Skyrocketing prices of sago (sabudana) and tapioca starch has washed away the worries of farmers producing tapioca tubers in Salem belt of Tamil Nadu. Both sago and tapioca starch are processed from tapioca tubers. The reason for prices going through the roof is shortage for these tubers when demand increased for sago in the domestic market.
On the other hand, hundreds of sago and starch processing units in Salem are struggling for survival following inadequate supply of tapioca tubers, said J Manjunath, managing partner of Libra Traders, a Salem-based starch and sago supplier.
Manjunath, who is also the member of Sagoserve, the country’s lone state-owned exchange for tapioca products in Salem, said tapioca is a 10-month crop and requires adequate water for cultivation. As the state witnessed acute drought in the past four years, many of the farmers have switched over to 3-month crops like barely and maize. This sudden change in crop pattern in Salem belt has resulted in shortage for tapioca, pushing up the prices to alarming levels this year, he added.
Sago prices, which stood at Rs 1,700 in January 2009, increased to a whopping Rs 3,000 per bag (90-kg) while tapioca starch prices doubled to Rs 2,100 from Rs 1,050 per bag.
Although Kerala tops in tapioca production in the country, Tamil Nadu, with 82,000 hectares under tapioca cultivation, stands first in terms of processing tapioca into starch and sago.
In Tamil Nadu, Salem plays a major role in serving the domestic tapioca starch and sago market. The area under tapioca cultivation in Salem alone has declined by half to 15,000 hectares in 2008-09 from 30,000 hectares in 2006-07.
In the past three years, about 300 sago and starch processing units in Salem belt were closed following shortage for tapioca.Currently, around 400 units are functioning partly without proper raw material for processing. If the farmers further decline to take up tapioca cultivation, the remaining processing units will also start closing shutters this year, said Rajesekar, a top tapioca product trader in Salem Sevvapet commodity market.
Thailand, one of the major exporters of tapioca starch, offers subsidy for cultivating tapioca. India, Tamil Nadu state in particular, should announce minimum support price (MSP) for tapioca to protect sago industry in the country, he said.
The volume of tapioca products traded in Sagoserve declined to 19.04 lakh bags in 2007-08 from whopping 24.41 lakh bags in 2001-02.
