Local Rice Prices Climb Ahead of Chinese New Year
By Kyaw Hsu Mon 2 February 2016
RANGOON — Due to high demand on the eve of the Chinese New Year, traders are selling more rice on the China border instead of within Burma, causing the price of the staple grain to rise at home.
Higher demand from China, Burma’s biggest rice buyer, is directing more rice exports through the Muse-Ruili crossing on the Shan State-China border in preparation for the upcoming Chinese New Year, which begins on February 8 and will last for two weeks.
With more stock diverted to China, some markets have raised rice prices for local consumers. In areas of Arakan and Mon states, residents reported that the cost of a standard basket of rice increased 500-1000 kyats (US$0.40-$0.80). A rice basket in Mon State holds 16 pyi, or just over 40 liters, and previously cost 14,000-15,000 kyats ($10.80-$11.60).
“There is high demand in the market these days, and though we’re looking for more rice, the supply and demand do not match. That’s why a basket of rice is going up more than 500 kyats,” said Kyaw Kyaw Lwin, a rice trader in Mon State’s Kalathut village.
Dr Soe Tun, Vice Chairman of the Myanmar Rice Federation, estimates that about 4,000-5,000 tons of rice are being routed through the Muse-Ruili trading hub every day. Like Kyaw Kyaw Lwin, he linked this to a temporary five to ten percent rise in prices within Burma.
“Demand in China is getting high. That’s why rice prices have increased a little bit, but I can say that it will go down again in the next few days,” he said.
Merchants began directing more rice through the Muse-Ruili trading hub during the last week of January. Chan Tha Oo, a rice trader in Muse, confirmed that the greater demand for rice from the Chinese side of the border became evident late last month. This resulted in an increase in rice prices in border areas by 500-600 kyats, raising the cost of a 50-kilogram rice bag to almost 29,000 kyats ($22.50).
But as official holidays begin in China, Chan Tha Oo said he believes trade will soon come to a halt.
“The Chinese stop trading three or four days [ahead of the New Year],” he explained.
Despite increased exports, he added there was no shortage of rice, and therefore no need for people to worry, a claim echoed by Dr. Soe Tun.
“Summer’s paddy [harvest] has not yet surfaced in the market, so we’re still consuming old rice. It will be okay later,” he said.
Figures from the Ministry of Commerce put Burma’s total rice exports at more than 1.7 million tons in the 2014-15 fiscal year, bringing in nearly US$645 million. Rice was shipped to China and Japan, as well as over 60 countries within ASEAN, Africa and Europe.