Tapioca prices are expected to rise thanks to widespread drought, which cut production in certain areas in the country by 30%, with lower production in neighbouring countries also anticipated because of the drought and the cassava mosaic disease.
Keerati Rushchano, director-general of the Foreign Trade Department, said authorities have been monitoring tapioca prices and found they rose gradually because of widespread drought.
Domestic demand also increased thanks to the government's policy promoting gasohol E20. E20 is 20% ethanol blended with 80% unleaded petrol.
Boonchai Srichaiyongpanich, president of the Thai Tapioca Trade Association, said the widespread drought is expected to cut tapioca production in the 2020/2021 crop year by 10-20%.
Normally Thailand's tapioca production stands at about 30 million tonnes, with demand amounting to 40 million tonnes a year.
Last year, Thailand saw tapioca product exports drop both in value and volume, with the value down by 16.4% to US$2.6 billion and volume down 20.4% to 6.6 million tonnes.
China is the biggest export market followed by Indonesia, Taiwan and Japan.
"We predict a shortage in supply this year as a result of widespread drought and fewer high-quality varieties," said Mr Boonchai.
He said the association expects tapioca exports to drop by 30% this year or about 30 billion baht from 100 billion baht last year, adding that the drop may hit 50 billion baht or 50% if there is no rainfall over the next two months.
The price of fresh cassava root with 25% starch is now quoted at 2.15-2.35 baht per kilogramme, lower than state price guarantee of 2.50 baht per kg.
The cabinet on Nov 12 approved 9.6 billion baht for the tapioca price guarantee scheme for the 2019-20 harvest season.
The price guarantee is set at 2.50 baht per kg, limited to 100 tonnes per family.