The Myanmar Rice Federation will accept invitations for ten more rice companies to receive permission to export rice to China after the first nine firms it selected were criticised for their lack of experience.
Myanmar Rice Federation joint secretary U Soe Tun said the decision to have a second round of firms came following a request from the Chinese government.
China has quickly grown from being a marginal market for rice exports half a decade ago to today being Myanmar’s most important rice buyer. However, the trade has been illegal from Beijing’s point of view, and negotiations are ongoing to legalise it.
The decision to pre-select a handful of rice traders will allow Chinese authorities to more easily make sure the export rice meets their health standards. After legalising the trade, rice will be exported by the selected firms using ships to China’s eastern seaboard along with the current method of shipping overland through Muse in northern Shan State.
The Myanmar Rice Federation has come under criticism for the nine firms it selected to take part in the trade, drawing complaints in social media and from rival traders that several of the companies were unknowns with little track record in the industry.
One leading rice trader told the Myanmar Times on condition of autonomy that after seeing the initial list, the Chinese side demanded inclusion from more companies with the capability to export large volumes of high quality rice to Myanmar.
“Some of the chosen companies have not even received business registrations,” he said.
Over 100 local companies applied for rice export licences in January, but China had initially requested less than 10 firms receive licences.
The first nine companies were MAPCO, Myanmar Rice Mill, FPR from the Myanmar Rice Traders Association, Golden Land East Asia, MRDC from Mandalay, a company from Yangon’s Bayintnaung commodities market still to be formed, Ayer-Pathein company from Ayeyarwady Region, SPRDC formed by Muse traders and Rakhine Ethnic Rice Company.
U Soe Tun said companies interested in the second round of bidding have until February 27 to submit their applications.
“Criteria for the second round will be the same as the first,” he said.
Myanmar Rice Federation officials previously said they hope the official trade to China to start at the end of April or early May. The chosen companies must register, while having their rice tested and performance measured before the trade can officially begin.
In 2013, Myanmar exported about 1.27 million tonnes of rice, of which about 0.747¬¬ million tonnes went to China. In 2010 the country exported about 0.489 million tonnes, of which 4000 tonnes went to China.
State media reported last week that China’s largest state-run grain-trading company COFCO signed a memorandum of understanding in February on purchasing Myanmar’s rice exports, depending on approval from China’s general administration of quality supervision, inspection and quarantine.
There will also be a business matching event in March for Chinese and Myanmar firms, the report added.
Source: MYANMAR TIMES