Cassava prices continued to move upward into the second half of 2011, although the pace of increase was slower than in the previous year. Data from the Ministry of Commerce showed that the consumer price of cassava increased by 1.13% during the first half of 2011, rising from an average of Rp 2,988 per kilogram (kg) in January to Rp 3,022 per kg in June 2011.
The increase was also reflected at the farmer level. Rhomy Irawan, Second Secretary of the Cassava Farmers Association of Indonesia (Aspesindo), said that fresh cassava prices had risen significantly. The average maximum price increased from around Rp 600–650 per kg to Rp 900–1,100 per kg, although prices varied depending on the cassava variety and accessibility of the cassava plantation.
“The price of cassava has increased beyond our expectations. This might be because there has been an increase in demand. But we still need to observe whether the increase is only temporary because of speculators or whether it will remain stable,” Rhomy said by telephone on Tuesday (5/7).
Rising Demand Drives Cassava Prices Higher
I Suhayo Husen, head of the Cassava Indonesia Society (MSI), said the increase in cassava prices was driven by strong demand from both domestic industries and overseas markets.
One example was the demand from Indofood for semi-processed cassava used to produce chips. According to Husen, this demand alone reached approximately 200,000–300,000 tonnes per year.
The scale of this requirement is significant because producing 1 kg of cassava chips requires approximately 3.5 kg of fresh cassava. As demand for processed cassava products increases, the requirement for fresh cassava as a raw material also rises.
Processed Cassava Prices Also Increase
The increase in demand was not limited to fresh cassava. Husen also stated that the price of processed cassava increased from an average of Rp 1,500 per kg in January 2011 to Rp 2,000 per kg in June 2011.
Higher demand and better prices offered by food-processing industries created additional incentives for farmers to increase cassava production.
“People who did not previously plant cassava are now willing to plant cassava,” Husen said.
According to Husen, new cassava plantations had been established in several regions:
- East Kalimantan: approximately 600 hectares of new cassava fields.
- Central Sulawesi: approximately 600 hectares.
- Cianjur: approximately 3,000 hectares.
The expansion of cultivation areas indicated that higher cassava prices were beginning to influence farmers’ planting decisions.
Cassava Plantation Area Continues to Expand
Rhomy estimated that the total area devoted to cassava cultivation had increased by approximately 35% compared with the end of the previous year.
One of the factors behind this increase was weather conditions. According to Rhomy, some farmers switched from vegetable cultivation to cassava because of changing weather conditions.
Aspesindo was also pioneering cassava cultivation in Sukabumi. The initiative was expected to increase local cassava production by approximately 50%.
These developments demonstrate how changes in market prices can encourage farmers to expand cassava cultivation and increase the supply of raw materials for processing industries.
Improved Cassava Varieties Increase Production Potential
Expanding plantation areas was not the only strategy being pursued to increase cassava production. Farmers affiliated with MSI were also using improved cassava varieties, including Manggu and Darul Hidayah.
According to Husen, these varieties had a production potential of up to 100 tonnes per hectare, compared with approximately 20 tonnes per hectare for ordinary cassava planting material cited in the report.
The use of higher-yielding planting material, combined with an expansion of cultivation areas, was expected to increase Indonesia’s cassava production.
Husen estimated that national cassava production could reach approximately 25–26 million tonnes in 2011, representing an increase of around 10% compared with the 2010 production figure of 23.9 million tonnes.
Domestic Tapioca Industry Creates Strong Cassava Demand
Husen said that the business potential of cassava remained wide open because domestic processing industries continued to require large quantities of fresh cassava.
According to the figures cited in the report, the domestic industry required approximately 1 million tonnes of tapioca flour per year.
Producing 1 kg of tapioca starch requires approximately 3.5 kg of fresh cassava. This conversion requirement means that even a relatively large starch industry depends on a substantial and consistent supply of fresh cassava roots.
Demand for Modified Cassava Flour (MOCAF) was also reported at approximately 1 million tonnes per year.
Export Market Offers Additional Opportunities
In addition to domestic demand, the export market provided another opportunity for Indonesia’s cassava industry. China was identified as one of the important markets for cassava chips.
According to the report, a single cassava-processing factory supplying the Chinese market could require up to 4 million tonnes of cassava per year.
However, Indonesia was reportedly able to meet only around 5% of this demand, equivalent to approximately 200,000 tonnes of cassava chips.
The difference between potential demand and available supply illustrates the scale of the opportunity in the cassava export market. At the same time, it also highlights the need to improve production capacity and post-harvest processing infrastructure.
Why Fresh Cassava Alone May Not Be Enough
Despite the positive market outlook, Rhomy warned that fresh cassava prices could decline again if supply became abundant while demand failed to grow at the same pace.
He estimated that fresh cassava prices could potentially fall back to a maximum level of around Rp 700 per kg if production increased significantly.
This situation illustrates one of the challenges faced by cassava farmers. Increasing production can improve supply, but excessive dependence on fresh cassava sales can leave farmers vulnerable to price fluctuations.
Processing Is Important for Cassava Export Development
According to Rhomy, the export market generally requires cassava in processed form rather than simply as fresh roots.
Moving into processed cassava products could therefore provide greater opportunities for farmers and producer groups. However, processing requires investment in appropriate equipment.
Rhomy noted that a cassava cutting machine and dryer could cost hundreds of millions of rupiah for a single machine. Such investment could be difficult for individual farmers or small cooperatives to undertake.
