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September 23, 2008

Current situation of cassava in Vietnam and its potential as a bio - fuel

Hoang Kim, Nguyen Van Ngai, Reinhardt Howeler and Hernan Ceballos

ABSTRACT

Cassava in Vietnam is among the four most important food crops. But it has always been considered a secondary crop even though it has played an important role in national food security, especially during the difficulty year of the late 1970s. During the past two decades of economic renovation, Vietnam has successfully escaped lingering food deficiency. Cassava now an important source of cash income to small farmers, who either use it for animal feeding or for sale to starch factories. In 2007, cassava fresh root production in Vietnam was about 8.90 million tones, up from only 1.99 million tones in 2000. This was achieved through both area expansion, from 237,600 to 560,000 ha and marked increases in yield, from 8.36 t/ha in 2000 to 15.89 t/ha in 2006. While eighteen years ago there were no medium- or large-scale cassava starch factories in Vietnam, there are now 60 cassava processing factories in operation with a total processing capacity of 3.2 - 4.8 million tones of fresh roots/year. Total cassava starch production in Vietnam was about 800,000- 1,200,000 tones, of which 70% was exported and 30% used domestically. Vietnam has developed an E10 policy requiring the production of 100 to 150 million liters per year. Petrosetco, a division of PetroVietnam, plans to build two tapioca-based ethanol plants in southern and central Vietnam. The state-run company signed two separate deals with Japan's Itochu Corp. and UK's Bronzeoak Group last year. The joint venture with Itochu will see the set up of a plant with a 75 million litre annual capacity in southern part of the country. Petrosetco and Bronzeoak are investigating the possibility of a 150 million litre plant in central Vietnam. Both plants will draw ethanol from tapioca chips sourced from within Vietnam, according to sources close to the projects. Vietnam is now probably the second largest exporter of cassava products, after Thailand with 0.60 million tones of starch and 1.20 million tones of cassava chip, respectively in year 2007.. Major markets of Vietnam’s cassava exports are the P.R. of China and Taiwan, Japan, Singapore, Malaysia, South Korea and countries in Eastern Europe. Besides, animal feed factories also contributed significantly to the increasing demand for cassava roots. Although in Vietnam cassava processing is a relatively new business and export volumes are still low, the cassava processing factories are new and modern. That is why Vietnam’s cassava products may have a competitive advantage in the world market.

Key words: Cassava in Vietnam, Bio-fuel

INTRODUCTION
Cassava ranks as the world’s fifth most important foot crop- after maize, rice, wheat and potato. Cassava originated in South America and expended wildly to Asia, Africa and being cultivated in 105 countries in a range from 39oN to 30oS. This crop is a staple food crop for many poor farm families around the world. It is also a source of commercial animal feed, starch for the food, candy, alcohol, noodle and pharmaceutical industries. Global production of cassava is around 226 million tons in year 2006 (Figure 1) and about 54% of cassava in the world was produced in Africa, 30% in Asia, and only 16% in Latin America and the Caribbean (LAC).



Figure 1: Cassava production in the different countries in the world, 2006

Cassava production in Asia increased at a high rate of 3% annually during the late 70s and early 80s, slowed down during the 90s, and has been growing quite rapidly again at 3.3% per year during the past ten years (Reinhardt Howeler and Keith Fahrne, 2008).

Cassava is water- use efficient bio-energy crop to corn for enhancing livelihood opportunities of smallholder farmers in Vietnam. This paper cover in: 1) Current situation of cassava production in Vietnam; 2) Present situation of cassava consumption in whole country and a case study of market in the Central provinces. 3) The potential of cassava as a bio - fuel

I. CURRENT SITUATION OF CASSAVA PRODUCTION IN VIETNAM
Cassava in Vietnam is among the four most important food crops but it has always been considered a secondary crop even though it has played an important role in national food security (Table 1).



