China’s peanut appetite forces local oil mills to close

Around 90 percent of Myanmar’s oil mills have been forced to suspend business operations due to a chronic lack of peanuts.

Throughout 2014 and 2015, Chinese traders have bought up most of Myanmar’s peanut yield, leaving the domestic market with little in the way of raw materials, said oil millers.

Traditionally, Chinese buyers come to Myanmar for peanuts between January and May, but this year they are still buying in August, they added. The price of peanut oil has risen from K4500 per viss (1.63 kilograms) in June to K7500 per viss, said sources at the Association of Edible Oil Merchants and Millers.

Peanuts planted in November and December yield in March and April and peanuts planted in August yield in November and December.

Last year, monsoon peanuts were sold oversees at K1450 per viss. The price rose to K3750 after the March-April yield and again to K4000 per viss in August, according to the Bayintnaung Wholesale Center.

In the past, local oil millers made deals with farmers and bought their crop in advance. More recently, farmers are selling directly overseas – traders from China are pricing local buyers out of the market, said millers. As a result, business at 90pc of Myanmar’s 2917 oil mills is on hold, they added.

Local peanut farmers say they would like a bigger yield, but that a lack of technology and space is holding them back. “Domestic peanut exports sell at a good price, but the best yielding farms can produce no more than 40 baskets per acre,” said U Maung Maung Lay, a peanut farmer from Tat Kone township in Nay Pyi Taw.

“We can’t grow more than that because our farms are small and we don’t have the technology to increase the yield. Raw materials are rare and expensive,” he added.

In comparison, in neighbouring India, the average peanut yield is 90 baskets per acre. In Vietnam the average crop is between 90 and 100 baskets and in Taiwan it can reach 120 baskets, said U Maung Maung Lay.

The troubles faced by peanuts farmers and oil millers have been amplified by the impact of nationwide flooding, said U Khin Soe, chair of Ayeyarwady Peanut Oil Company.

“Farmers will face difficulties growing peanuts if the government doesn’t offer support. It will not be easy to buy winter peanuts for K1400 per viss like last year. Prices will start at around K2500 and could rise to K3000,” he said.

Source: Myanmar Times

NB: The best way to find information on this website is to key in your search terms into the Search Box in the top right corner of this web page. E.g. of search terms would be “property research report”, ”condominium law”, "Dagon City", “MOGE”, “yangon stock exchange”,"MECTEL", "hydropower", etc.

To learn about the business opportunities in Myanmar click here

To evaluate the various segments of the market that you could possibly enter base on your competencies you can do a Custom Market Entry Strategy Research. You can see a sample report at page "Actual Sample of Client Report”. Click here to go to page.

Do you know that IE Singapore is giving up to SGD 20,000 support for Singapore company to venture into Myanmar? To learn more click here