SE Asia sorbitol dips $5-20/tonne on falling tapioca prices

18 August 2011 05:19  [Source: ICIS news]

SINGAPORE (ICIS)--Sorbitol prices in southeast Asia fell $5-20/tonne ($3.45-13.8/tonne) this month from July, dragged down by declining costs of feedstock tapioca, market sources said on Thursday.

Sorbitol was assessed at $695-720/tonne FOB (free on board) SE (southeast) Asia in the week ending 17 August, down from $700-740/tonne FOB SE Asia in July, ICIS data showed.

Southeast Asian producers produce food grade sorbitols with tapioca starch as the main feedstock. Thailand and Indonesia are the biggest producers of tapioca in the region.

But tapioca supply has been outstripping demand in Thailand, causing sharp falls in prices since end-June, industry sources said.

Thailand’s tapioca starch export prices this week were down by 10% from 28 June, while domestic prices declined by more than 15%, according to data from the Thai Tapioca Starch Association (TTSA).

Domestic prices of tapioca in Thailand stood at baht (Bt) 13.10/kg ($0.44/kg) on 16 August, compared to 15.70/kg on 28th June, official data showed.

In India, there are some concerns among sorbitol producers over supply of maize, or cornstarch, which is their main feedstock for production.

“There was [heavy] rain just last week and I hope the (maize) crops are not damaged It is now difficult for us to enter the Middle Eastern market because of the cheaper tapioca prices. We are facing keen competition from Indonesia,” said an Indian sorbitol producer.

($1 = €0.69 / $1 = Bt29.86)
By: Wong Lei Lei

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