“Demand for exports is for processed products, while obtaining a cassava cutting machine and dryer can cost hundreds of millions of rupiah for one machine alone. For cooperatives or combined farmer groups (Gapoktan), this is still somewhat difficult,” Rhomy said.
Cooperatives and Farmer Groups Could Strengthen Processing Capacity
The challenge of purchasing processing equipment highlights the potential role of cooperatives and farmer groups. By combining resources, farmers could potentially share processing facilities and improve their ability to supply processed cassava products.
A collective processing model could provide several potential advantages:
- Shared investment: the cost of machinery can be distributed among members.
- Higher processing capacity: larger quantities of cassava can be processed collectively.
- Better market access: farmer groups can potentially meet larger buyer requirements.
- Greater product value: processed cassava can provide alternatives to selling fresh roots alone.
- Improved supply consistency: collective production can help organize raw material supplies.
Balancing Cassava Supply and Demand
The development of Indonesia’s cassava industry depends on maintaining a balance between production and demand. Higher demand from the food, tapioca, MOCAF, and export industries can provide attractive opportunities for farmers.
However, rapid expansion of cassava cultivation without corresponding growth in processing capacity and market demand could eventually put downward pressure on fresh cassava prices.
For this reason, increasing production should ideally be accompanied by improvements in processing, storage, transportation, and market access.
Key Factors Shaping Indonesia’s Cassava Market
- Growing domestic demand from food and starch-processing industries.
- Increasing export opportunities, particularly for processed cassava products.
- Expansion of cassava cultivation in several regions.
- Adoption of higher-yielding varieties to increase productivity.
- Growth in tapioca and MOCAF demand.
- Limited processing infrastructure among small farmers and farmer groups.
- Potential price fluctuations when supply grows faster than demand.
Key Takeaways
- Cassava prices in Indonesia continued to rise during the first half of 2011, although the increase was slower than the previous year.
- The average consumer price increased from Rp 2,988 per kg in January to Rp 3,022 per kg in June 2011.
- Fresh cassava prices at the farmer level increased from approximately Rp 600–650 per kg to Rp 900–1,100 per kg.
- Strong domestic and international demand was identified as one of the main factors behind higher prices.
- Demand from food-processing industries encouraged more farmers to plant cassava.
- New cassava plantations were reported in East Kalimantan, Central Sulawesi, and Cianjur.
- The cassava cultivation area was estimated to have increased by approximately 35% from the end of the previous year.
- Improved varieties such as Manggu and Darul Hidayah were being promoted to increase productivity.
- National cassava production was projected at approximately 25–26 million tonnes in 2011.
- Domestic demand for tapioca flour was reported at approximately 1 million tonnes per year.
- Demand for MOCAF was also reported at approximately 1 million tonnes per year.
- China represented an important potential market for Indonesian cassava chips.
- Indonesia was reported to be supplying only a small portion of the potential export demand cited in the report.
- Processing equipment such as cassava cutters and dryers represented a significant investment challenge for small farmer groups.
- Greater processing capacity could help farmers move beyond selling fresh cassava alone.
Conclusion
The Indonesian cassava industry showed strong growth potential in 2011 as domestic and international demand pushed cassava prices higher. Rising demand from food-processing industries, tapioca manufacturers, MOCAF producers, and overseas buyers encouraged farmers to expand cultivation and consider higher-yielding cassava varieties.
However, increasing production alone would not guarantee long-term price stability or greater farmer income. If supply grows faster than demand, fresh cassava prices could fall again. This makes processing and market diversification increasingly important.
The opportunity is particularly significant in processed products such as tapioca flour and cassava chips. Developing local processing capacity could allow farmers and farmer groups to capture more value from cassava while improving their ability to meet the requirements of domestic and export buyers.
Investment in shared processing facilities, stronger farmer cooperatives, improved cultivation practices, and access to international markets could therefore become important elements in the future development of Indonesia’s cassava industry.
FAQ
Why were cassava prices increasing in Indonesia in 2011?
The article identified strong demand from domestic food-processing industries and overseas markets as important factors contributing to the increase in cassava prices.
How much did fresh cassava prices increase?
The average maximum price of fresh cassava increased from approximately Rp 600–650 per kg to around Rp 900–1,100 per kg, depending on the cassava variety and accessibility of the plantation.
How much cassava is needed to produce tapioca starch?
The article states that approximately 3.5 kg of fresh cassava is required to produce 1 kg of tapioca starch.
Why were more farmers planting cassava?
Higher cassava prices and strong demand from processing industries provided additional incentives for farmers to expand cassava cultivation.
Which cassava varieties were being used to increase production?
The article mentions Manggu and Darul Hidayah as improved cassava varieties being used by farmers affiliated with MSI.
How high was Indonesian cassava production expected to reach in 2011?
According to the article, cassava production was expected to reach approximately 25–26 million tonnes in 2011, compared with 23.9 million tonnes in 2010.
What was the potential export market for Indonesian cassava?
China was identified as an important market for cassava chips. The article stated that a single factory could require up to 4 million tonnes of cassava per year, while Indonesia was reported to supply only a small portion of the demand cited.
Why is cassava processing important?
Processing allows cassava to be converted into products such as tapioca flour and cassava chips, which can provide alternatives to selling fresh cassava and may open access to larger domestic and export markets.
What is the main challenge in developing cassava processing?
One major challenge mentioned in the article is the high investment required for equipment such as cassava cutting machines and dryers. This can be difficult for individual farmers, cooperatives, and farmer groups to finance.