W11 Cassava Update: Brazil's Accelerated Harvest and Laos' Trade Imbalance Amidst Inflationary Pressures

Published 2024년 3월 25일

In W11 in the cassava landscape, the rapid pace of cassava harvest in Brazil, driven by favorable conditions and increased harvesting efforts, has led to a significant decline in cassava prices for the third consecutive week. With ample harvestable areas and low yield expectations among producers, the supply surge has pushed down the average root prices, standing at USD 83.30/mt in nominal terms, reflecting a 1.4% WoW decrease. In real terms, considering inflation, cassava prices have dropped by 56.4% YoY, signaling notable deflation in the market. Meanwhile, strong cassava exports in Laos have positioned it as the leading export product in Jan-24, totaling USD 94 million. However, despite the robust export performance, Laos faces a trade deficit exceeding USD 188 million in Jan-24, with inflation rates posing significant economic challenges, reaching 25.35% in Feb-24.

Cassava Harvest Accelerates, Driving Down Prices in Brazil

Data from Brazil’s Center for Advanced Studies on Applied Economics (Cepea) indicated a rapid advancement in the Brazilian cassava harvest across most regions of the country during W11 of 2024. Despite experiencing hot and dry weather, the high availability of harvestable areas combined with low producer expectations regarding yield have incentivized the intensification of harvesting activities. The supply surge has resulted in a decline in average root prices for the third consecutive week.

The average nominal price of starchy cassava stood at USD 83.30 per metric ton (mt), reflecting a 1.4% week-over-week (WoW) decrease compared to W10. In real terms, considering inflation as measured by the General Price Index - Domestic Availability Index (IGP-DI), the price of cassava has declined by 56.4% YoY compared to the same period in 2023, indicating significant deflation in the cassava market. The accelerated harvest pace and increased supply could continue exerting downward pressure on cassava prices shortly.

Laos Navigates Trade Imbalance with Strong Cassava Exports Amidst Inflationary Pressures

Official Laotian government reports revealed key trends in the country's trade performance during Jan-24. Cassava emerged as the leading export product in Jan-24, with a total value of USD 94 million. Despite strong cassava exports, Laos recorded a trade deficit exceeding USD 188 million on Jan-24. Export values reached USD 561 million, while imports reached USD 749 million. China remained the primary export destination for Lao goods (USD 198 million), followed by Thailand (USD 134 million) and Vietnam (USD 129 million).

Despite the positive export performance, Laos is grappling with significant inflation. Feb-24’s inflation rate reached 25.35% — exceeding Jan-24's 24.44% — which poses significant challenges to the country's economic stability.