Brazil: No supply, cassava price rises and returns to October 2020 levels

Published Oct 11, 2021

Tridge summary

Cassava root prices in Brazil are experiencing a surge due to a predicted decrease in harvest area and productivity, leading to a projected production drop by 1.8% from 2020 to 2021. This situation is further exacerbated by recent droughts in Paraná, causing supply disruptions, and ongoing rainfall, which threatens to delay harvesting. In response, producers are reducing supply in anticipation of higher prices, a move supported by industries due to rising production costs. There is consensus among stakeholders, including the Cassava Industries Union of Paraná (SIMP) and the Brazilian Association of Cassava Starch Producers (ABAM), on the need to increase the value of cassava starch and flour to offset the expected rise in raw material costs, aiming to prevent undue burden on producers.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

The lower availability of cassava root this year and uncertainties about the area and volume continue to support the prices of raw material and derivatives as well. CEPEA data show that the current values of the root operate at the highest nominal levels since October 2020. In real terms, the quotations are the highest since November 2020. For this year, the Brazilian Institute of Geography and Statistics (IBGE) estimates that the area to be harvested with cassava in the country will fall by 2.6%, to 1.23 million hectares. The average Brazilian productivity for 2021 should be 15 tons/hectare, 0.8% higher than last year. Thus, the production of cassava would add up to 18.6 million tons, 1.8% below that of 2020. PARANÁ – In Paraná, last week's rains, which persisted for several days, did not guarantee the supply of root, which was paralyzed, until then, due to the drought. In addition to the rains, it also contributed to keep the market firm with a slight increase last week, the ...

Source: Abam