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Challenges for cassava chain in Brazil

Cassava is an important product in the Brazilian agribusiness. Besides being the food basis for most part of population, the root vegetable is raw material for the agroindustry, and different types of flour produced in Brazil are income sources for many families. Starch and modified starch are used in several segments, from food to those with technology involved, such as chemical, steel and oil industries. In spite of these positive characteristics, there are bottlenecks in the entire cassava chain and surpassing them is a challenge.


Data from the Food and Agriculture Organization report that, until 2011, Brazil was the second biggest cassava producer, with 25.3 million tons. For 2017, FAO indicates a decrease in the Brazilian production, at 20.1 million tons, which would lead the country to be the fourth greatest producer in the world, surpassed by Nigeria, Thailand and Indonesia.


FAO also says that, between 1997 and 2016, the average yield upped 0.7% per year in Brazil, while in Thailand (major global producer and exporter of cassava starch), the annual increase was 2.1%. The Brazilian cassava production over the last 20 years moved up only 0.5% per year, and in Thailand, 4%. Changes in that country were a result of solid investments in public and private research, especially to develop varieties adapted to weather and soil conditions in Thailand.


Therefore, one of the greatest challenges in Brazil is to increase the yield, which is still different among regions, mainly when North/Northeast states are compared with those in the Central-South. As a result, the development of new varieties is essential, and it happens only through investments in research and development.


Companies such as Brazilian Agricultural Research Corporation (Embrapa), Agronomic Institute of Campinas (IAC) and Paraná Agronomic Institute (Iapar) have already performed some activities in this matter. Likewise, private companies are also making advances. For instance, Abam (Brazilian Association of Cassava Starch Producers) has invested on reducing costs, mainly for harvesting, aiming mechanization.


Depending on the market and considering the lack of barriers to entry, the cassava area varies throughout the years, causing significant oscillations in both production and prices. Cepea data indicate that the average cassava value last year surpassed in 48.9% the price in 2016 and in 191% that in 2015, in real terms (values were deflated by IGP-DI). This behavior of quotes may lead to competitiveness loss of byproducts compared to substitutes for starch. The improvement of the chain coordination might mitigate this problem.


STARCH – Even with recent decreases in cassava production, Brazil is still among the biggest world producers; however, the starch production is low, mainly when compared to Asian countries, which are the greatest exporters. In 2016, in Thailand, 3.2 million tons of cassava starch were produced; meanwhile, in Brazil, the total was 616.2 thousand tons, according to the most recent Cepea survey.


The census of the Brazilian starch industry, elaborated by Cepea, shows that, with the installed capacity, this industry would reach the maximum production of 1.5 million tons, indicating that it has a significant idleness. This aspect reinforces the competitiveness loss compared to substitute starch, mainly corn that has been used in major industrial segments, namely paper, chemical and modified starch industries.


It is certain that the upcoming years will have major challenges for the entire chain, mobilizing all players involved in the search for solutions, which gradually have been found. However, results may occur in the long-term and will certainly keep the sector in the spot in the Brazilian agribusiness scenario.

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