There are several factors responsible for the rise or decline in the price of commodities in any market, many of which are as a result of shocks in the global supply chain, macro economic fundamental fluctuations or natural causes. We can only seek to identify the causalities in these trends. It is paradoxical that there is a global and local shortage in cassava output derivatives i.e ethanol, starch, and high-quality flour, but we have seen a local decline in the price of cassava over the course of the past 5 months (see chart below)
The opportunities in agriculture in Nigeria are enormous, however, commodity prices can be very volatile and unpredictable. Historical performance is not often a reliable indicator of future prices in most cases. Raw cassava tubers are selling for about 30,000 Naira per ton right now in Nigeria.
We shall examine the major factor that is responsible for the downward trend in prices of cassava tubers with rising input cost Viz a Viz shortages in the very popular staple in homes and industries.
A major reason for the downward trend in pricing is that a lot of farmers are harvesting simultaneously which increases supply to the market and thus causing a price shift downwards. Also, the aggregators and processing companies have more power over pricing than farmers as the prices of cassava derivatives (flour, starch, garri, ethanol, etc.) aren’t dropping.
Greenhills Cassava Farmstead is working to mitigate the incidence of crashing prices through value addition on the cassava tubers. Our starch and flour processing factory is scheduled to be completed and operational by the second quater of 2023. Regardless of the challenges, we are still harvesting the farmlands and selling to the off-takers.
Thank you for reading.