Weakness in rice processing capacity hindering exports: traders

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Farmers plant rice seedlings in a paddy field on the outskirts of Yangon. Photo: Phoe Khwar

Weaknesses in the rice processing capacity, poor logistics, and supply chain infrastructure are impeding exports, said U Than Oo, the secretary of the Bayintnaung rice depot.
“There is a mismatch between the capacity of rice mills and demand. Rice mills do not have the capacity to produce enough rice to meet the demand, despite a large supply of raw material. Poor processing technology is hindering the export process,” said U Than Oo.
“Weakness in the manufacturing capacity is leading to stockpiling of raw materials and posing obstacles to exportation. Only well-milled rice varieties are traded in the domestic market, and rice needs to be processed — refined and polished — for export,” he said.
“Earlier, only well-milled rice was shipped to African countries at a cheap price. This year, sortexed rice is being traded. However, the capacity of rice mill machines is limited when it comes to processing rice and producing sortexed rice, which is devoid of impurities, discoloration, and broken grains. All the mill machines in Yangon are busy,” said U Than Oo.
At present, rice mill machines are running 24 hours, and ships are docked at the port to load the rice, according to the rice market.
The rice millers have sought government loans to operate the rice mills using advanced technology and deregulation of rules and regulations.
“Most rice mills are executing milling business on a manageable scale. We require large-scale production, like international producers. If rice can be produced in a strategic location, it can reduce certain costs. For example, rice is supplied from Shwebo Town to Yangon and Mandalay markets. Then, the rice is processed again in Yangon. If the finished rice products are directly loaded onto ships, it will help reduce logistics and supply chain costs,” said U Than Oo.
Myanmar exports rice through the border gates as well as via maritime trade. However, agricultural products trade with China through the border gates has been halted on account of China clamping down on illegal trade. This has resulted in a drastic drop in rice exports through the border. Therefore, rice traders have been mainly relying on maritime trade.
Between 1 October, 2018 and 28 June, 2019, over 561,364.8 tons of rice, worth US$168.78 million, was exported through the border gates, while maritime exports crossed 1 million tons, valued at $363.19 million, data from the Myanmar Rice Federation showed.
In the nine months since October in the current fiscal year, over 1.7 million metric tons of rice and broken rice were shipped to foreign countries, with an estimated value of $531.98 million.

By Nyein Nyein(Translated by Ei Myat Mon)

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