Thailand starts tapioca starch futures trading
BANGKOK: Thailand’s commodities futures exchange launched tapioca starch futures trading on Friday but turnover was very thin as most tapioca dealers do not understand futures markets, the exchange’s president said.
“We did not expect very high volume on the first day as players need time to be informed about futures trading,” said Napaporn Kurupasutachai, president of the Agricultural Futures Exchange of Thailand (AFET).
Tapioca starch, which is used in the food, paper and toothpaste industries, became the third futures product on the fledgling exchange, behind rubber futures started in May last year and rice futures in August.
Thailand, the world’s biggest producer and exporter of tapioca starch, exported 1.8 million tonnes of the commodity in 2004.
Three 15 metric tonne contracts — June, July and August — were offered but only eight changed hands in morning trade.
Tapioca traders said they wanted to wait to see how futures trading worked, but expected prices to rise over the next few weeks in line with rising physical prices caused by a drought.
According to a survey by the government and several tapioca business associations, Thailand will produce around 14 million tonnes of cassava — the raw material for tapioca starch — this year, down from a previous estimate of around 20 million tonnes.
On the physical front, the price of cassava rose to 1.80-2.00 baht per kg, up from 1.00 baht ($0.026) last year and higher than a market intervention price set by the government of 1.50 baht. —Reuters