Poor demand from China, excess supply in harvest season lead to significant decline in brown rice price

Workers carry bags of rice at the Botahtaung Jetty in Yangon. Photo: Phoe Khwar
Workers carry bags of rice at the Botahtaung Jetty in Yangon. Photo: Phoe Khwar

PRICES of brown rice have fallen significantly this harvest time as China has halted its rice imports from Myanmar, according to the rice market.
U Than Oo, secretary of Bayintnaung Wholesale Center, said: “For the time being, merchants have to rely on normal trade routes because Chinese authorities are putting restrictions on border export of rice when the global rice prices remains cool. Another point is that international traders have already observed the rice harvest season in Myanmar. Thus, the market sees excess supply and it is hard to sell a ton of rice for US$300. Previously, traders got $340 per ton of the same variety of rice.”
Newly harvested rice is available in the market beginning in early October this year when a bag of brown rice was worth at around Ks24,000 which decreased to Ks19,500 per bag at the end of this month, according to the Bayintnaung Wholesale Center. At that time, the price of broken rice was Ks18,800 per bag which were approximately equal that of rice prices.
U Than Oo added, “The rice market is not in good condition as the selling prices of rice and broken rice are equal. The rice market for farmers may have disappeared in the long term. Farmers will be in debt.”
At present, the Bayintnaung Wholesale Center sees arrivals of between 50,000 and 60,000 bags of rice daily and it is expected that over 100,000 bags of rice are likely to daily enter the market this harvest time, especially in November. However, rice growers and millers are worrying about the supply of their products as it is difficult to sell them in both normal routes and border routes.
U Chan Tha Oo, deputy chairman of Muse Rice Wholesale Center, said that currently rice trading has suspended due to China’s crackdown at borders. An average of between 2,000 and 7,000 tons of rice previously entered the Muse border a day. For the time being, only around 1,000 tons of rice daily enter the border market.
Myanmar’s economy is estimated to decline in the long term as 70 % of the country’s agricultural products go to China which is still blocking Myanmar’s major export items. The country could export 3.6 million tons of rice last year, however, it is difficult to export 2.5 million tons of rice this year, he continued.
U Nay Lin Zin, joint secretary-general of Myanmar Rice Federation, said that currently, rice prices are declining not only in Myanmar but in the global market, including Thailand, Viet Nam and other rice producing nations. The prices of rice are estimated to continue to decline within the next one month.
During the period when Chinese merchants have suspended its rice imports from China-Myanmar borders, the normal trade routes are seeing an excess supply, resulting in a decline in number of rice exporters from about four to two. Rice traders say that they are worrying about the market.
The country’s rice production this year is better than that of last year. Experts estimate that the current rice marker is likely to much worse than that of the previous years.
Myanmar’s export of rice reached a record high of over three million tons of rice and broken rice in the last 2017-2018 financial year. But, it could export around 1.3 million tons of the same in the six-month mini-budget period between April and September this year.

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