Bangkok (VNA) – Thailand's tapioca exports face tough times ahead due to China - its largest customer switch from tapioca chips to coal as the raw material to produce ethanol.
Chumphol Kajohnchalearmsak, President of the Thai Tapioca Starch Association, has said that China has started testing its ethanol manufacturing facility in Shaanxi province.
Once the factory is fully operational, it will produce 500,000 tonnes of ethanol per year by using coal which is cheaper than tapioca chips.
Chumphol said that the factory will be the world’s largest producer of ethanol from coal, and will further reduce the demand for imported tapioca, as well as similar agricultural products such as corn and sugarcane from Thailand.
According to the association, last year Thailand exported tapioca products worth 127 billion THB (3.49 billion USD), with the exports to China accounting for 63% of the total exports.
However, due to the high production cost in Thailand, the price of exported tapioca chips has now risen to 238 USD per tonne, forcing several buyers to postpone placing their orders.
Chumphol said that in the first half of this year, the demand from China has dropped by about 50% year on year due to the fluctuations in the value of the baht and the high output of genetically modified organism (GMO) corns in China, which could substitute tapioca chips in ethanol production.
He called on the Thai government to adopt measures to support tapioca exporters either in bringing the cost down or increasing tapioca output to boost competitiveness in the export markets./.
