Floor price set for rice as demand plummets

The price per pack of long grain rice has been set at a floor of K19,500, said U Aung Than Oo , president of Myanmar Rice and Paddy Traders’ Association. Traders arrived at the decision on Monday.

Prices dived to around K19,000 per pack after the EU in January reinstated tariffs on rice imports from Myanmar and Cambodia. Meanwhile, demand from China has also tapered. At this time last year, long grain rice prices were trading at K26,000 per pack.

“The rice market has cooled because the EU resurfaced the import tariffs and traders are seeing lower demand from China at the border. As such, stockpiles of rice have been accumulating domestically, prompting us to purchase these inventories at a minimum price,” U Aung Than Oo said.

“Right now, most traders believe rice prices will continue falling in the future so they have stopped buying rice. We have set a floor price to contain the fall in prices,” he added.

Long grain rice, or 90-day rice, is mainly harvested in Ayeyarwady and Bago. Since the start of the year, stockpiles have accumulated at the Rice and Paddy Wholesale Depot in Ayeyarwady, said U Kyaw Naing, a local trader.

For the industry to be more sustainable over the long term, traders are lobbying for China to raise its official rice import quota from Myanmar to 400,000 tonnes annually from 100,000 tonnes currently.

According to data from the Ministry of Commerce, over 50 percent of Myanmar-produced rice is sold to China via the border.

Myanmar exported 1.7 million tonnes of rice and broken rice worth US$ 578 million between April and December last year, according to the Ministry of Commerce. Around 52pc was exported by sea, while the rest was sold at the border to China.

At those levels, rice exports have decreased by over a third from 2.5 million tonnes worth US$780 million in the same period the year before. The main reason for the recent fall in exports is lower demand from China.

Source: Myanmar Times

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