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Cassava processor raises crop purchase price

Cassava processor raises crop purchase price

Vientiane Times, 8 March 2010

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

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

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

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.

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