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Will Myanmar become one of the world’s top rice exporters again?

Will Myanmar  become one of the world’s top rice exporters again?

Just after World War II, Myanmar was one of the world’s top rice exporters.  In 1963, the year after General Ne Win seized power in a coup and nationalised most businesses, Myanmar’s exports stood at 1.7 million tonnes.By 1973,rice exports had plunged to a low of 14581 tons,according to figures on the ricepedia.org website.But today Myanmar becomes the fifth of top rice exporters after India,Thailand,Vietnam and Parkistan.

Getting back into rice exporting game

The Myanmar Rice Federation forecasts exports will more than double by fiscal 2020 from the fiscal 2014 level to 4 million tons. Now rice traders in Myanmar are looking to get back into the exporting game, thanks to easier regulations brought in under the country’s democratic reforms. Paddy farmers have received increased support under the National League for Democracy government. When the party took office, farmers could borrow K100,000 per acre from government banks, but soon after that number was raised to K150,000 per acre.

There are good market prospects to accommodate higher rice exports from Myanmar over the next 10-15 years. China is becoming a large net importer of Myanmar rice, and the European Union has opened its markets for duty free imports from Myanmar.

But State-run newspapers have reported that the cost of a bag of urea fertiliser in Myanmar is 17 percent more expensive than in Vietnam, 12 percent more expensive than Thailand and 8 percent more expensive than Cambodia. Fertiliser quality is also a problem in Myanmar.If input costs  can be reduced,Myanmar farmers will have more profitable and the rice will be more competitive in the export markets.

World bank’s findings

According to World bank’s finding,Myanmar has:

  • Strong competition from other exporters in the region – Thailand, Vietnam and Cambodia – and constantly rising demand for the higher-quality rice has put pressure on Myanmar’s rice sector which has been focused on low-quality export markets.
  • The actual rice export has reached only about 1.3 million tons over the past years that lags behind the government’s target of exporting two million tons of rice this year and four million tons by 2020.
  • The most acute problems are low productivity and poor rice quality at the farm level. The average paddy yields of 2.5 tons per hectare are only half of those realized by other exporters in the region.
  • The milling sector operates with obsolete processing units that causes about 15-20 percent losses in quality and quantity during the milling.
  • Yangon Port, the main export gate, is small, outdated and with limited capacity during monsoons. The export procedure costs are some of the highest in the region.
  • Although many barriers to agricultural trade have been abolished, the private sector remains cautious about uncertainties in government actions.

A milestone of rice export

According to the Myanmar Rice Federation (MRF),rice export in the 2018-19 fiscal year exceeded its target of 2 million tons,which had an estimated export value of US$600 million.Rice exports are likely to hit about 2.5 million tons,as of the end of March,2018.It’s a milestone in Myanmar’s rice market history.Officials report that 60pc of rice exports went to China’s market,along with 44 countries in Africa,Asia and Europe.

New market to Philipines in 2019

According to the latest report of the USDA Foreign Agricultural Service (FAS), the Philippines will likely import 1.8 million metric tons of rice in 2019.And according to Reuters’,five companies, led by Singapore-based commodity trader Olam International, gave the lowest offers in a Philippines’ import tender for 500,000 tonnes of rice on 20th November.

 Olam offered to supply the Philippines with 210,000 tonnes and Vietnam’s Tan Long Group Joint Stock Co offered 118,000 tonnes.Thai exporter Asia Golden Rice Co Ltd made a bid for 99,000 tonnes, Thai Capital Crops Co Ltd committed 45,000 tonnes and Myanmar’s Shwe Wah Yaung Agriculture Production Co Ltd offered 28,000 tonnes.So Myanmar rice will be seen in the Philipines as a new market competing with Thailand and Vietnam.

So,will Myanmar be the top rice exporter in ASEAN?And will Myanmar become one of the world’s  top rice exporters again?

Ref:World Bank/Reuters/The Global New Light of Myanmar

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