Cassava processing by the starch industry fell 41.7% in the first half of 2017 (786.2 thousand tons) compared to the same period last year, according to data from Cepea (Center for Advanced Studies in Applied Economics), Esalq/ USP. As a consequence, starch production fell by 41% in the same period of comparison. Unlike previous years, there is less availability of crops for harvest, which are concentrated with few producers, resulting in a shorter harvest, with cassava prices at high levels.
The average root price in this first half of the year was R$ 502.75/t (R$ 0.8743/gram of starch), an increase of 72% compared to the average price for the same period last year, in real terms. (deflation by the IGP-DI of June 2017).
According to data from IBGE (Brazilian Institute of Geography and Statistics), this year, the area to be harvested with cassava in Brazil should be 1.36 million hectares, 7.1% below that recorded in the last harvest. As for productivity, it could fall by 6.3% in 2017, with an estimate of 14.7 tons per hectare. Thus, the production indicated by IBGE for this year is 20 million tons, a drop of 13% in relation to the total produced in 2016 and the lowest volume produced since the 1960s.
Also according to IBGE, industrial production fell in the first half of this year, despite registering a slight recovery in May. This scenario resulted in lower demand from industrial segments, such as food products, beverages, textiles and cellulose, and paper and cardboard products. Furthermore, Operation Carne Fraca, launched by the federal police in March, led to a decrease in the consumption of starch by slaughterhouses. Cepea calculations indicate that, in the first half of this year, apparent consumption of starch was 260.2 thousand tons, a decrease of 24% compared to the first half of last year.
In this scenario of weakened demand, industries had difficulties in passing on the increases to the product. Despite this, the average value of starch in the first half of the year was R$ 2,663.85/t (R$ 66.60/25 kg bag), an increase of 42% compared to the average for the first six months of 2016, also in real values.
With cassava prices higher than starch prices, the industrial margin fell, causing industries to reduce their installed capacity, especially those that had built up stocks at the beginning of last year. Therefore, the volume of concentrated stocks with few units has been decreasing in recent weeks.
Despite the high prices of cassava, producers remain reticent about their intention to plant this year, as some have renegotiated part of their 2015 debts. For others, however, the still high production costs are a concern, mainly due to leases and manual labor. of work.
Source: Agrolink
