The price of tapioca products, sago (sabudana) and starch, increased by 15-20% in the past one month due to poor arrivals as farmers could not harvest tapioca roots. Harvesting suffered because of continuous rains in Tamil Nadu.
The price of sago in the Salem (Tamil Nadu) spot markets increased to Rs 3,691 per 90-kg bag from around Rs 3,250 three months ago while that for starch increased to Rs 2,479 from Rs 2,050, Rajasekar, a leading tapioca merchant from Salem in Tamil Nadu told FE.
Due to heavy rains, farmers could not harvest and dry tapioca roots for the past one month. Tapioca is 10-month crop. Both sago and starch are processed from tapioca tubers. Generally tapioca harvest starts in October and runs through December. But this time, new arrivals have not yet hit the market, he said. The rains, which started before Deepavali is still continuing in the sago belt, traders said.
According to sources, arrivals to Sagoserve, the only government-run exchange to trade tapioca products, declined by 50% in the past three months. Current arrivals of Sagoserve stood in the range of 800 bags of sago and around 1,000 bags of starch per day.
In India, tapioca is cultivated only in Kerala and Tamil Nadu. Although Kerala is the largest producer of tapioca in the country, Tamil Nadu, with 82,000 hectares under cultivation, stands first in terms of processing tapioca into starch and sago. In Tamil Nadu, Salem is the biggest tapioca starch and sago market.
Tapioca cultivation suddenly declined in 2008-09 to 15,728 hectares in Salem belt from 30,000 hectares from the previous year. The sudden shortage has pushed up tapioca prices to alarming levels in 2009, resulting in farmers returning back to tapioca cultivation. From the beginning of 2010 the prices have started coming down, but from October the price is keep increasing, traders added.