Tapioca Processing Industry in Vietnam

In the past 10 years, the Vietnamese economy has been growing quickly through industrialization and modernization. The gross industrial export in 1990 was 2-3 billion USD and by 2004, it had increased to 20 billion USD with an average growth of 20-25% per year. The agro-industrial sector is an important part of this growth, with the starch industry providing an example of how low-value agricultural commodities can be processed into high-value commodities like starch. This helps generate and diversify income in rural areas.

Cassava, also known as tapioca, is a major tuber crop grown in over 80 countries in humid tropics. In Vietnam, it is an important crop, second only to rice, playing a significant socio-economic role. Cassava cultivation areas in Vietnam can be found in the South, Center, and North regions. Cassava is a suitable crop for cultivation in any of the agronomic conditions in the production areas, especially in marginal areas. Its excellent drought tolerance makes it adaptable to various soil types in Vietnam.

Vietnam produces a lot of cassava, according to a study by Dieu (2003), ranking 16th globally with over 2 million tons per year. In 2002, Vietnam had about 235,000 hectares of cassava farms, with an average yield of 8.67 tons per hectare annually, which remained relatively stable. However, new cassava varieties and better cultural practices will increase cassava yields in the future. Vietnam produces around 500,000 tons of tapioca starch, equivalent to 1.6 million tons of fresh cassava roots, according to Vina Econet (2003).

Before 1988, only 10% of tapioca starch was used for starch processing in Vietnam. However, in recent years, there has been a significant increase in both household-scale and large-scale factories processing tapioca starch, with over 62% of participants in this field. This has led to the construction of numerous tapioca processing factories, especially in the south of Vietnam, with export prices averaging around 300 USD per ton. Vietnam exported over 21,000 tons of starch to neighboring countries in 1998, but export prices fluctuate based on the world market and importing country.

In 2005, Vietnam’s export of agricultural products increased by 29% from the previous year, with a total estimated turnover of 5.8 billion USD. In addition, the agricultural processing industry also saw an increase in production revenue, with a 10% annual increase to 5.25 trillion VND (328 million USD) during the first seven months of 2006. Food processing specifically recorded a revenue of 397 billion VND (24.8 million USD) in July, with an 11.5% annual increase.

Tapioca starch has many uses in different industries like food, textiles, and pharmaceuticals. Its demand has increased both locally and globally, and this has led to more investments by small and large-scale tapioca production firms. As Vietnam’s starch-using industries grow, there will likely be an increase in tapioca starch production in the coming years.

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