Vaivém: Cassava price soars with reduction in planted area

One more product enters the list of staple foods that have sharply increased prices this year and begin to weigh on the pockets of consumers with lower purchasing power in a period of tight incomes and high inflation: cassava.

The ton of the root, this month, is 85% higher than in October 2021. Discounting inflation, the real increase is 74% in the period, according to Cepea (Center for Advanced Studies in Applied Economics).

Fábio Isaias Felipe, a researcher at Cepea, says that these prices, little by little, will reach consumers. In September, according to data from the Esalq/Fealq basic food basket, the increase in manioc flour was already 11%, compared to August’s values.

A good part of this price acceleration is due to the continuous reduction of the planted area, which is already happening with other basic foods, such as rice and beans.

These foods lose space for crops with better external demand and profitability. These are the cases of soy and corn.

In research by Fipe (Fundação Instituto de Pesquisas Econômicas), in view of this loss of internal area for some products and greater external demand for others, cassava flour has already accumulated a 32% increase for consumers in São Paulo in the last 12 months. .

In the same period, the consumer also receives the high pressure of 49% of corn flour; 67% of cornmeal; and 19% of beans.

Rice, after an increase of 77% in supermarkets in 2020, has been falling and has fallen by 3% in the last 12 months. The international scenario for this cereal, however, is not good.

The USDA (United States Department of Agriculture) projects a reduction in production and an increase in consumption worldwide. Major producers, consumers and exporters such as India, Thailand, Pakistan and China have smaller harvests or stocks in 2022/23.

Felipe believes that the rise in prices is associated with the current reduction in cultivated area and the loss of competitiveness of cassava. IBGE data show that, in 2021, the area sown with cassava was 34% lower than in 2010. In the same period, that of beans dropped by 30%, and that of rice, by 42%.

Soybean cultivation increased 76%, and corn, 64%. These crops occupied part of the areas left by cassava, rice and beans.

Carlos Estevão Leite Cardoso, a researcher at Embrapa Cassava and Fruits, says that this price acceleration needs to be looked at from a cyclical point of view.

The entry and exit of producers in this sector is easy, and many take advantage of the moment of high prices to make money. When supply increases, and prices fall, they leave.

In this period of the year, in addition to being a high seasonal phase for the product, there is a combination of a series of factors that caused the drop in supply and raised prices, according to the Embrapa researcher.

Among the main reasons, he cites the attractive prices of grains; the high of the arroba of the ox; climatic conditions harmful to crops, which affected productivity; and the exit of the opportunistic producer from the activity, when prices were low.

The combination of these factors could lead to higher prices for cassava and its derivatives beyond this year, continuing into 2023.

Cardoso also says that one of the main problems in the sector is the lack of governance. For him, it is necessary to expand market information, especially when referring to prices, planted area and production. And this information has to cover the entire Brazilian market.

Not only the consumer suffers from these sudden changes in values ​​but a wide chain of the industry.

In addition to being used in the production of sausages, biscuits, baked goods, tapioca and cheese bread, manioc goes to the paper and chemical industries.

For Cardoso, these cycles of high and low, which can last from three to four years, affect not only the consumer’s pocket but also reduce the competitiveness of cassava in the industrial process.

Felipe, a researcher at Cepea, says that the reduction in the supply of raw materials and the economic inefficiency in these periods cause more than 60% of idleness in the industries.

Within the gate, some advances have already been made, according to Cardoso. The average productivity in Brazil, according to the IBGE, is 15 tons per hectare, but Paraná, Mato Grosso do Sul and São Paulo are already close to 25 tons.

Cassava is starting to gain some niche markets with greater added value, such as gluten-free products and those used in fitness recipes. Demand, however, is still small.