With Myanmar expected to gain access to new markets with the lifting of tariffs, rice farmers are likely to begin diversifying where they choose to export goods, creating more sustainability in an industry currently challenged by smugglers in China, said Myanmar Rice Federation secretary general U Ye Min Aung.
“Myanmar is at the turning point of rice trading with the international market. For the past three or four years we have exported about a million tonnes of rice,” he said, adding that new markets will create demand for Myanmar rice that will see that figure will double by 2020.
He said that with new trade policies in place, Myanmar will also need to build the appropriate infrastructure to sustain such a high volume of exports, including all-season ports, high-capacity warehouses and rice reprocessing plants, while increased foreign investment will bolster other needs such as irrigation, education and processing.
“If we can solve those four problems, by about 2019 or 2020 we will be able to export about 3 million tonnes of rice easily,” he said.
Economists agree that the 3-million-tonne target is indeed plausible, but will require both circumstances to trade as well as additional government funding to farmers currently struggling to turn a profit.
“There is a big demand for Myanmar rice. We have chance to export 1 million tonnes of rice to China alone, but we need to produce much more quality rice and then need to meet
specifications demanded by the international market,” said independent economist Hla Maung.
About 60 percent of Myanmar’s rice is exported to China through Shan State’s Muse border with many Chinese importers illegally smuggling stocks into their country to avoid paying tariffs. In dealing with such traders, local farmers have been known to receive higher prices, though buyers have recently begun withholding stocks importers are now offering less.
Rice exports for the 2013-14 fiscal year will likely reach just 1.1 million tonnes, falling well short of the 1.6 million tonnes exported last year. Myanmar produces between 12 to 13 million tonnes of rice each year, of which about 10 million tonnes are consumed domestically.
Nevertheless, the country’s agriculture sector has seen a lack of funding, both from international investment and government subsidies, and many rice farmers are forced to take out costly loans that neutralise most profits, said MRF chairperson U Chit Khaing.
“To develop agribusiness, we need public-private partnerships,” he said.
source: The Myanmar Times