The review of cassava production in Vietnam including cassava land and climate, cassava production areas socio-economic conditions, cassava cultural practices at http://cassavaviet.blogspot.com Cassava production in Vietnam has mainly been allocated in the Central and Southeast. In 2006, cassava planted area has reached 474.8 thousand hectares, in which about 65% of total area was allocated in the Central and Southeast. It can be seen that the cassava production in Vietnam has been gradually shifted to the Central and the Southeast areas in the recent years. The three regions all have increased the areas of cassava production with different levels. Prominent among three regions is the Southeast with a significant increase in 2001 (see Figure 2).



Figure 2. Area and output of cassava in the Central provinces, Vietnam

There has a great achievement in cassava yield and output. In the past six years, cassava production increased from 1.99 million tones in 2000 to 7.71 million tones in 2006 (Table 2). This was achieved through both area expansion, from 237,600 ha in 2000 to 474,800 ha in 2006 (14.3% annual growth), and marked increases in yield, from 8.36 tons/ha in 2000 to 16.2 tons/ha in 2006 (13.4% annual growth).



New high-yielding cassava varieties (Table 3) and more sustainable production practices have increased the economic effectiveness of cassava production. In year 2006 about 350,000 ha of new varieties, mainly KM94, KM140, KM98-5, KM98-1, SM937-26, KM98-7 were grown, this corresponds to about 75 % of the total cassava area in whole country.



Cassava yields and production in several provinces have doubled, stimulated by the construction of new large-scale cassava processing factories. The cassava output in each region has been corresponding to the planted area and yield which greatly depends on the application of new high-yielding cassava varieties in each province. This means that approximately 814 billion VND (51,89 million US$) per year were added to farmers’ income (Table 4). Many farmers have become rich by growing cassava.



II. PRESENT SITUATION OF CASSAVA CONSUMPTION IN VIETNAM
Cassava now an important source of cash income to small farmers, who either use it for animal feeding or for sale to starch factories. While eighteen years ago there were no medium- or large-scale cassava starch factories in Vietnam, there are now 60 cassava processing factories in operation with a total processing capacity of 3.2- 4.8 million tones of fresh roots/year. Total cassava starch production in Vietnam was about 800,000- 1,200,000 tones, of which 70% was exported and 30% used domestically.

Vietnam is now probably the second largest exporter of cassava products, after Thailand. The export of Thai Cassava Products from 1976 – 2007 in Figure 3. with 2,20 million tonnes of starch and 1.69 million tonnes of cassava chip exported, in year 2007. The export of Vietnam Cassava Products about 0.60 million tones of starch and 1.20 million tones of cassava chip, respectively.



Major markets of Vietnam’s cassava exports are the P.R. of China and Taiwan, Japan, Singapore, Malaysia, South Korea and some countries of Eastern Europe. Besides, animal feed factories also contributed significantly to the increasing demand for cassava roots. Although in Vietnam cassava processing is a relatively new business and export volumes are still low, the cassava processing factories are new and modern. That is why Vietnam’s cassava products may have a competitive advantage in the world market.

On average, labour cost accounts for 59.9% of cassava production costs. In some regions, like the Binh Dinh and the Gia Lai, this may be as low as 52.8% and 68.7%, respectively (see Table 5) The average labour requirement is 125 mandays/ha. The second largest cost item is fertilizer, constituting 41.8% in Binh Dinh province and 24.7% in Gia Lai, depending on farmers’ investment in fertilizer. With the selling price of fresh root of 900 VND/kg; farmers can earn 10,720 to 11,200 thousand VND/hectare. The total variable cost of cultivation in 2007 was about US$ 455- 567.5/ha, at an average root yield of 22.0 t/ha, the production cost would be US$ 20.68- 25.79 /t fresh roots. Gross income is US$ 1,155- 1,237.5 /ha. Net income is US$ 670 - 700/ha.



