Burma to Coordinate Growing Rice Exports with Thailand, Vietnam

By Patrick Boehler 14 March 2013

RANGOON—Rice industry leaders from Burma, Thailand and Vietnam met in Rangoon on Wednesday in a first attempt to coordinate Burma’s rapidly growing rice exports with two of the world’s largest rice exporting countries.

The Myanmar Rice Federation (MRF) has joined its Thai and Vietnamese counterparts, who already have a framework to communicate on sales and trading rumors, as Burma aims to return to being among world’s largest rice producers, a position held half a century ago before military rule thrust the country into isolation.

“We can learn from them and improve our rice’s quality. We can be the biggest exporter of rice again,” said the MRF’s Vice-President Sein Win Hlaing. After export restrictions were eased in recent years, he said, “We need to educate farmers and use better equipment.”

A fourth of Burma’s economic output comes from the farming sector, according data by the Ministry of Agriculture and Irrigation from 2011, the most recent available figures. Agriculture then employed 61 percent of the national workforce. The country’s overall GDP stood at US $45.4 billion in 2010-2011, according to IMF figures.

Rice exports have almost tripled in the last three years, according to data presented at the forum, and are poised to reach 1.4 million tons in the current fiscal year, which ends in April.

Only two years ago rice exports stood at a mere 537,000 tons. Ye Min Aung, the MRF’s secretary general, said he expected rice exports to reach two million tons in 2014 and four million tons in 2019.

The Myanmar Rice Association was formed last year. It united the farmers, millers and traders Associations, as well as 223 rice-trading companies. With Thursday’s meeting, it officially joined the previously bilateral rice trade forum between Thailand and Vietnam in 2006.

“Rice is the one crop that is politically very sensitive. It still can topple the government,” said Tin Htut Oo, consultant and former director-general for agricultural planning at the Ministry of Agriculture.

“The objective of the trilateral co-operation is making us the kitchen of Asean and the world,” he said. “We don’t have to reduce each other’s market share; we can conquer the world market together.”

Burma has a long way to go to take over the other two rice major rice producers in Southeast Asia. Vietnam exported 7.7 million tons last year according to the Vietnam Food Association, almost eight times as much as Burma aims to export in six years time. Thailand exported around seven million tons, according to an estimate by the Thai Rice Exporters Association.

While Burma’s export has surged, Vietnam’s and Thailand’s output are facing challenges. In Thailand, government regulations have pushed up rice prices, reducing exports by more than a third last year. In Vietnam, urbanization has shrunk cultivation areas in the two main plantation areas, the Mekong and the Red River deltas.

Burma’s overall production stood at 13 to 14 million tons of milled rice in the current fiscal year, of which a surplus of two to three million could be exported, the MRF’s Ye Min Aung estimates. Vietnam’s total rice output last year reached 44 million tons, while Thailand’s stood at 37 million tons.

“Insufficient electricity supply and power outages are posing great and tremendous threat to the growth of the country’s rice industry,” said Ye Min Aung, adding that some rice producers are starting to address the problem with local biomass power generation.

Border trade with China has for the first time surpassed Burma’s shipped exports of rice in July last year, Ye Min Aung said. “This year marks the highest border trade in history,” he said. “Helping the border trade will significantly benefit our rice producers.”

“Normally the government encouraged overseas trade,” said Sein Win Hlaing on the sidelines of the trilateral talks. “China is the world’s biggest producer of rice, but they need large amounts of our rice.”

“We export it legally on our side, but I don’t know if they import it legally on their side,” he said. “It is difficult to export to China. Mostly there are illegal importers. They do not inspect quality or anything.”

Within Southeast Asian, governments still had a long way to go to pave the way for an Asean regional free-trade zone envisioned in 2015, the president of the Thai Rice Exporters Association Korbsook Iamsuri said. “Until we change laws that prohibit the import and export of seeds, I think the (Asean Economic Community) will not be implemented,” she said.

However, Thai rice producers have already invested in other Southeast Asian countries “accidentally creating an AEC in agriculture. We more or less have accomplished it,” she said. “A few of us have moved into Cambodia, into Vietnam.”