Presentation on theme: "Partners: Funded by the Bill and Melinda Gates Foundation"— Presentation transcript:
1 Partners: Funded by the Bill and Melinda Gates Foundation Country comparison of efficiencies and profitability in the HQCF value chain Helena Posthumus, Kola Adebayo, Francis Alacho, Nanam Dziedzoave, Grace Mahende, Vito Sandifolo, Lateef Sanni, Andrew Sergeant, Andrew WestbyPartners:Funded by the Bill and Melinda Gates Foundation
3 HQCF value chain Value chain End use Milling & sieving & packing High Quality Cassava FlourMilling & sieving & packingCassava dried gritsDryingValue chainCassava wet mash / cakeGrating & pressingPeeling & washingCassava fresh rootsCultivating & harvestingFresh cassava roots
4 The objectives of the exercise were: to allow comparison of production costs between countries;to identify areas for improvement of efficiency and profitability;to inform price negotiation;to provide information for M&E purposes (e.g. return per beneficiary)
5 MethodologyBased on typical costs of current practices and yields by country Assume use of sun drying or upgraded flash dryers Typical wage for unskilled labour used for labour costs: $1 to $4 per day (opportunity cost of labour) Regular monitoring of prices (incl wheat flour) Disclaimer: these are indicative figures!
6 HQCF value chain Value chain Value addition: production costs + profit marginsHQCFPrice of HQCFProfit margin processor (transport costs)End useFixed costsMilling & sieving & packingDiesel costs for dryingOther drying costsDryingValue chainGrating & pressingProcessing costsPeeling & washingPrice of rootsProfit margin farmerCultivating & harvestingProduction costs of roots (FCR)Fresh cassava roots
7 Costs and profit margins Nigeria Improvement flash driers
8 Costs and profit margins Ghana Competition with kokonte
13 Costs and profit margins Uganda Price of roots have gone down now to less than $200 / t HQCF
14 Lessons learnedVarious (market) drivers influence prices offered for HQCF – different in each countryPrice of alternative raw materials (wheat flour, corn starch, local cassava flour) for targeted end use of HQCF determines HQCF pricePolicies (import tariffs, tax, subsidies)Foreign ExchangeLandlocked country vs sea portPrice of alternative cassava products (at local markets) determines price of cassava rootsTechnology ↔ scale ↔ productivity ↔ efficiency ↔ profitabilityImportance of profit margins across value chainNeed to create consistent and constant supply of raw material (fresh cassava roots):By improving productivity of cassavaThrough contracts and price agreementsBy involving large-scale commercial growers, linked with smallholders (‘outgrower scheme’)
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