Cassava prices up as supply drops, reversing old trend
Walmart shares fall after drop in earnings
THE price of cassava jumped sharply this year as many farmers who were fed up with low profits for several years in a row changed crops, thus decreasing the market’s supply and raising the price.
Last year during cassava harvesting season – traditionally from December to April – the price for 1 kilogram of fresh cassava was about 108 riel, or $0.026, while this year it was up to 250 riel, according to Kim Hout, director of Battambang’s Provincial Commerce Department. The price of dried cassava was 715 riel per kilogram, up from 575 riel in 2017.
“The price of cassava increased because the demand is still high, but the quantity decreased about 40 percent from last year,” Hout said yesterday.
In Sovanmony, deputy director of the province’s Agriculture Department, said that the area of cassava cultivation in Battambang dropped to 74,400 hectares last year, down from 138,000 hectares the year before. The province is the cassava hub of Cambodia.
“Because of unstable prices in the market, farmers allocated cassava plantations to become corn plantations” Sovanmony said yesterday.
Cassava prices had dropped precipitously in 2016 and last year, causing farmers to call for additional government aid to the sector.
Dorn Chenda, owner of cassava storage silo company Teth Cheda Agricultural in Battambang province’s Phnom Proek district, said that she had not heard farmers complain about the price of cassava this year as they had in previous years.
“The market for cassava is good this year,” she said yesterday. “That is not only me, but also farmers are satisfied.”
Chenda also noted that Thai brokers were demanding high amounts of cassava from her this year, though she did not know why and noted it would be difficult to meet demand since her supply had decreased by almost half.
Some cassava farmers who had decreased their holdings took note of the price increase and planned to plant more of the crop in the future.
Nheth Sophorn, a cassava farmer in Battambang, said that while she only allocated 2 hectares to cassava last year, “this year, we get a better price, and that gives me profits and hope, so I decided to turn back to planting cassava”. She said she would plant 4 hectares of cassava for next year’s harvest.
But Sophorn remains wary, as the low prices from previous years are fresh in her memory.
“Even though I’m happy with price this year, I still am not confident whether next year I will get the good price like this year or not,” she said. “Our market depends on the mouths of brokers, and we have no points to argue back.” HIGHER costs hit Walmart’s earnings in the fourth quarter, even as the US retail giant reported increased sales during the critical holiday period.
Shares were down more than 4 percent in pre-market trading to $100.48 after Walmart reported a 42.1 percent drop in earnings to $2.2 billion for the quarter ending January 31.
Revenues rose 4.1 percent to $136.3 billion.
Walmart has spent aggressively in the last couple of years to expand its e-commerce offerings and to boost employee pay and beautify stores.
Those efforts helped it produce a solid 2.6 percent gain in comparable sales in US stores, which accounts for more than half of revenues.
However, Walmart’s earnings were hit by a 3.2 percent increase in costs to $131.8 billion.
Earnings were also affected by one-time severance costs connected to the closure of 63 Sam’s Club stores in the US. Additionally, the company had pledged to compete aggressively on price during the holiday shopping season.
“We have good momentum in the business with solid sales growth,” said Walmart Chief Executive Doug McMillon. “We’re making decisions to position the business for success and investing to win with customers and shareholders.”
Earnings translated to $1.33, 4 cents shy of analyst expectations.