No extension for cassava subsidy as demand rebounds

No extension for cassava subsidy as demand rebounds

The government will not extend the cassava subsidy for the 2012-13 season, as tapioca prices have recovered amid high demand for its use in alternative energy, especially in China.

The move is also aimed at preventing unscrupulous traders who have been found hoarding cassava to participate in the government's pledging scheme.

The ruling was reached yesterday by the Tapioca Policy Committee.

But Wiboonlasana Ruamraksa, director-general of the Internal Trade Department, said the government is uncertain about whether to continue the cassava scheme for in 2013-14.

The government allocated 44 billion baht to subsidise cassava root for the 2012-13 crop.

Under the pledging scheme, which ran 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 reached 2.70 baht at the end of the buying programme.

The purchasing goal is estimated at 10 million tonnes of cassava root, with 9.97 million tonnes of cassava root pledged out of total production of 24 million tonnes.

Cassava root is quoted at 2.70 to three baht per kg, tapioca chips at 7.10 baht per kg and starch at 14 baht per kg. The government describes the prices as high.

Ms Wiboonlasana said the prices of tapioca are expected to stay relatively high this year thanks to higher global demand for ethanol.

In a separate development, a panel supervising the rice pledging scheme chaired by Vatchari Vimooktayon, the commerce permanent secretary, reported the scheme bought 2.7 million tonnes of paddy for the 2012-13 second crop out of a target of 7 million tonnes.

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