At a time when Myanmar’s traditional new year begins and Myanmar farmers are preparing to harvest rice grown this summer, the news of the destruction of 18,000 tons of Myanmar rice deemed ‘unfit for consumption’ at Cote d’Ivoire has caused concerns among merchants, organizations and authorities. The public is also paying much attention, because rice from Myanmar is exported, even to EU countries, without difficulties regarding its quality.
Unfit for consumption
The news of the destruction of rice from Myanmar at Cote d’Ivoire were reported by international media.
“This news is true. Our Myanmar Rice Federation will explore the situation and explain the issue, with all facts and in detail,” said U Ye Min Aung, President, MRF.
Myanmar entrepreneurs considered the destruction of Myanmar rice to be a bitter blow, affecting not only rice exports, but also other export markets, including crops and fishery products.
The beginning of the journey of Myanmar rice to Africa
“A vessel loaded with 22,000 tons of rice left Yangon in mid-October, 2018, as part of its journey to Africa through Singapore. After about 4,000 tons of rice were unloaded at Guinea, the remaining rice was rejected. This 18,000 tons of rice was also rejected in Ghana and Togo. So, the Singapore company ordered the remaining rice returned to Myanmar and we, the Ministry of Commerce, gave a green light in March to do it,” said Deputy Permanent Secretary of the Ministry of Commerce, U Khin Maung Lwin.
Concerning the quality and standard of Myanmar rice, ministries and organizations related to rice have been working together on quality issues. It was found that exported rice is different from rice consumed at home. Most exported rice is 25-mark rice, which means that 25 per cent of exported rice is broken rice. Some rice merchants assumed that the quality of rice stored over six months in cargo might be degraded, to a certain extent.
Experts also suggested that resolving the issue of rejection is more important than the issue of destruction.
If the quality of Myanmar rice does not meet the required standard, …
U Chit Khaing, Patron of the Myanmar Rice Federation, wrote a post on his FB page urging the Ministry of Commerce to take severe actions against the company that is responsible in this case and the third party inspection agency which inspected the quality of rice, if it is found that rice is rejected due to its quality.
At the same time, U Ye Min Aung, Chairman of the Myanmar Rice Federation, posted a comment on social media urging the exporters and third party inspection agency to find ways to check the quality of rice effectively. He also pointed out that this kind of case occurred because the rice was sold to transit traders. He wrote that the situation demands a G-to-G sale of rice, linked to end buyers.
“The company’s third party inspection agency checked the rice on board, and it was also learned that the rice was loaded onto the vessel during the rain. We found solids of rice in the picture. Another reason is, I think, that they bought rice when the price was high, but when they sold it, the price was down. The most responsible person in this case is the trader. For Myanmar, similar problems can come in the future, as we have no chance to directly export to end buyers. This issue shows that the broker sells rice likes a vendor,” commented a rice entrepreneur.
Fierce competition and weakness in acquiring direct market
Competition is fierce in Africa’s market as other Asian rice exporters put up stiff competition. In addition to Myanmar, Viet Nam, India, Pakistan, etc. were also exporting competitively.
“The first plan was for them to ship it back to us so we accepted it. Once the rice was back here we’ll see why it was rejected. The ministry, association, inspection agencies and exporters had all agreed on this. But the company later said they won’t send it back and instead unloaded it at Ivory Coast. We learnt about the news of the rice being destroyed only this morning,” said the Deputy Permanent Secretary of the Ministry of Commerce.
Myanmar exports rice mainly under the FOB (Free on board) system. Not only rice but other regional products are exported in the same way. Officials noted that although the rice was grown in Myanmar, it was later bought by middlemen and they, in turn, sought to sell it to end users. The cargoes of rice, however, were left onboard the ship for too long, resulting in damage or in the degrading of its quality.
The reasons for the rice being rejected are being investigated
The first thing is to investigate why countries from Africa rejected Myanmar rice. Next, we’ll ensure a similar situation isn’t repeated, said the Deputy Permanent Secretary.
Myanmar rice was successfully exported all over the world during the 1940s. Back in 1994, a similar incident to this happened where Myanmar rice was not being up to quality. There can be many causes but all sectors need to be looked in so that the role of Myanmar’s rice export is raised as quickly as possible.
Economist U Tin Htut Oo expressed his view on the current situation: “The government and ministry side need to work toward selling directly to the end user. More emphasis must be placed towards this. The capacities of the commercial attaches sent abroad also need to be raised. More bilateral trade agreements are required. More efforts must be made toward acquiring assured quota.”
According to records, rice was exported to a total of 50 countries from 1 April 2018 to 1 Mach 2019. 1,822,822.142 metric ton was exported. Broken rice amounting to 393,795.01 metric ton was exported to 25 countries. The combined worth of the two was US$ 730.44 million. Of this, 1,110,972.572 metric ton valued at US$ 361.423 million was exported by sea.
It is believed that soon, government officials, association s and people from the rice trade will overcome the difficulties faced.
A local rice business person, U Win Naing, said we’ll have to do the best we can. “We were weak in selling directly. We need to have a better way of assuring the quality of our products. Only by establishing a firm and strong market can we avoid this sort of problem again.” With a sigh, he uttered a prayer for the future for our rice export to be good and smooth. – Khin Yadanar (Translated by GNLM)