Three tapioca associations are helping farmers to shore up tapioca prices as they promise not to cut prices and threaten to expel members who violate the agreement.
The price decrease, which does not correspond with the current world price, prompted the Foreign Trade Department to ask the three associations for help by not cutting export prices, according to department chief Keerati Rushchano.
The associations are the Thai Tapioca Trade Association, the Thai Tapioca Products Factory Association and the North Eastern Tapioca Trade Association.
"Some exporters cut the price to export tapioca chips to China where demand for raw materials for alcohol manufacturing has risen. This doesn't reflect the reasonable price," said Mr Keerati.
The Commerce Ministry announced the price of fresh cassava roots should not be less than 2.40 baht per kilogramme.
"The exporters quoted a lower export price because they didn't know of the rising demand in China," said Boonchai Srichaiyongpachai, president of the Thai Tapioca Trade Association.
Recently, tapioca chips were US$260-270 per tonne free on board (FOB), but Thai exporters sold them at $240 per tonne.
The alcohol price in China also increased to 7,100 from 5,600 yuan a tonne said Mr Boonchai.
He said the three associations started buying fresh tapioca at 2.40 baht from Jan 18 in line with with FOB price at $250 a tonne.
Next week, the tapioca price will continue to rise to 2.45 baht a kilogramme and will be 2.50 baht in two weeks, he said.
The cassava root price is expected to rise to 3 baht this year as a result of higher demand for tapioca chips in China and Thailand for alcohol production.
Thailand's overall tapioca output in the 2020-21 crop year is expected to be 28 million tonnes while demand will be 40 million tonnes this year. The country needs to import 9-10 million tonnes a year from neighbouring countries.
Mr Keerati said if any members of the three associations do not cooperate and continue to cut the price, the associations will consider punishing them by revoking their membership status.
The Foreign Trade department and Internal Trade department will also strictly enforce laws to supervise import, export and transportation of tapioca to stabilise its domestic prices.