Thai private sector should invest in rice business in Myanmar

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Thailand’s Kasikorn Research Center (KRC) said the Thai private sector should invest in rice businesses in Myanmar after the country has sped up intensive rice production both in terms of quantity and quality.

Myanmar has conducted research and development on rice breeds, agricultural technology and irrigation systems, prompting the country to have continued growth of rice production from 2.35 tonnes/hectare in 2011 to an expected 2.67 tonne/hectare this year, according to the US Agriculture Department. Such figures therefore could result in a boost in rice exports, encouraging Myanmar to possibly become the world’s leading rice exporter.

Thus far, Japan, China, and Singapore are already investing in the rice business in Myanmar, while the United States is conducting a survey for investment on rice breeding research there.

According to the KRC, Myanmar could easily produce two million tonnes of rice for export as targeted this year by Myanmar authorities and three million tonnes in 2015, in the absence of serious natural disasters.

The leading economic think-tank also viewed that Myanmar could become one of the world’s top-five rice exporters, with export quantity of at least five million tonnes, in the next ten years.

Potential Thai rice entrepreneurs wishing to invest in such businesses in Myanmar are advised to invest in rice production lines by applying a reverse integration strategy, such as cooperating with local entrepreneurs to develop and open a modern rice mill and then using Myanmar as a base for exporting rice.

Kasikorn Research Center indicated that over 80 percent of rice mills in Myanmar are still small and utilizing low technology, causing lower rice quality and broken rice grains.

Opportunities for other rice-related businesses include becoming a rice trader in Myanmar for export or selling fertilizer and agricultural machinery and motors.

Consideration on the investment expansion in Myanmar as the Thai rice business is losing its ability to compete on a price basis is another option for Thai entrepreneurs who are ready.

However, obstacles to be faced include, for example, legal processes to set up a rice mill, lack of infrastructure, and power shortages

Source: Pattaya Mall

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