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Cassava cultivation in Kerala has been hit due to price volatility and import of cassava starch from Vietnam and Thailand.
According to latest estimates, the area under the crop has dropped by 35 per cent in the last 10 years. However, an increase in productivity by 53 per cent has capped the decline in production to 6.05 per cent.
Meanwhile, the slashing of import duty of cassava starch from 70 per cent to 65 per cent in March is believed to have stimulated large scale import of tapioca starch from Thailand, Vietnam, etc.
This was instrumental in pulling down prices in 2011-12 season. The current import duty of 63 per cent from March this year has also fuelled a sentiment that the surge in imports would continue, a study carried out by Agricultural Market Intelligence Centre (AMIC)of the Kerala Agricultural University said.
K. Satheesh Babu, Principal Investigator of the study, said that the slow growth in the price coupled with instability was a major discouraging factor for tapioca cultivation in Kerala.
The growth in monthly State average farm price of tapioca was just 0.60 per cent between January 1999 and June 2011. Prices were subjected to a fluctuation of nearly 37 per cent during the same period.
He said that tapioca markets in Kerala are localised and decentralised due to its highly perishable nature. Prices are currently ruling in the range of Rs 6-8 a kg and Rs 12-15 a kg in wholesale and retail markets, respectively in various districts.
Based on the market sentiments and econometric analysis of wholesale tapioca prices, the AMIC is of the view that tapioca prices are likely to firm up in the short term on account of supply uncertainties.
A price range of Rs 8.60-9.75 is likely in the next three months, he said adding that quite a large section of tapioca farmers switched over to ‘nendran banana’.
Besides, truant monsoon during the main planting season of April and May and erratic rain in June coupled with price crisis have affected the planting.
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