A dramatic drop in the price of cassava this year has forced farmers and middlemen to drop out of the business and seek aid from the government and stakeholders, farmers and brokers said. Government officials contested the farmers’ claim, however, blaming the price drop on poor storage techniques.
Sarun chanthou, a cassava broker in Banteay Meanchey province, told Khmer Times that he has stopped purchasing cassava this year because it has ceased to bring in a profit. In 2014, he said, he would receive between 800 and 900 riel per kilogram of dry cassava, but now he makes roughly half as much.
Despite the drop in cassava prices, the cost of logistics and labor have remained high. As a result, Mr. Chanthou has temporarily dropped out of the cassava business. “I used to purchase between 10 and 15 tons of cassava day,” he said, “but now I’ve stopped purchasing since I cannot make any money from the business.”
Another cassava broker in Banteay Meanchey, Sorn Yin, said that the instability of cassava prices has hurt his business, especially since labor costs have remained high. Mr. Yin used to purchase roughly 55 tons of cassava a day for export to Thailand, but with the price drop he said he has stopped making purchases.
“The price of cassava is down dramatically – we cannot manage the price on the market – therefore we are waiting for the price to stabilize and then we will resume purchasing,” Mr. Yin said. Fresh cassava is down to roughly 150 riel per kilo, he added.
As they struggle to pay bills and repay loans, some farmers have asked for help from the government. Khann Samban, the director of the Department of Industrial Crops in the Ministry of Agriculture, told Khmer Times that the ministry is trying to find a market for the farmers.
The Ministry has signed a memorandum of understanding (MoU) with China and South Korea to boost the demand for Cambodian cassava, in an effort to help local farmers. “We can’t determine the price, since Cambodia is a free market, but we can encourage people to keep their cassava dry and well-stored after it is harvested, instead of dumping it on the market” he said.
But the outlook is not entirely grim for the country’s cassava industry. High-profile businessman Try Pheap, owner of Try Pheap Import Export Group (TPG), is urging farmers to increase, not decrease, production in order to supply cassava for his new joint venture with a Thai ethanol firm called Ubon Biro Ethanol. Under the deal, the cassava would be purchased by the Thai company and sent to a refinery to be converted to ethanol.
Despite the drop in prices, in some provinces cassava continues to be a staple crop. Chhim Veachra, director of agriculture in Battambang, said that roughly 110,000 hectares of the province is used for cassava cultivation, creating about four million tons a year.
He said the drop in prices is more modest than the farmers and brokers claim – just a 40 riel drop. He said the lower prices some farmers are being offered may be due to their harvesting the crops too early, resulting in lower-quality product.
“We cannot say that [the price] is dramatically down, as the farmers have claimed,” he said. He blamed the low price instead on poor preparation and storage techniques, and said the ministry provides technical expertise to help cassava farmers protect their crops from insects. . “They must dry and store their cassava properly,” he said.