Although Myanmar’s rice export has risen by about 25,000 tonnes, and is likely to go up to nearly 1.5 million tonnes compared to the export volume in the fiscal year 2015-16, but MRF’s initial expectation to export about 2 million tonnes of rice for this fiscal year seems unlikely to be met. The rise of the US dollar value in currency exchange markets is leading to an increase in rice export volumes when compared to the previous financial year, said U Ye Min Aung, managing director of Myanmar Agribusiness Public Corporation (MAPCO) and the general secretary of the Myanmar Rice Federation (MRF). Myanmar, which has no well-established export market for rice apart from China, has been left with a growing surplus of unsold paddy, since the increase in Chinese cross border crackdown on illegal rice trade.
Myanmar has shortcomings that need to be overcome to restore high level of rice exports. A potential export agreement with the Philippines in 2015 fell through, mainly because Myanmar rice proved too expensive and so the Philippines decided to make a deal with Vietnam instead. Attempts to renew a memorandum of understanding with Indonesia are still under way and have not yet finalised. U Khin Maung Lwin, deputy secretary at the commerce ministry, told the press last year that the government was pursuing exports to the EU and Indonesia, and trying again to form an agreement with the Philippines too and he was hopeful that it would not take long for the agreement to finalise with Indonesia. Since China is beginning to thoroughly examine rice being exported across the border this year, exporting rice across the border area is on the decline. In the past, annual rice exported through the border area was more than 900,000 tonnes. This fiscal year, the cross-border export was only 600,000 tonnes and 100,000 tonnes through shipping containers, said U Toe Aung Myint, permanent secretary of the Ministry of Commerce. Myanmar legally exports to China through shipping on the basis of a quota system since the year 2014-15. According to the legal contract, the volume of exports is nearly 200,000 tonnes and the signing of new contracts this month will be in tune of 100,000 tonnes. However, exports according to the contract can only take place in the upcoming fiscal year.
But all is not lost for Myanmar’s rice sector. With the ever strengthening US dollar against Burmese kyat this year that rose substantially to K1400 has encouraged the rice exporters to export more rice. Myanmar exported 1.473 million tonnes of rice last fiscal but this year’s export has reached about 1.498 million tonnes, roughly totaling US$700 million. The MRF believes that the rice sector can reach US$1 billion by 2020 from the current levels if the sector can grow and increase its revenues by focusing on quality and exporting qualified rice instead of just looking to boost the quantity of exports.