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What are current buyer-engagement issues?

TH flag
Issues & Entry barriers
Oct 18, 2021
Edited By
Seujin Jang
Oct 18, 2021
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: Majority of the transaction with China with the exception of tenders are spot purchases. Most contract last at most 3 months.

-Substitute Products: Maize has the same applications in almost all the industries that uses Cassava feedstock such as biofuel, food manufacturer, feeds etc, and China produce this locally. When prices of maize in China drops, 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 highly exposed to risks coming from any policy changes with the destination countries.

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