The Chinese rice buyers have stopped coming, according to local traders.
The arrest of several Chinese buyers for tax evasion and the weakening Chinese economy is hurting trade with Myanmar’s largest rice export market, said U Soe Tun, vice chair of the Myanmar Rice Federation.
“Exports across the border have slowed,” he said.
China is the destination for over half of Myanmar’s rice exports. This year marks the first time there have been legal rice exports from Myanmar to the world’s second-largest economy, but much of the business is still conducted on an informal cross-border basis through Muse in northern Shan State.
Rice trader U Lu Maw Myint Maung said that 59 rice traders had been arrested for tax evasion by Chinese authorities, leading to a noticeable drop in the trade. This figure could not be confirmed with Chinese authorities yesterday.
“Some Myanmar rice traders are reluctant to make deals because they have not received settlement from their buyers,” he said. “There are still a handful of Chinese buyers in the market, but deals have been slow as their offering price is too low.”
Mandalay traders also say they have seen less demand from Chinese buyers. U Thein Zaw, chair of Mandalay Rice Wholesale Centre, said the market has dried up with the recent arrests, though may pick up in the future.
“However, even though rice stocks have piling up due to a lack of demand from China, we haven’t yet seen the prices fall in the domestic market,” said a rice shop owner near to Aung Taw Mu Pagoda in Mandalay.
U Soe Tun added that it is more difficult to export by ship during the rainy season. In the meantime, Thailand is also selling its surplus rice, which is creating tight competition with Myanmar rice. Thailand is one of the world’s largest rice exporters, along with India and Vietnam.
Although the China trade may have hit a rough patch, Myanmar traders say it offers long-term potential. Traders say they are optimistic demand will return after the monsoon season
U Lu Maw Myint Maung said official exports are likely to continue to China, with the first official exports being shipped in May.
Source: Myanmar Times