Myanmar plans to double rice exports

Bangkokpost, 29/10/2012 at 10:23 AM      

 

Myanmar, the world’s top rice shipper before five decades of military dictatorship made it Southeast Asia’s poorest nation, plans to double exports over five years, threatening to aggravate a global glut.

Overseas sales may climb to as much as 3 million metric tons by 2017 from 1.5 million tons in the year ending March 2013 as yields and infrastructure improve, Ye Min Aung, secretary- general of the Myanmar Rice Federation, said on Oct 25. The US Department of Agriculture raised its export forecast for Myanmar by 25 percent to 750,000 tons for this year on Oct. 11.

The country that could be Asia’s next economic frontier, according to the International Monetary Fund, is reviving the rice trade as it reengages with the global economy and shifts back toward democracy. The 2017 target would be equivalent to 8 percent of world exports this year, which are forecast by the USDA at 37.7 million tons. The global market in rice, a staple for half the world, has been in a surplus for seven years.

“The international rice market is very crowded with new exporters like Brazil, Russia and Egypt,” Concepcion Calpe, a senior economist at the United Nations’ Food & Agriculture Organization, said from Rome. “Unless there is a disaster of some sort, we still see the world rice economy facing an ample supply situation in 2012 and 2013.”

The country plans to more than double yields to as much as 4 tons per acre in five years from about 1.25 tons to 1.5 tons currently, said Ye Min Aung of the federation, which accounts for more than 80 percent of the nation’s output. “We are looking to boost productivity as well as income for farmers.”

Biggest Shipper

Myanmar was the world’s biggest exporter from 1960 to 1963, with shipments of 1.6 million to 1.7 million tons a year, until it was displaced by uThailand, according to USDA data. Last year, it shipped 778,000 tons, ranking ninth after Uruguay, and exports reached a nadir of 15,000 tons in 1996-1997. This year, global rice output will exceed demand by 9.7 million tons, up from 5.6 million tons the previous year, USDA data show.

It may take 10 years to 15 years for Myanmar to become a top shipper again, shorter than the two decades Vietnam took to become a top-three exporter, said Robert Zeigler, secretary- general of the International Rice Research Institute in the Philippines. “We see Myanmar as an extremely important source for rice production - there’s no question about it,” he said.

Cheaper Supplies

“The country has yet to have a proper legal, regulatory and institutional setup,” said Cyn-Young Park, assistant chief economist at the ADB. “So the talks on investments, though a lot has been said, haven’t actually been materialized.”

Rice from Myanmar is about $10-$20 per ton cheaper than the comparable quality from Vietnam, India and Pakistan, said Jac Luyendijk, chief executive officer at SAT Swiss Agri Trading AG, which handles about $300 million worth of rice a year. Constraints include antiquated ports, which may not be able to handle a sudden gain in volume especially during the rainy season, he said.

The Port of Yangon handles about 90 percent of the nation’s trade, according to the Ministry of Transport. Japan wants to build a port and industrial estate at Thilawa, 25 kilometers (16 miles) south of Yangon. Italian-Thai Development Pcl, Thailand’s biggest contractor, is also trying to get Japan to finance an $8.6 billion deep-sea port and industrial zone in Dawei.

http://www.bangkokpost.com/news/asia/318657/