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30 Jul 2020

Econ Digest

Gluten-free flour can bring an added value of up to THB 486 billion to fresh cassava

Thailand is a major exporter of primary agricultural products in the world, but given the fluctuation of the prices of agricultural products while the global economy adapts to the new normal, the development of added value for agricultural products is an urgent task. The processing of agricultural products based on new knowledge like bioeconomy will increase the value of agricultural products, which will not only help absorb domestic supply sustainably, but will also be in line with the country's biotechnology development policy.

Thailand’s exports of cassava products for the next 2-3 years may grow cautiously amid the US-China trade war and the impact of the COVID-19 pandemic. The export of primary products including cassava chips, cassava pellets and cassava flour will grow at a low rate and face intense price competition from substitute cereals as well as cheaper cassava from competitors like Vietnam. Meanwhile, although intermediate products like modified cassava flour may perform well, the growth rate may slow down. Therefore, Thailand should focus on the production of new intermediate products from cassava, such as gluten-free flour that shows a promising growth trend, in line with long term global consumption trends, with high added value. Moreover, gluten-free flour can be promoted as a product to be championed.

KResearch assesses that if Thailand can process 10 percent of the approximately 30 million tons of fresh cassava into gluten-free flour, this will help increase the value of fresh cassava by 2.3 times, or by about THB 137 billion in 2020-2021. That figure could surge to 8.2 times or around THB 486 billion by 2027 if processing technology is improved to allow 40 percent of the fresh cassava to be processed. 

           However, the market for gluten-free flour in Thailand is still in its early stages, with a small volume of commercial production, due to the knowledge of production being limited to within specific groups such as educational institutions and government agencies, resulting in only a few large gluten-free flour factories. Therefore, the success of Thailand’s production of gluten-free flour for exportation should receive support from the government.

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Econ Digest