World Market for Starches/Glucose, Emphasizing Cassava

Report Highlights

• The global market for the structure of starch crop demand was more than 2.4 billion tons. At an average annual growth rate (AAGR) of 2.4%, this demand will reach almost 3.1 billion tons by 2015.
• In industrialized countries direct food consumption may not change much since consumers will have the ability and be ready to pay higher prices for cereal and tuber crops and their manufactured products. In developing countries, however, the past trend to consume more potatoes and cereals on the expanse of other tubers will be reversed and people will tend to eat more sweet potato and cassava again.
• Bio-ethanol starches have the highest growth potential, with a 10.3% AAGR and reaching more than 230 million tons by 2015.

INTRODUCTION

Globally, the production of starch-containing crops outweighs all other industrial and food crops. Fifty percent of the world's average daily calorie intake is provided by such starch crops. The manufacturing of compound feed is also based on at least 50% starch crops, and for poultry and pigs, feeding systems are based even more on starch-derived energy. The extraction of starch from such agricultural commodities is one of the most important agro-industries worldwide and recently large-scale bio-fuel programs are also based on the conversion of starch into energy.

Globally the major commodities from which starch is derived are corn, wheat, cassava, potato and sweet potato. Starch may also be derived from barley, rice, and other cereals. However for the starch industry such sources are of subordinate importance. In addition to being important food stuff, starch from such crops has a variety of industrial uses. It is used in the food industry as a thickener, filler and binder; to manufacture sweeteners and syrups used in the soft drinks and brewing industry; in baked goods, confectionary and many other food products; and to produce sugar alcohols, which are widely used in the food and chemical industry. As a carbohydrate source it forms the basic feedstock for much fermentation processes of chemicals.

The demand for starch and starch-containing crops has been growing strongly for many years. This growth was accelerated in recent years and overshoots the growth of production of starch yielding agricultural products.

The reasons behind this trend are that in many regions of the world income is rising, which triggers the demand for meat products but also of products that need starch as a raw material for manufacturing, such as sweeteners and fermentation products. Additionally, the strongly increasing world demand for energy has induced an intensive build-up of an international bio-alcohol industry, which further adds demand for starch-containing crops. In fact the bio-ethanol programs in North America, Europe and Asia are responsible for demand growth rates in the past few years that have never been seen before.

As a result, annual production of the standard starch yielding crops-corn and wheat-is no longer high enough to meet demand. Stocks have decreased, reaching an all-time low in 2005/06. For starch-containing tubers, stocks cannot be stored as the crops perish quickly. Also, tuber demand is increasing more than annual production.

Consequently, industries that produce and use starch crops are faced with increasing raw material prices; and this trend will continue in coming years. In the past, starch crop prices fluctuated over a wide range, but available cereal stocks could buffer upward price trends. These price increases will induce also a change in current market conditions. Tubers, notably sweet potato and cassava, are all rich in starches. However, they have not yet been exploited for that purpose to the extent that wheat and corn have. This might change as cassava in particular shows great potential for increased production and utilization. Cassava is grown mostly in Asia, Africa and Latin America. Starch crop users and producers are increasingly looking at cassava as a future raw material. But can cassava really meet the future global demand for carbohydrates?

SCOPE OF STUDY

This report contains:

An extensive review of the historic development of starch crop production, with respect to corn, wheat, cassava, sweet potato, potato and rice

• Historic grown rates and the dynamics of growth in various sectors
• Extrapolations of starch crop utilization and of starch in various sectors
• Global market forecast out to 2015
• A thorough profiling of important companies within the industry
• A detailed patent analysis and examination of new and upcoming technological trends.

METHODOLOGY

The report is based on the analysis of the historic and current starch crop markets and discusses future developments and consequences over the next 10 years in all major application segments. It unfolds therefore in two sections. A comprehensive literature review is complemented by interviews with the relevant starch-producing and using industry to derive a clear picture of the current situation and how it developed over the past few years. As the starch industry is global, such interviews were carried out with market participants in all major areas: Europe, North America and Asia. The future demand of starch crops was derived by estimating future growth rates of starches for all application segments and by subsequent amalgamation of the results. Contrasting future availability and demand indicates surpluses or deficits for various starch crops and possible future price trends. The changing prices of starch crops trigger changes of their use and therefore have strong consequences for industries such as foods, feed and technical use. For each of these sectors the impact of changing starch prices was estimated by considering possibilities for substitution and alternative set-ups of the industry. These scenarios were discussed with the relevant industry participants. Ultimately the description of some of the key players in the industry addresses the extent starch manufacturers are really prepared for a changing raw material supplies, and for all the evolving changes in the consumer industries.

INFORMATION SOURCES

There is an abundant literature on starches and starch crops available, mostly discussing technical production parameters. Data and information on the economics of starch production and on the starch-using industry is also available. A comprehensive picture of the implications of an increasing starch crop and starch demand compared to a shrinking supply by the traditional sources is, however, rarely found. This study relies on the results of extensive discussions with the relevant and concerned industries, and combines the individual views into a coherent picture.

ANALYST'S CREDENTIALS

Ulrich März is experienced both as a food scientist and technical economic analyst in the field of food, feed and fermentation ingredients. He has made significant contributions to technology and performed industry and market analysis of vitamins, cartenoids, enzymes, organic acids, amino acids, and other fermentation-derived food and feed ingredients with BCC multi-client studies. Dr. März has been with BCC for over 10 years. He has an MSc in Chemical Engineering and a Ph.D. in Economics and Management from the University of Stuttgart, Germany.