Lao Indochina Group Co Ltd (LIG) will raise the price it pays farmers for raw cassava from 400,000 kip to 450,000 kip per tonne, for cassava that is to be processed into powder.
The new price includes payment for delivery of the raw product from farms to the factory, according to an announcement made by LIG last Friday.
In cases where factory staff travel to farms to collect the crop, the purchase price has also been increased, from 250,000 kip to 300,000 kip per tonne.
“The new prices are effective today,” said company Chairman Sengmaly Sengvatthana.
This is the fourth price adjustment by the company since last year, first increasing to 320,000 kip per tonne before rising further to 350,000 kip per tonne last October and 400,000 kip per tonne in December.
The prices are often updated depending on fluctuations on the world market, the announcement noted.
The new prices also aim to increase the supply of cassava to the factory, which has stepped up demand after the recent expansion of its processing factory in Pakngum district, Vientiane.
LIG plans to increase the area on which cassava is grown to over 10,000 hectares and boost powder production capacity to 99,000 tonnes, in a bid to meet growing Chinese demand for cassava powder. The expansion plans will come into effect over this year and in 2011.
At present the company produces about 55,000 tonnes of cassava powder per year, using at least 600 tonnes of raw cassava daily. But the market can absorb 300,000 tonnes of the crop each year.
About 80 percent of the factory's output is shipped to China, with the remainder going to domestic markets.
A cassava processing plant in Meun district, Vientiane province, began production last year and has the capacity to produce about 200 tonnes of powder per day. It primarily exports to Vietnam.
A factory in Champassak province will start production this month with an output capacity of 200 tonnes of powder per day for both local and overseas supply.
According to the Ministry of Industry and Commerce, another factory produces cassava powder in Lau-ngam district, Saravan province. It is Vietnamese-owned, and exports to Vietnam and China.
Cassava is an ingredient in noodles, snack foods and seasonings. It is also used in the production of clothes, glue, paint, paper, medicine, false teeth and prosthetic limbs.