Cassava export volumes through Quy Nhon Port are 500,000 and 700,000 tons in 2006 and 2007, respectively, of which about 10% provided by Binh Dinh and 90% collected from surrounding province like Phu Yen, Gia Lai, and Quang Ngai, Kom Tum etc. Regarding market channel, it can be seen that though cassava chip in Binh Dinh accounts for small portion (10%) in total export though Quy Nhon Port, Binh Dinh however, have its own advantages of having Port and in collecting chip from surrounding provinces. In Binh Dinh province in 2007, about 250,541 tons fresh root has been sold in the market (81%). Reporting of farmers: 32% of fresh root has been processed by farmers for exportation; 22% of fresh root farmers sell to processing households, who process starch for domestic consumption; 19% farmers use for animal feeding or domestic consumption such as alcohol, cassava paper cake and so on. There has been only one cassava starch processing company with purchasing capacity of 27% total fresh root.

III. THE POTENTIAL OF CASSAVA AS A BIO - FUEL
Impact simulations indicate that root and tubers will play economically important and increasingly diversified roles in developing country food systems over the next two decades (2020 vision by IFPRI and CIP: Gregory J.Scott, Mark W. Rosegrant, Claudia Ringler 2000). Cassava ranks as the world’s fifth most important foot crop- after maize, rice, wheat and potato (Table 6). This crop is not only a staple food crop for many poor farm families around the world, a source of commercial animal feed, starch for the food, candy, noodle and pharmaceutical industries. It is but also as a bio-fuel.and alcohol.



Cassava has one of the highest rates of CO2 fixation and sucrose synthesis for any C3 plant. This plant being used as a suitable feedstock for ethanol production across Asia. The starch-rich root crop is currently utilized in China and Thailand on an industrial scale. Thailand recently launched a program involving smallholders who will be growing cassava for ethanol, in a push to alleviate poverty by diversifying their crop portfolio and open new markets. In China, cassava is seen as an important crop to use for the production of bio - fuels (Figure 4). The semi-tropical Guangxi region offers an ideal mix of climate and soil conditions for growing cassava. Compared with corn or wheat, the cost of using cassava to generate a ton of ethanol is 300–500 RMB ($38–$63) less. Guangxi currently produces some 8 million tons of cassava annually, accounting for more than 60 percent of the national total. Continued improvements, such as the introduction of better cassava varieties and plantation techniques, are expected to increase unit production of the crop. Moreover, an additional 670,000 hectares of hillside wastelands in Guangxi are suitable for growing the crop, adding to the existing 270,000 hectares of plantations. The region will also be able to obtain a stable supply of cassava from neighboring producer countries, including Vietnam.



Figure 4: In China, cassava is seen as an important crop to use for the production of bio - fuels

Using cassava in bio- ethanol production is also a growing interest in Vietnam. Vietnam has developed an E10 policy requiring the production of 100 to 150 million liters per year. On November 20, 2007, Deputy Prime Minister Hoang Trung Hai, on behalf of the Prime Minister, approved “the scheme on bio-fuel development to 2015 and the vision to 2025”, aiming to produce bio-fuels and partly replace traditional fuels, contributing to ensure energy security and environment protection. Petrosetco, a division of PetroVietnam, plans to build two tapioca-based ethanol plants in southern and central Vietnam. The state-run company signed two separate deals with Japan's Itochu Corp. and UK's Bronzeoak Group last year. The joint venture with Itochu will see the set up of a plant with a 75 million litre annual capacity in southern part of the country. Petrosetco and Bronzeoak are investigating the possibility of a 150 million litre plant in central Vietnam. Both plants will draw ethanol from tapioca chips sourced from within Vietnam, according to sources close to the projects. Media reports placed the investment values at around US$80 million to US$100 million for the joint venture between Petrosetco and Itochu, and US$138 million for the project with Bronzeoak (Energy Current 2008). According to Mr. Tao-Chairman of Petrosetco, the two most potential raw material areas are the Southeast and Central Highlands and the current volume of tapioca chips exported of 1.2 million tons per year has been sufficient under the annual capacity of 400 million liters of ethanol.

