Officials arrested more rice and cooking-oil wholesalers in Yangon as the regime continues a crackdown on alleged price gouging and market manipulation that economists warn will only cause more harm.
Two business owners at Wartan rice wholesale center in Yangon were arrested last weekend for allegedly selling subsidized cooking oil above the price the regime sets.
To control high cooking-oil prices, the regime supplies a daily quota of the staple to wholesalers at subsidized prices. They are required to sell it to retailers at prices set by the regime.
The two wholesalers who were arrested received a monthly quota of about 195 barrels of subsidized cooking oil each, according to the junta-controlled Yangon Region government. They were required to sell it to retailers at 5,400 kyat per viss (1.84 liters). However, they sold the subsidized cooking oil to a retailer for 6,500 kyats per viss, officials said. They also allegedly bought subsidized cooking oil from other wholesalers at 5,800 kyat per viss and resold it to retailers at prices above the rate set by the regime.
Wartan rice wholesale center sells rice from Ayeyarwady Region. One of the wholesalers arrested is the top rice dealer in the region’s Bogale Township, a businessman at the wholesale center said.
“He is also a cooking-oil dealer. He was arrested on the weekend after someone filed a complaint against him,” the businessman said.
An official from the Consumer Affairs Department under the junta’s Commerce Ministry has initiated legal proceedings against the two wholesalers for allegedly violating the Essential Supplies and Services Law, according to the Yangon Region government.
The Commerce Ministry’s Supervisory Committee on Import, Storage and Distribution of Edible Oil sets reference prices for subsidized cooking oil based on proximity to Yangon. Prices rise as the distance from Yangon increases. Selling subsidized cooking oil at prices above the reference rate violates the Essential Supplies and Services Law.
Teams of junta personnel made surprise checks on rice and cooking-oil shops in townships of Yangon following the arrest of the two wholesalers, business owners told The Irrawaddy.
The regime has also imposed price controls on rice, which vary depending on the variety of rice. Merchants say they lose money if they sell at the regime’s prices. Consequently, many mix premium and low-quality rice to prevent losing money.
One retailer, speaking on condition of anonymity, said some customers will pay higher prices for unmixed premium rice, but added that retailers only sell higher-priced rice to customers they know. “It’s like a black market … We only sell to regular customers at higher prices, but lately we don’t sell at higher prices [even to regular customers] due to the risk of arrest,” the retailer said.
Price controls on rice range from 70,000 to 145,000 kyat per 48-kilogram sack, depending on the quality of the rice.
The reference rate for subsidized cooking oil has been 5,485 kyat per viss since Monday. Non-subsidized cooking oil sells for 13,500 per viss in the market.
Shoppers say it is very time-consuming to line up to buy subsidized cooking oil.
A homemaker in Yangon explained: “We can buy cooking oil at the reference price if we line up, but it takes a lot of time. There are even line-sitters now. Sometimes, the cooking oil sold in markets is not good quality. We can buy high-quality oil in the market, but the price is high.”
Economist Romain Caillaud warned this week that the junta’s “coercive and controlling approach to the economy does not bode well for Myanmar’s mid- to long-term [economic] prospects.” He said the junta’s crackdowns have “backfired,” explaining that they motivate businesses to “either stop or hide their activities, leading to heightened scarcity and … soaring prices.”
In late June, the regime interrogated rice millers in Bago and Ayeyarwady regions as well as Myanmar Rice Federation chairman U Ye Min Aung in late June. The junta-controlled Directorate of Investment and Company Administration has also blacklisted eight companies for failing to comply with regulations on cooking oil import and distribution. The eight companies are: Ayeyar Hinthar Trading (owned by crony Zaw Win Shein), Six Winner Brothers, Diamond Dragon, First Top Edible Oil, Thin Than Yadanar, Jewel Arrow, Argi One Trading and Grand Unity.
