1. “Sustenance in the Production of High Quality Cassava Flour (HQCF): The Pricing Issues”
Presented by:
Bernard Siwoku (Business Development Advisor)
Professor Lateef Sanni (Country Manager)
7th November, 2013

2. Outline
What is HQCF?
Common inclusion levels of HQCF in different products
Market Potential for HQCF
Challenges to HQCF Production
Cost of Production of HQCF
The Way Forward

3. What is HQCF?

4. HQCF is an unfermented, smooth, odourless, white or creamy cassava flour produced within 24 hours from wholesome freshly harvested and rapidly processed cassava roots.
The process for HQCF production involves peeling, washing, grating, pressing (dewatering), Drying, Milling and Packaging.
All process must be completed within 24 hours
The Quality Parameters are stated in the Book of Standard by Standard Organisation of Nigeria (SON)

5. Common Inclusion Level of HQCF in Different Products

6. Common inclusion levels of HQCF in different cereal-based products
Categories of End-users of HQCF
Product/End-Use
Inclusion Levels
Bread Bakers
Bread including French loaves
20 – 30%**
Food Industries
Biscuits
Wafers
Noodles
Spaghetti
10 – 50%
10%
10% up to 50%*
25%*
Home Caterers
Cakes
Chin-chin
Meat/ Fish Pie
Buns & Fish Rolls
Puff-puff
100%
25 – 100%
10 – 100%
10 – 12.5%
10 – 25%
Restaurants
Stiff Porridge (Cassava – Maize – Semo/Ugali)
18%

7. High quality cassava flour is a cheap replacement for wheat flour that can be used in a number of food and non-food options
How is it produced?
How is it used?
Cassava roots are peeled, grated, pressed, and then dried, by an artificial dryer
HQCF can be used in food and non-food options
At the rural level, bakeries can substitute HQCF for wheat flour
Industrially, biscuits and packaging / plywood are large-scale options for HQCF
For Aqua culture feed production
Artificial (flash) drying is effective for large scale, industrial production
Action points for the future:
- NA 7

9. Market Potential for HQCF

10. Market Potential for HQCF
Market Size (T/Year)
Replacement
Size of HQCF Opportunity (T/year)
Target Price Point (% Wheat Flour)
Price (N/Kg)
Milling
22 million 5%
110,000
90% 75
Biscuit
500,000
10%
50,000
75% 67
Packaging
3,000 – 6,000
100%
>80
Soap
600
???
Rural Caterers
Yet to be

11. Challenges Confronting HQCF Production

12. The Key limiting factors for HQCF
1. High prices offered by garri & fufu processors for cassava root 2. Most Cassava processing factories have been shut down for months/years 3. Ability of SMEs to meet buyers’ quality requirements consistently 4. Market acceptability & Capacity to deliver 5. Lack of working capital by SME owners 6. Inaccessibility to reliable sources of finance

13. The Guilty one! CASSAVA ROOTS & MEASURES

14. Cost of Production & Delivery
Margin Allowed (20%)
Cost of Transport
Total Cost
N90,000
18,000
10,000
118,000
N100,000
20,000
140,000
N120,000
24,000
154,000
N130,000
26,000
166,000
N140,000
28,000
178,000

15. Yield/ Ha
Price of N8,000/ T
Price of N9,000/ T
Price of N10,000/ T
Price of N12,000/ T
Price of N15,000/ T
15T
120,000
135,000
150,000
180,000
225,000
18T
144,000
162,000
216,000
270,000
20T
160,000
200,000
240,000
300,000
22T
176,000
198,000
220,000
264,000
330,000
25T
250,000
375,000
30T
360,000
450,000
35T
280,000
315,000
350,000
420,000
525,000

17. Cost of Production of HQCF

18. Cost Item HQCF Cassava Roots (N10,000/T) HQCF Wet Cake (N18,000/T)
40,000 -
HQCF Wet Cake (N18,000/T)
36,000
Peeling
3,000
Bags
1,200
Fuel for Drying (Black oil)
12,000
Generator
3,800
Electricity
1,000
Transport to Market
2,700
Grating
2,000
Pressing (Dewatering)
Fixed Cost
4,078
Contingencies (3% of Fixed + Var. Cost)
2,123
1,787
Total Cost of Production
72,901
61,365

20. Even though fresh cassava roots are the most expensive input and the most difficult to supply
Cost of goods sold, annual
$USD#
100% = 23
Diesel 10
Fresh cassava roots procurement
Transport
Most difficult supply to guarantee in terms of timing and logistics
Several options for procuring:
Smallholder farmer production
Outgrower / contract scheme
Self-supply through commercial means (supplemental)
Pricing is seasonal and based on a number of external factors (e.g., drought, famine)
Packaging 26
Fresh roots 55
2011 20

21. The Way Forward

22. The Price of HQCF should be fixed periodically (Quarterly or Bi-annual) using cassava root price as a factor
Training of farmers to increase yield so that the price of cassava root can be low and stable
Commercialisation of cassava production
Distribution of improved cassava varieties to more farmers around the selected SMEs
Flour millers are the BIGGEST buyers now, but not the ONLY buyer. Rural marketing as direct inclusion to bread, confectionery or food staples should be explored

23. Training of Potential Investor on HQCF based new product development - Use of HQCF in feed formulation should be explored; other uses of HQCF should be explored further
Encouragement of Processors to establish own farm as source of roots during price hike
Energy cost should be made low using alternative sources of energy such as use of Agricultural wastes – cashew shell; Palm kernel shell; saw-dust; etc

24. Conclusion

26. Due to the versatile uses of cassava, once the price of cassava root is relatively stable and competitive, the production of HQCF will become attractive for current and potential investors. This will help sustain the HQCF value chain and transform the livelihood of so many actors along the chain.

27. Thank you for your Attention!

28. Key contacts
Professor Lateef Sanni, Country Manger, Federal University of Agriculture, Abeokuta (FUNAAB).
Bernard Siwoku, Business Development Advisor,
General project
Project website: http//:cava.nri.org 28