Cassava exports rebound, but still vulnerable Vietnam’s cassava exports recovered in 2014 and surpassed the US$1 billion mark, however the industry continues to face challenges with sustainability and is not out of the woods yet, according to the Ministry of Agriculture and Rural Development (MARD). For calendar year 2014 MARD reported exports were up 5.4% on-year in volume and 2.6% in value to 3.29 million tonnes at US$1.3 billion. China topped the import markets accounting for 84.65% of market share, which were up 18% on-year. Exports to markets across the board excluding the Republic of Korea (RoK) and Taiwan, enjoyed growth. Unstable consumption market In the first half of last year, MARD said exports of cassava dipped 24% against the prior year while its stockpiles increased twofold on the back of stiff price competition from Thailand and the dispute between Vietnam and China in the East Sea. In addition, the RoK– the second largest importer – limited imports as its government called on producers to use potatoes to replace cassava to protect domestic production. In the second half of last year, consumption markets began notching upwards and by the end of October most cassava producers had cleared their stockpiles. In the fourth quarter prices began moving up and pushed to US$252 per tonne at the Saigon Port and to US$247 per tonne at the Quy Nhon port, up on average around US$20 per tonne over the prior year.    According to the MARD’s Plantation Department, cassava cultivation areas reached 548,800ha in 2014, yielding more than 10 million tonnes. Cultivation areas doubled and productivity increased over twofold from 15.35 tonnes per ha in 2005 to 18.5 tonnes per ha in 2014. Accelerating cassava processing Cassava development in localities remained plagued with obstacles such as overproduction, low productivity, undiversified products, unstable consumption markets and loose coordination between producers and processors. Deputy Head of the Plantation Department Tran Xuan Dinh said the cassava industry's development remained unsustainable for 2014 adding that it is necessary now to make timely and proper adjustments. The department plans to reduce cultivation areas to 500,000ha over the next two years and to 450,000ha by 2020 to maintain production at a capacity of roughly 11 million tonnes. President of the Vietnam Cassava Association (VCA) Nguyen Van Lang in turn said cassava products are mainly exported to China at wildly fluctuating prices. Currently, the export market faces difficulties as China has placed limits on imports. He added that China, the largest export market of Vietnamese cassava, has also closed 70 per cent of its ethanol-producing factories as China's ethanol industry continued to stagnate, reducing cassava imports. Over the next five years, demand for material cassava to process and produce ethanol has been forecast to increase by 50%, opening up a huge window of opportunity for the cassava sector. In order to sustainably develop businesses need to pay more attention to finding ancillary outlet markets in order to avoid overdependence on China as currently is the situation, Lang stressed. For his part, VCA Secretary General Pham Vu Ha said over the past 20 years, the cassava sector has concentrated solely on producing starch to the detriment of technology, quality and trademark development. As a consequence the market has been much weaker than in neighbouring Thailand. It is high time for producers to diversify their products and produce higher added value and alternative products such as ethanol and food, Ha underscored, which would benefit the sector in the long run. A gradual reduction of exports of raw products would be replaced by increased domestic demand at higher and more stable prices, Ha said. He added that to stimulate production and consumption of bio-fuel E5 that is made from cassava; the State should consider building support policies for producers, distributors and consumers. VOV