CONCLUTION
Vietnam is a classic example of how cassava can contribute to rural industrialization and development. Previously, people were reluctant to grow cassava because they thought that cassava caused soil degradation and produced low profits. But in reality one hectare of cassava can produce 60-80 tones of fresh roots and leaves. The situation has changed because of the development of sustainable cultivation techniques and new high-yielding varieties with the availability of a large and growing market demand. Cassava has become a cash crop in many provinces of Vietnam. Cassava chips and starch is now being produced competitively, and cassava markets are promising. The combination of wide spread production of fresh cassava roots and the processing of cassava into chips starch and ethanol has created many jobs, has increased exports, attracted foreign investment, and contributed to industrialization and modernization of several rural areas.

REFERENCE

FAO 2008. FAOSTAT (http://faostat.fao.org/ )

Hoang Kim, Tran Ngoc Ngoan, Trinh Phuong Loan, Bui Trang Viet, Vo Van Tuan, Tran Cong Khanh, Tran Ngoc Quyen and Hernan Ceballos 2007. Genetic improvement of cassava in Vietnam: Current status and future approaches. In: CIAT 2007, Cassava research and development in Asia. Exploring New Opportunities for an Ancient Crop. R.H. Howeler (Ed.). p. 118-124

Hoang Kim, Pham Van Bien, Reinhardt Howeler, Joel J. Wang, Tran Ngoc Ngoan, Kazuo Kawano, Hernan Ceballos 2005. The history and recent developments of the cassava sector in Vietnam. In: Innovative technologies for commercialization: Concise papers of The Second International Symposium on Sweetpotato and Cassava, 14-17 June 2005, Corus Hotel, Kuala Lumpur, Malaysia/ jointly organized by MARDI, ISHS with cooperation of F BRG, USM. p. 26-27.

Hoang Kim, Pham Van Bien and R.H.Howeler 2003. Status of cassava in Vietnam: Implications for future research and development. In: A review of cassava in Asia with country case studies on Thailand and Viet Nam; FAO-IFAD-CIAT-CIRAD-IITA-NRI. Proceedings of the validation forum on the Global Cassava Development Strategy held in FAO - Rome, Italy, April 26-28, 2000. Volume 3. Rome, Italy, p 103-184 http://www.fao.org/docrep/009/y1177e/y1177e00.htm,

Pham Van Bien, Hoang Kim, Tran Ngoc Ngoan, Reinhardt Howeler and Joel J. Wang 2007. New developments in the cassava sector of Vietnam. In: CIAT 2007, Cassava research and development in Asia. Exploring New Opportunities for an Ancient Crop. R.H. Howeler (Ed.). p. 25-32 http://www.ciat.cgiar.org/asia_cassava.

Pham Van Bien, Hoang Kim, Joel J. Wang and R.H. Howeler 2001. Present Situation of Cassava Production and the Research and Development Strategy in Vietnam. In: CIAT.Cassava’s Potential in the 21st Centery: Present Situation and Future Research and Development Needs. Proc. 6th Regional Workshop, held in HoChiMinh city, Vietnam, Feb. 21-25,2000. Howeler R.H. and S.L. Tan (Ed.). Bangkok. Thailand. p 16-24. http://danforthcenter.org/iltab/cassavanet

Pham Van Bien, Hoang Kim and R.H. Howeler, 1996. Cassava cultural practices in Vietnam. In: CIAT, Benchmark study on Cassava Production, Processing and Marketing in Vietnam. Proc. Vietnamese Cassava Workshop held in Hanoi, Vietnam Oct. 29-Nov.1.1992. R.H. Howeler (Ed.). Bangkok. Thailand. p. 58-97.

Reinhardt Howeler and Keith Fahrney 2008. Cassava production and utilization in Asia and its potential as a bio-fuel. Paper presented at NexGen Bio Ethanol Conference in Bangkok, Thailand. April 22-24, 2008, 21 p.

Tran Cong Khanh, Hoang Kim, Vo Van Tuan, Nguyen Huu Hy, Dao Huy Chien, Pham Van Bien, Reinhardt Howeler and Hernan Ceballos 2007. Selection and development of cassava cultivar KM140. In: NLU 2007, Khoa Nong Hoc, Nghien cuu Khoa hoc 2007, p.65-71

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