Analyzing the Decline in China's Cassava Chip Imports: Implications for Regional Industries

China experienced a 21% decrease in cassava chip imports in 2023, largely attributed to soaring prices, which reduced its competitiveness in both animal feed and ethanol production. This decline has significant ramifications for China's sugar and ethanol industries, as well as for Thailand's agricultural sector. Thailand, a major exporter of cassava products to China, has seen its ethanol industry suffer due to the reduced demand.

China's domestic cassava production has stagnated, unable to meet its substantial demand for various purposes, including food, ethanol, feed, and fertilizer. Consequently, China relies heavily on imports, primarily from Thailand and Vietnam. China's close ties with Thailand in the cassava trade, coupled with the fierce competition between cassava and sugarcane for arable land, highlight the interconnectedness of regional agricultural economies.

The competitiveness of cassava-based ethanol in China has declined, leading to a decrease in its usage for both industrial and edible purposes. As a result, the operating rates of ethanol factories utilizing cassava have decreased. Additionally, the demand for cassava chips for feed production in China may decline amidst changes in agricultural policies and increased corn production.

The decline in corn prices relative to cassava prices has further weakened the competitiveness of cassava chips. With Thailand's cassava production projected to decline further in 2024 due to unfavorable weather conditions, China's cassava chip imports are expected to decrease even more. This trend underscores the intricate relationship between global agricultural markets and the consequential impacts on various industries reliant on cassava products.