Despite an influx of millions of tonnes of tapioca products during the harvest season at the year-end, the price of Thai tapioca products is unlikely to drop as demand still outpaces supply, says Keerati Rushchano, deputy director-general of the Foreign Trade Department.
He said the amount of cassava supply, a raw material for Thai export-grade tapioca products, was expected to fall below demand, which was expected to remain strong, particularly in the feedstuff industry.
"The price of tapioca products in 2018 is expected to be higher than 2017 because global demand is expected to remain strong while supply in Thailand is falling," said Mr Keerati.
He said the average price of tapioca products is expected to be 2.5 baht per kilogramme in 2018, slightly higher than the average of two baht per kg this year.
The major reason the Thai tapioca supply dropped was unfavourable weather, leaving production at around 28 million tonnes for this harvest season, down from 30 million tonnes the previous year, said Mr Keerati.
Excessive rainfall disrupted cassava harvesting and lowered output, but strong demand kept the price of Thai tapioca products at a relatively high 2.25 baht per kg and it is expected to rise further, he said.
"A firm tapioca price has us feeling relieved because the government would not issue any price support schemes this season," said Mr Keerati.
However, he said the Commerce Ministry has kept commodity logistics along the borders under surveillance to prevent smuggling of tapioca products and cassava from neighbouring countries, causing an oversupply that could weigh down the domestic price.
Thailand's cassava price is somewhat higher that that of neighbouring countries, potentially interesting some smugglers, said Mr Keerati.
The Commerce Ministry plans to hold the World Tapioca Trade Show next year to showcase the production potential of Thailand, the world's biggest exporter of tapioca products. The trade show is expected to gather tapioca industry leaders to meet for business-matching events and ignite a discussion about supply chain among producers and users, helping to secure demand for Thai tapioca products and supporting prices.
In the first 11 months this year, Thailand shipped 10 million tonnes of tapioca products, up 1% from the previous year in terms of volume, while the export value was worth US$2.5 billion, down by 6.1%. Thailand is forecast to export 10-11 million tonnes of tapioca products in 2018, said Mr Keerati.