Foreign Direct Investment in Blantyre, Malawi - Millennium Cities ...

Interviews conducted estimated that an initial investment of US$1 - US$2 million is required for setting
up a starch production plant. Such a production plant would produce about 3 tons of starch per hour.
Malawi produces virtually no starch currently even though some experts conducting research estimate the
local demand to be 3,000 tons. 70
Constraints
Perishability
Cassava roots have a shelf life of 24–48 hours after harvest, and fresh roots must be processed within 2 to
3 days from the moment of harvest. Cassava is also highly susceptible to microbial contamination due to
poor handling, humid climate, lack of proper drying, and the long transit time from the field to markets. 71
Pest Control
Pest and disease pressures from the cassava mosaic virus (CMV), cassava mealybug and cassava green
spider mite, lower yields. Losses in tuber yield due to diseases can be as high as 90 percent, making the
need to protect cassava against diseases one of the most crucial aspects of producing high-quality
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cassava.
Market Size and Access
It is known that cassava starch is a versatile material that competes well with maize, wheat and sweet
potato starches, with high export potential. However, it should be noted that many markets are not
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completely open in nature (e.g. European Community) and that price competition is fierce.
Supply-Side Constraints
The disjointed structure of supply, consisting of many smallholder farmers, can be an obstacle for
commercialization of cassava production for starch and flour. Associations such as the Southern Africa
Root Crops Research Network (SARRNET) and the National Smallholder Farmers’ Association of
Malawi (NASFAM) will play an important market linkage and information transfer role.
Quality Control
There is significant demand for improved grades and standards for cassava, particularly for industrial uses,
and there is potential for price premiums for high quality processed cassava starch and cassava flour.
However, most cassava varieties grown in Malawi cannot meet the FAO food safety standard measured
by the level of cyanogens. Even with increased investment in plant breeding or post-harvest technologies,
such a minimum level may not be attained. As such, quality standards may hinder the increased export of
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cassava as edible products.
Impact and Feasibility Assessment
Feasibility
Demand Factors
An FAO study of global cassava demand noted that growing urbanization offers opportunities to develop
markets for cassava. Opportunities to increase consumption are dependent on the consumption of cassava
70 Vito Sandifolo, International Institute of Tropical Agriculture (March 19, 2008). Personal interview.
71 Toomey, David C., Patricia Aust Sterns, and Charles Jumbe (2001). The Impact of Improved Grades and Standards on the
Export Potential of Targeted Commodities in Malawi PFID-F&V Report, (East Lansing, MI: Michigan State University and
United States Agency for International Development).
72 Ibid.
73 FAO and IFAD (2004). "Global cassava market study: Business opportunities for the use of cassava," Proceedings of the
Validation Forum on the Global Cassava Development Strategy 6.
74 Toomey, David C., Patricia Aust Sterns, and Charles Jumbe (2001). The Impact of Improved Grades and Standards on the
Export Potential of Targeted Commodities in Malawi PFID-F&V Report, (East Lansing, MI: Michigan State University and
United States Agency for International Development).
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