The cassava starch processing industry earned a billion US dollars from exports in 1991. The path of industrial development has been, in general, under a free market system with limited government intervention. The Common Agricultural Policy (CAP) ofthe EC triggered the rapid development of cassava products for animal feed for export in the 1970s. Since then, the whole cassava industry has shifted from starch processing to the processing of tapioca products for animal feed, which was an export oriented industry. Although in percentage terms, the proportion of exports of cassava starch to total export of cassava products deceased from 25% in 1966 to 11% in 1991, starch export increased at an annual growth rate of 5.5%. The US and Japan have been themajor market for Thai cassava starch since 1966. In these markets cassava starch has been competing with domestic corn/maize starch. During the 1980s Taiwan became the third most important market for Thailand. In Taiwan, starch was used in various industries and also in modified starch processing. In 1982, the signing of EC-Thai Cooperative Agreement, which set a maximum import quantity of 21 million tons within four years, created active exploration for other usage of cassava root. This eventually focused on further value-added processing of cassava starch or so-called modified starch for more industrial applications. The movement of modified starch was a great hope for the whole cassava industry. The initial stage of modified starch was again for export to Japan. As a matter of fact, cassava starch was used for domestic consumption in both human and industrial consumption in a relatively small quantity in comparison to the exported quantity. In 1965, the estimated total domestic starch consumptionwas 44,557 tons, while the exported quantity was 148,206 tons. During 1965-80, most of the starch was used by the monosodium glutamate industry (22%), food industries (27%), paper industry (16%) and for direct human consumption (16%). The outstanding economic performance of Thailand during 1980-1990 in both industrial and agro-industrial sectors drew attention of cassava starch industry entrepreneurs to the domestic utilization of starch and its potential. During 1990-91, a cassava starch industrial survey was carried out with the objective of estimating the domestic starch consumption in various industries and to project the starch utilization scenario into the next decade. It was found that in 1990 there were 84 cassava or native starch manufacturerswith a total capacity of 2.0 million tons of starch per year. However, only 50 factories were actively operating in 1991 and produced 1.4-1.6 million tons of cassava starch. There were 17 modified starch factories with estimated capacity of 0.3 milliontons/year and the actual production was about 0.25 million tons. The estimation of domestic cassava starch consumption was comprised of starch consumption in producing monosodium glutamate (MSG) and lysine, sweeteners (excluding fructose), paper, home consumption, food industry, pearl, textile, plywood, and others. The annual consumption of each item was derived from the percentage of starch used in the finished products. For example, the production of MSG consumed cassava starch as 51% of the total weight, therefore the annual starch used was simply the total MSG production which used starch multiplied with the said percentage. The estimated figures were then checked with industrial participants. Statistical estimation of income elasticity and time trends was also employed in computing the series on starch consumption as well as the projection. In 1991, the estimated total domestic utilization of starch was 511 thousand tons of which direct human consumption and food accounted for 33%, MSG and lysine19%, glucose syrup 15%, the paper industry 9%, textiles 3% and the plywood industry only accounted for 1%. The projected starch consumption in 2001 was 1,184 thousand tons. This scenario showed that
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