March 23, 2015

23/03/2015: China, Myanmar struggle to formalize rice trade

Myanmar's battered rice industry, once the world leader, is steadily reviving, thanks largely to booming but unregulated exports to China. The Nikkei Asian Review reports

But recent fighting in Myanmar's northeast border regions threatens to undermine the momentum that has taken hold since the administration of President Thein Sein launched ambitious reforms in 2011.

Nearly 80 percent of Myanmar's revenue from the rice trade comes from exports to China, and efforts are underway to draw up a legal framework between the two countries to oversee this trade.

Myanmar exported a total of nearly 915,000 tons of rice, worth $343 million, in 2014. Of that, $274 million was from rice exported to China, according to Myanmar's Ministry of Commerce. But as far as China is concerned, the amount is nil.

Due to the lack of a formal framework for rice trading between the two countries, these exports are not recognized by China. This policy anomaly has to an unusual situation: The Myanmar government points to increased rice shipments to China as a sign of agricultural and economic growth, but once shipments reach the Chinese side, they not only go unrecorded but also risk being seized as illegal.

Paperwork quirks aside, Myanmar's rice exports have been on a steady climb since it loosening of trade regulations in 2011. In the year through March 31, Myanmar exported 136,000 tons of rice to China. That figure jumped to 752,000 tons in the following fiscal year.

Once the leading global producer rice, Myanmar's output deteriorated badly under decades of military rule. With efforts underway to bring the trade with China above board, there are hopes domestically that Myanmar can reclaim the No. 1 spot, a publicly stated goal of the Thein Sein administration.

But experts have cautioned that increased trade with just one country, even one as large as China, is unlikely to be enough to vault Myanmar back into the ranks of the world's top exporters.

Read more HERE.

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