Page 42 - FoodFocusThailand No.175 October 2020

SPECIAL FOCUS
Gluten-free Flour

Should be Promoted as

“Product Champion”

to Add 8.2x Value to Cassava by 2027

Thailand is rich in biodiversity, has a plentiful supply of agricultural produce, and is the
world’s leading agricultural exporting nation. These factors, coupled with the fact that the
global economy is moving towards a “new normal” amid “deglobalization,” will inevitably
see Thailand experiencing increased volatility in commodity prices dictated by
the global market.

To cope with this, Gluten-free flour is thriving as it meets the needs of
Thailand should focus gluten-intolerant consumers in Europe and the US.
on and accelerate Gluten-free flour is a new option for those suffering from celiac disease,
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its efforts to add which is a digestive disorder caused by an abnormal immune reaction to
value to agricultural gluten, and those who are health-conscious, because it is rich in fiber. This,
produce via agro-processing, therefore, presents ample market opportunities for cassava as it can be
based on innovations like bioeconomy . Bioeconomy is a new model processed into gluten-free flour for producing baked products, non-dairy
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for the economy, with the aim of adding value to the agricultural foods, snacks and beverages. Currently, the gluten-free market accounts
sector by processing farm produce into biochemicals . Under this for more than 29% of the global free-from food market, and its turnover by
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model, Thailand could process cassava into a promising product 2024 is projected to grow by more than 1.7 times to USD 57.0 billion,
such as gluten-free flour. With Thailand’s capacity to produce compared to the USD 32.8 billion recorded in 2019.
approximately 30 million tons of cassava per year, processing Major markets for gluten-free foods are the EU (52%) and the US (20%)
cassava into gluten-free flour would substantially help Thailand add because their cereal production primarily comprises wheat, barley and
value to this farm produce. In addition, it would sustainably help oats; therefore, there is high demand for gluten-free flour. The combined
absorb the huge cassava supply and is in line with the country’s turnover of gluten-free flour in the EU and the US reached USD 6.8 billion
biotechnology development policy to promote Thailand to become in 2019, and the figure is projected to increase to USD 12.5 billion in 2024,
the “Kitchen of the World” in the future. representing an average growth rate of 10% p.a. This offers opportunities
KResearch views that Thai cassava exports overall may grow for Thailand to produce gluten-free flour for the thriving free-from food
at a meager pace over the next 2-3 years because of the ongoing market, in particular the baked goods market, which accounts for more
US-China trade war, sluggish Chinese economy as a result of the than 27.2% of the global free-from food market and is expected to see
impact of the COVID-19 pandemic, and China’s high maize stocks average growth of approximately 8.8% from 2019 to 2024.
at approximately 200 million tons. It is expected that Thai exports
of shredded cassava, cassava pellets and native tapioca starch Promoting gluten-free cassava flour as a “Product
(primary cassava products) will see low growth because of China’s Champion” will add value to cassava and absorb
unfavorable policies. For instance, China has a policy to use more cassava supply in line with Thailand’s goal to become
of its stockpiled maize and increase investment in cassava cultivation a regional biohub
and primary processing in CLMV countries. Moreover, Thai cassava Because Thailand’s cassava production is projected to gradually decline
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exports will face increased pricing competition from alternative in the future due to unfavorable cassava prices, an expected drop in demand
cereals and lower-priced cassava from Vietnam. Nevertheless, from China, and the fact that the processing of shredded cassava, cassava
exports of Thai modified tapioca starch (intermediate cassava pellets and native tapioca starch can add only 1.2-times value to cassava
product) look promising (although they may grow at a slower pace) production, Thailand should opt to process intermediate cassava products
as pricing competition in this segment is not as intense, and there like gluten-free flour instead. Gluten-free flour should be promoted as a
is demand growth in downstream industries which produce high “Product Champion” in order to upgrade to an intermediate cassava product,
value-added products such as cosmetics, dietary supplements and
medicines in line with the S-curve industries.
Thailand, therefore, should focus on another intermediate
cassava product that has promising prospects in line with the global
consumption trend over the long term and has added value , like
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gluten-free flour. It could be promoted as a “Product Champion”, as
well. In so doing, the amount of raw cassava used for processing
primary cassava products like shredded cassava, cassava pellets
and native tapioca starch must be reduced for the processing of
gluten-free flour instead. Meanwhile, although intermediate cassava
products such as modified tapioca starch may grow, their growth
may be slower going forward. As a result, gluten-free flour offers an
interesting alternative for Thailand to expand its market to meet the
needs of new customer segments in the future.

42 FOOD FOCUS THAILAND OCT 2020

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