Regional Markets

3 Cases
matter (e.g. dust) and—more importantly—cyanide. This cheap ‘low quality’ cassava
flour competes with maize flour as one of the two main staples in the country. As an
imported commodity, wheat flour is expensive in Malawi due to the additional transport
costs. The current shortage of foreign currency in Malawi makes it even harder to
procure imported goods, such as wheat flour. Next to the financial incentives of using
HQCF, various companies expressed an interest in buying Malawian products from
smallholder producers for corporate social responsibility reasons (Lamboll et al. 2009).
There are several main market segments for HQCF as a wheat flour replacement in
Malawi. The most easily accessible market is the biscuit industry, a long-time customer
of traditional cassava flour. This market opportunity is projected at 2,500 tons per year
at a price of USD 425 per ton HQCF (due to this low price it does not provide the
most lucrative potential). The second opportunity is in bakeries. Large bakeries are estimated
to consume about 35,000 tons of wheat flour each year. Between 5% and 10%
of the wheat flour can be substituted with HQCF for bread production. The projected
market share (3,500 tons) is not substantially more than the biscuit market, but rural
bakeries are willing to pay a higher price (about USD 525 per ton). The third opportunity
lies in flower mills, and two milling companies in Malawi have expressed interest
to substitute part of their wheat flour. However, additional guarantees are needed that
a year-round stable supply can be secured and that HQCF will not adversely affect the
taste, nutrition and health properties of the flour. There is another opportunity to market
HQCF as a starch feedstock for the manufacturing industry, to be used for paperboard,
textiles and plywood (Sergeant 2009).
The challenge in Malawi was to set up a new VC for HQCF that (a) benefits smallholders,
and (b) can produce year-round the volumes required by industrial end users
(which requires large-scale artificial drying). At the start of the C:AVA project, there
were no large-scale enterprises that produced HQCF. To seize the potential market,
large-scale enterprises needed to work together with small-scale farmers, who could do
the initial processing of cassava roots into pressed wetcake. This outsourcing requires
careful planning, excellent quality management (e.g., the wetcake must be delivered
immediately after production before any fermentation takes place), and increases the
complexity of the VC.
Currently cassava is sun dried during the dry season, which limits the total volume and
consistency (quality and quantity) of the flour. Processing capacity constraints typically
include limited drying space for sun drying, low capacity of chippers, labour requirements
for peeling, lack of presses for dewatering, prices paid by buyers of dried cassava,
and lack of accessible financing (Hillocks 2010; Kleih 2009; Lamboll et al. 2009).
Although sun-drying production of HQCF is based on a feasible low-cost technology,
some larger potential buyers in Malawi were not interested in sun-dried HQCF
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