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What are current buyer-engagement issues?

TH flag
Market Penetration Strategy
Jul 27, 2022
Edited By
Seujin Jang
Jul 27, 2022
Edited By
Seujin Jang
The current buyer-engagement issues for the Thai cassava starch market are, pre-harvest spot contract, substitute products, competitions and bargaining power.

- Pre-harvest spot contract: Most of the transactions with China, except for tenders, are spot purchases. Most contracts last at most three months.

-Substitute Products: Maize has the same applications in almost all the industries that use Cassava feedstock, such as biofuel, food manufacturer, feeds, etc., and China produces this locally. When prices of maize in China drop, the import volume for cassava starch also drops significantly.

-Competitions: Vietnam, although less preferred by Chinese importers, have a pricing and proximity advantage over Thailand, which is a major threat right now as shipping container shortages continue to delay transactions (Chinese buyers use Thai pricing as standard and impose 10~20% lower prices for Vietnamese suppliers)

-Bargaining Power: Because of the structure of the Thai cassava starch market, especially its value chain (high reliance on export), Thai suppliers lack bargaining power and are highly exposed to risks coming from any policy changes with the destination countries.

-According to the General Administration of Customs of the People's Republic of China: GACC issued Notification No. 248, dated April 12, 2021, regarding the registration and management of imported food producers from abroad to the People's Republic of China. This requires that entrepreneurs wishing to export all kinds of food products to China register with the GACC, effective from January 1, 2022.

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