Wheat, tapioca and corn starch prices all rose month on month in April, with rising energy costs linked to the Middle East conflict putting pressure on processor margins and feeding through to Q2 contracts.

For wheat and corn starch, energy is a substantial part of overall costs in both food-grade and industrial segments. While hedging will limit major price increases in the near term, a long-lasting conflict in the Middle East is expected to put pressure on margins. Q2 contracts for both categories are already indicating price increases, particularly for lower-volume positions. MATIF wheat futures decreased month on month while CBOT wheat futures remained relatively stable, and both MATIF and CBOT corn futures were broadly stable. Raw material pricing leaves wheat processors in a more favourable position than corn processors for now.

Tapioca starch prices also rose month on month, with supply running 3% below last year. Processing plants in Southeast Asia are running through the final volumes of the season. Demand for tapioca derivatives, including cassava chips, is growing year on year. The border conflict between Thailand and Cambodia is expected to continue disrupting supply chains and exports, pushing producers to source more expensive local tapioca. Higher energy costs and Chinese stockpiling are adding further upward pressure.

Potato starch is the outlier. Prices edged up only slightly month on month, with supply remaining elevated on the back of a high-yielding potato crop. Demand remains weak, and the oversupply of potatoes is affecting all potato derivative markets. Suppliers are reducing stocks to prevent inventories from building further. Because potato starch is stored in silos, the direct impact of higher energy costs on processing is limited, although transportation costs are significantly affected and are likely to drive slight price increases.

US tariffs remain at 10% across the relevant origins: EU wheat derivatives, Thai and Vietnamese tapioca derivatives, and Turkish corn derivatives.

The outlook is bullish for wheat, tapioca and corn starch, and stable for potato starch.


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