The government may not need to subsidise cassava in the 2013-14 season, as tapioca prices have recovered amid high demand for its use in alternative energy, especially in China.
Workers load cassava in Nakhon Ratchasima. The Commerce Ministry said that as of Feb 26 the government had pledged 5.41 million tonnes of fresh cassava root for the 2012-13 crop, while the Bank for Agriculture and Agricultural Cooperatives has paid farmers 7.61 billion baht. PRASIT TUNGPRASERT
Preecha Temprom, president of the Thai Tapioca Starch Association (TTSA), said the domestic tapioca price will likely reach three baht a kilogramme thanks to higher global demand for ethanol and the government's price intervention.
TTSA figures show as of Wednesday, casava root was quoted at 2.40 to 2.80 baht per kg, tapioca chips at 6.65 to 6.75 baht per kg and starch at 13 to 13.20 baht per kg.
The government has allocated 44 billion baht to subsidise cassava root for the 2012-2013 crop.
Under the new pledging scheme, which runs from Oct 1, 2012 to March 31, 2013, the state initially paid 2.50 baht per kg for cassava root, raising the amount by five satang each month until it reached 2.75 baht this month.
The purchasing goal is estimated at 15 million tonnes of cassava root for this season.
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.
Deputy government spokesman Pakdiharn Himathongkham said the cabinet has approved a proposal to cut the buying budget for this crop to 30.5 billion baht from 45 billion, with the pledged volume of cassava down to 10 million tonnes from 15 million tonnes.
The government's tapioca pledging scheme has drawn relatively lukewarm interest from farmers, as the drought that threatens to lower production this year has led buyers to offer better prices.
The Commerce Ministry said that as of Feb 26, the government had pledged 5.41 million tonnes of fresh cassava root for the 2012-13 crop, while the Bank for Agriculture and Agricultural Cooperatives has paid farmers 7.61 billion baht.
The Agriculture Ministry projects domestic production of cassava for the 2012-13 crop at 27.6 million tonnes against 26.6 million tonnes in the previous season.
A ministry report said the government's tapioca stocks bought under the government's rice pledging scheme for the 2011-12 crop amounted to about 1.63 million tonnes _ 1.32 million tonnes of tapioca chips and 312,636 tonnes of tapioca starch.