Myanmar Suspends New Rice Export Licenses to Ensure Domestic Supply Amid Virus Outbreak


2020-04-01
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myanmar-chin-women-rice-drying-march-2020.jpg Ethnic Chin women smoke while rice dries under the sun in a village in western Myanmar's Chin state, March 3, 2020.
AFP

Myanmar has stopped issuing rice export licenses following the declaration of the coronavirus as a pandemic, but will honor existing licenses, the head of an industry group said Wednesday, as local merchants warned that hoarding could threaten domestic supply.

Soe Tun, executive member of the Myanmar Rice Federation, told RFA’s Myanmar Service that the government placed a moratorium on rice export licenses after the World Health Organization (WHO) labeled the virus a global threat in mid-March, suggesting the move had been made to protect domestic rice supplies.

“The issuing of [export] licenses is currently stopped—it’s been about two weeks now that no licenses have been issued,” he said, adding that existing licenses will be permitted to export the grain for the remainder of their six-month validity.

“Usually, we produce 13.5 million tons per year. We consumed more than 10 million tons and there is an estimated 3 million tons left. So, we will export 2.5 to 3 million tons and it is very unlikely we will face a shortage for domestic consumption, as long as we control exports.”

Myanmar exports rice to more than 50 countries, with some 40 percent of exports going to China.

The country set a rice export target of 2.2 million tons for the current fiscal year and some 1.4 million tons have been exported over the last five months, according to Soe Tun.

Rice trader Nay Lin Zin told RFA that targets for exports are generally sufficient to ensure there is enough rice to meet domestic demand, but said the government had to step in to protect against panic buying. Myanmar confirmed its 16th patient testing positive for COVID-19—the disease caused by the coronavirus—in about a week on Wednesday, a day after announcing the country’s first related death.

“Normally we have enough for domestic consumption, but [the government] needs to control excessive exports,” he said.

A total export ban could “lead to a price hike on commodities while COVID-19 batters the economy” but create difficulties for farmers once the price of rice drops, Nay Lin Zin said.

“In order to avoid such a situation, and at the same time to maintain domestic demand, the export limit has been set to 100,000 tons per month.”

The government, meanwhile, is maintaining around 15,000 tons of rice reserves and plans to procure an additional 100,000 tons, he said.

“There will be no shortage of rice unless people begin panic buying,” he warned.

“Panic buying could trigger a problem and things could change for the worse. So, people need to refrain from panic buying and should buy only according to their needs. They can buy anytime they want.”

The Myanmar Rice Federation and other industry groups have also appealed to merchants to maintain rice prices, while the commerce ministry has warned that it will take action against anyone involved in price gouging.

‘Business as usual’ in Laos

In neighboring Laos where, as of Wednesday, authorities had reported 10 confirmed coronavirus cases, an official from the country’s Industry and Trade Ministry told RFA that the outbreak would not impact exports because of sufficient reserves already in place to meet domestic demand.

“Importers are importing rice as usual, and exporters are also carrying out business as usual,” said the official, who spoke on condition of anonymity.

An official from the Ministry of Agriculture and Forestry, who also declined to be named, echoed the Industry and Trade Ministry official’s comments, adding that Laos has “rice enough for our needs.”

“There is no rice shortage at the markets throughout the country,” he said.

“The Ministry of Industry and Trade has a large rice reserve,” the official added, saying that the government will sell rice from the reserves in the event of an inadequate domestic supply.

But a rice trader in the capital Vientiane told RFA Wednesday that the domestic rice market is already starting to suffer an impact from the outbreak, noting that prices on imported rice from Thailand and Vietnam have recently skyrocketed.

With borders closed to prevent the spread of the virus, the trader said, people are also regularly purchasing two or three bags at a time, although rice remains available at local markets.

“The border with China is closed and Chinese rice is no longer coming in,” he said. “Rice is selling quickly, because people are buying and stocking rice.”

Rice production in Laos was severely affected by floods last year, which destroyed a total of around 100,000 hectares (250,000 acres) of rice fields in all six southern provinces.

The country’s farmers produced only 3 million tons, down from a target of more than 4.1 million tons, prompting several provincial governments to put portions of their rice reserves on the market.

Operating out of caution

While officials in Laos appeared confident that the country will not face a rice shortage amid the outbreak, Myanmar’s decision to limit exports follows a temporary suspension of rice exports last week by Vietnam’s government until May to ensure that domestic prices remained stable as a second wave of the coronavirus hit the country.

On Tuesday, Vietnam’s Ministry of Industry and Trade proposed allowing the resumption of exports of rice, but under strict monthly limits, in an aim to keep as much money as possible flowing into the country during the coronavirus crisis while simultaneously ensuring food security.

According to the reports by the Ministry of Agriculture and Rural Development, about 6.5 million tons of rice has been tabbed for export this year, but the trade ministry suggested that Prime Minister Nguyen Xuan Phuc approve about 800,000 tons of rice exports in April and May, with the ministry strictly controlling the export volume.

According to Vietnam’s state media, as of Wednesday there were 218 confirmed cases of COVID-19 in the country, with no deaths.

Bloomberg News quoted Bangkok-based David Dawe from the United Nations’ Food and Agriculture Organization (FAO) as saying that countries are limiting exports “out of an abundance of caution.”

“They just want to make sure that they have enough supplies for themselves,” said Dawes, who is also a writer on rice economics.

Reported and translated by RFA’s Myanmar Service and Lao Service. Written in English by Joshua Lipes.

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