China lobbies to legalise rice trade

The world’s most populous nation is increasing its imports of Myanmar rice each year, but from Beijing’s point of view the imports are illegal as there is no sanitary and phyto-sanitary agreement on rice standards between the two countries.

China’s commercial attaché at its Yangon embassy visited the Myanmar Rice Federation’s (MRF) office on July 14 to ask the organisation to push for an agreement, said MRF joint secretary U Lu Maw Myint Maung.

“The Chinese side wants to make the market official, from being illegal,” he said. “But the Myanmar side needs to meet the requirements to make the market official.”

Informal border rice exports to China reached 747,000 tonnes in 2013, about 60 percent of the 1.28 million tonnes exported in the year. In 2011, there were only 6000 tonnes in rice export to China, according to a June report by the World Bank.

Myanmar rice traders have said they are aiming to capitalise on growing demand in China, particularly as Beijing’s relationship sours with Vietnam over the South China Sea. Vietnam is one of the largest exporters to China.

Although exports to China are legal from Myanmar’s point of view, Beijing requires a sanitary and phyto-sanitary agreement guaranteeing health standards. Cambodia signed a similar agreement with China in 2010, which allows the country to export officially, but requires its milled exports to follow Chinese plant quarantine rules, including being certified free from particular pests through a third-party inspection.

U Lu Maw Myint Maung said that Myanmar will need to ensure its rice exports do not have disease or pests as part of an agreement with China.

Experts have highlighted the need to formalise a sanitary and phyto-sanitary agreement with the People’s Republic to grow the industry.

World Bank agricultural economist Sergiy Zorya told The Myanmar Times in an exclusive interview last month that Myanmar needs to meet Chinese standards to sign an agreement. He added that Vietnam is a “very price competitive seller” to the world’s most populous nation, and China will likely think pragmatically about where it imports from, particularly if prices for the staple crop rise.

Still, some private sector officials expressed frustration there is no deal.

The Myanmar government has said for two years they are trying to get an agreement with China, but “there is no tangible result,” said U Soe Tun, another joint secretary at MRF.

“One ministry always says that another ministry has responsibility for the issue. The Chinese side has now approached Myanmar’s private sector to urge the government to take responsibility,” he said, adding the Ministry of Irrigation and Agriculture is responsible.

While officials from that ministry were not available for comment, Commerce Ministry economic advisor U Maung Aung said that ministry has been negotiating with Chinese officials on the issue directly since last year.

Legalising rice exports requires not just negotiating with Beijing officials, but also provincial officials as they often have different rules, he said.

“The [Myanmar] minister of commerce himself has negotiated to make the rice market with China official,” he said.

MRF chair U Chit Khaing told The Myanmar Times that the MRF is urging the Ministry of Agriculture and Irrigation to negotiate with Chinese officials to legalise the market.

Chinese embassy officials had not returned a request for comment as of press time.


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