Cassava/CEPEA: Supply Scarcity Drives Root Price Appreciation
Cassava root prices have risen for the third consecutive week, according to CEPEA research. This upward trend is primarily driven by increased industrial processing demand amidst restricted supply. Dry, hot weather and producers withholding higher-quality crops in anticipation of better prices have contributed to the market scarcity. Higher production costs are expected to keep producers seeking improved profitability in the coming months.
According to research conducted by CEPEA (Center for Advanced Studies on Applied Economics), cassava root prices have shown an upward trend for the third consecutive week. This price appreciation is primarily influenced by increased industrial processing demand at a time when market supply is restricted.
The scarcity in supply stems from several factors. Firstly, persistent dry and high-temperature weather conditions have adversely affected cassava crop growth. Secondly, many producers are opting to store their higher-quality harvests, anticipating further price increases before selling, a strategy that exacerbates the tight supply situation.
CEPEA highlights that producers emphasize profitability will remain a determining factor for the commercialization of cassava roots in the coming months. This is especially true for crops cultivated in 2024, which incurred higher production costs due to increased land lease expenses and labor costs for harvesting. Consequently, producers will be more inclined to seek higher selling prices to offset their elevated inputs.