Investments, Solutions Needed on Back of Black Bean Price Collapse

Despite efforts to support the local bean industry after India imposed harsh restrictions on imports from Myanmar, businesses along the entire black bean supply chain have taken a hit and more investments are needed to support ailing farmers.

While demand for mung beans and pigeon peas from China, Nepal and Pakistan has been able to fill the void left by India, the price of black beans has fallen sharply since the restrictions were announced in August.

Currently, the price per basket of black beans is K16,500. In 2015, the price was K72,000 per basket. Farmers in Bago and Ayeyarwaddy, which sow the largest volumes of black beans in the country, are the worst affected.

To mitigate the fallout, the government has attempted to raise local consumption of black beans and encourage farmers to plant other crops. Already, land reserved for the sowing of black beans in the 2017-18 fiscal year will be halved from 2.6 million acres to 1.3 million acres.

U Aung Mgg, Deputy Director General of the Department of Consumer Affairs under the Ministry of Commerce, said while it has been possible to find new markets for Myanmar’s mung beans and pigeon peas, “as 77 percent of the country’s black beans is exported to India, the import ban is like a lost market,” he said.

The way he sees it, the best solution for farmers and businesses along the black bean supply chain is to switch crops. ‘’Nowadays, the market is changing. We can no longer cultivate the crops first and then find a market for that crop later.

We have to see what the market demands and shift to planting the crops that are most in demand,” he said.

Unfamiliar crop

But black bean farmers said they face difficulties switching to different crops. For one, sourcing for new seeds has been a challenge, while many are reluctant to change crops due to uncertainty of success and sourcing for new export markets.  As a result, farmers said they prefer to continue cultivating black beans even though current prices barely cover the cost of production.

“I am sure not more than 10pc of the black bean farmers have switched to planting alternative crops. We don’t think diversifying is the right solution. In addition, many have already invested time and money towards reaping a successful yield of targeted crops like black beans,” said U Thein Aung, president of the Freedom of Farmers League.

‘’Even if the India still bans black bean imports, we can use the beans as animal feed because we face difficulties in shifting to unfamiliar crops,” he said.

Whatever the case, efforts are currently still ongoing to diversify into alternative crops and export markets to reduce Myanmar’s reliance on India. For now though, “the impact of India import ban on the black bean business will be negative for the coming harvest as we don’t know how much the price of black beans will fall by,” said U Aung Htoo, deputy commerce minister.

In the meantime, more investments are needed to find the right alternative crops as well as raise the quality of existing crops to make them more attractive in other markets.

Import restrictions

The Foreign Trade Department under the Indian Ministry of Commerce and Industry first said it would limit the import of black beans and mung beans from Myanmar to 300,000 tonne per fiscal year on August 21. That came after it announced a 200,000 tonne import limit on pigeon peas on August 5.

There had been no such restrictions in the past.

Of the four main bean exports from Myanmar, India imposed restrictions on black beans, pigeon peas and mung beans. During the 2016-17 fiscal year, Myanmar exported a total of 185,000 tonnes of pigeon peas, 562,000 tonnes of black beans and over 400,000 tonnes of mung beans to India, according to the Myanmar Pulses, Beans, & Sesame Seeds Merchants Association.

As of last year, India was the top importer of Myanmar beans. It normally imports more than 600,000 tonnes of beans per year. China is the second largest importer, followed by Oman and Indonesia.

The restrictions were imposed due to a surplus in the production of Indian beans in 2017. “India’s normal production of beans is around 16 million tonnes per year and they have imported 4 million tonnes in the past two years. But this year they produced more than 22 million tonnes and after importing 4 million tonnes from Myanmar, they now have a surplus of 8 million tonnes on hand. So, they will cut imports of Myanmar beans for at least another two years,” U Aung Mgg explained.


Source: Myanmar Times


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