Business

Authorities Vow Probe as Ivory Coast Destroys ‘Unfit’ Myanmar Rice Shipment

By Kyaw Hsu Mon 18 April 2019

NAYPYITAW—The country’s rice industry received bad news this week when it came out that officials in Ivory Coast had destroyed 18,000 tons of rice from Myanmar on Wednesday. The Ministry of Commerce and the Myanmar Rice Federation (MRF) said they would investigate the incident and publicize the results soon.

On Wednesday, the African News republished a report by BBC Africa that quoted health officials in Ivory Coast as saying they had destroyed tons of rice that had been declared unfit for human consumption.

In the report, which included photos, they pointed out that the destroyed rice had come from Myanmar. In the photos, a truck can be seen dumping rice into a landfill.

According to the report, the rice shipment had been denied entry to other ports in West African countries including Ghana, Guinea and Togo due to quality issues.

Within hours of the report appearing, the destroyed rice issue had become the talk of the town in Myanmar. U Khin Maung Lwin, assistant permanent secretary of the Ministry of Commerce, told The Irrawaddy on Thursday that the ministry will check with exporters, the MRF and third party inspection agencies about what happened prior to the shipment’s departure for Africa in October last year.

“We received messages from that ship in March, before it took the rice to Ivory Coast, that it would return to Myanmar with some 18,000 tons of rice because it couldn’t unload it in Togo. We had been asking them to return to Myanmar since March, but they dropped the shipment in Ivory Coast [despite saying they would return], and [this incident] happened,” U Khin Maung Lwin said.

The shipment left Myanmar with 22,000 tons of rice in October 2018. After dropping 4,000 tons of rice in Togo, the crew was unable to offload the rest of the rice in other African countries as it had spoiled.

“Here rice exporters normally export rice using the FOB [Free on Board] system, which means that after sending the rice, they are not responsible; buyers are responsible for the issue. However, we will scrutinize what happened so it does not happen again,” U Khin Maung Lwin said.

U Ye Min Aung, secretary general of the MRF, the country’s largest rice association, posted on his Facebook account that the federation will scrutinize all the facts and data about what happened in Africa.

He wrote that the African market for rice is very competitive as many other countries such as India, Pakistan and Vietnam also ship rice there. The process of exporting Myanmar rice to Africa is somewhat complicated. Rice exporters normally make contracts under the FOB system with buyers outside Myanmar. When the buyers can’t sell that rice on time to their target market, the rice can be in storage for a long time on the ship.

That can leave the rice unfit to consume. In this case, U Ye Min Aung posted that the fact that the shipment had been delayed and passed through four countries could be the major reason the rice was unfit to consume. He said that the buyer is responsible in most cases.

Soe Tun, a member of the MRF’s Central Executive Committee and CEO of the Ayeyar Mittar Public Co., told The Irrawaddy that the long storage period was the major problem in this case and he didn’t think the problem was connected to the use of chemicals.

“We have been exporting rice to Africa for a long time, but the rice exported there is low quality because of the low price. I think this has become an issue,” he said.

He said he heard a ship had been facing problems for the past three months while stopping over in an African country as the rice weight had been reduced. He said it could be caused by a moisture problem.

“The MRF will be checking this issue and will make a public announcement soon. Yes, it is time to issue a caution on how to produce the best quality rice by using technology,” he said.

According to Soe Tun, Myanmar exports rice to Benin, Cameroon, Congo, Ghana, Kenya, Mozambique, Ivory Coast, Senegal, Sierra Leone and Togo in Africa. Of the total rice exports of 2 million tons this year, 700,000 tons went to Africa. Some 1 million tons was exported to China through border trade.

However, this is not the first time an African country has rejected and destroyed Myanmar rice. A similar problem was experienced five or six years ago, rice industry sources said. Due to the highly competitive situation, Myanmar could lose market share, they said.

“Some established international traders can easily push out new traders if they want to manipulate the market. However, we must be aware of this and control our quality as well,” an experienced rice expert told The Irrawaddy.

The MRF said that it would first contact the BBC and African News to ask them how they received the information they reported.

The MRF said it is attempting to promote Myanmar rice as a good quality product among exporters and third party inspection agencies before exporting. It will also make an effort to contact end buyers apart from other traders.

Myanmar was once known as the “rice bowl of Asia” and was a major industry player until decades of economic mismanagement by successive military regimes sent exports tumbling.

Exports have been shipped to 64 countries including China and Japan, as well as other nations in Asean, Europe and Africa, since 2014.

In 2014, Myanmar experienced a similar issue when China officially banned rice imports from this country, demanding that a trade agreement be signed guaranteeing that most rice is milled and meets certain quality standards. China has long been one of Myanmar’s biggest customers for rice, much of which is harvested in the Irrawaddy Delta and shipped over land borders in Shan and Kachin states.

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