledging draws middling interest

The government's tapioca pledging scheme has drawn only lukewarm interest from farmers, as the ongoing drought that threatens lower production this year has led buyers to offer better prices.

Commerce Minister Boonsong Teriyapirom said the scheme has attracted 2.5 million tonnes of fresh cassava root.

Under the new pledging scheme, which runs from Oct 1, 2012 to March 31, 2013, the state initially paid 2.50 baht a kilogramme for cassava root, raising the amount by five satang each month until it reaches 2.75 baht per kg in March.

The government set aside 44 billion baht to subsidise cassava root for the 2012-13 crop, which is expected to produce 27.5 million tonnes.

The state pledged 10 million tonnes of cassava root out of a total production of 24 million tonnes in the previous season, with 27 billion baht paid.

Mr Boonsong said the price of fresh cassava root with 25% flour content is now offered at 2.10-2.30 baht per kg in the Northeast, with that of 28-30% flour content quoted at 2.70-2.85 baht.

Given the relatively low participation by farmers, Mr Boonsong said the Tapioca Policy Committee late Thursday decided to cut the buying budget for this crop to 30.48 billion baht.

The purchasing goal is estimated at 10 million tonnes of cassava root.

The meeting also approved the sale of 400,000 tonnes bought under the state pledging scheme to six ethanol factories in Lop Buri, Khon Kaen, Sa Kaeo, Prachin Buri, Ubon Ratchathani, and Chon Buri.

The transaction, brokered by the Energy Ministry, is worth 4.24 billion baht. The shipment is due for delivery by March 31.

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Writer: Phusadee Arunmas
Position: Business Reporter