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Illegal paddy exports putting rice mills out of business

In Mandalay Region, which is one of the main paddy producers of Myanmar, almost every rice mill has shuttered due to illegal direct paddy exports, according to the regional Rice Millers Association.

In Myanmar, direct paddy exports are not permitted. However, Chinese traders have been exporting paddy directly to China after buying the crops from farmers at good prices. As a result, local rice millers have had trouble obtaining sufficient paddy for processing. That has resulted in losses and forced them to halt operations, the association’s chair, U Ngwe Aung, said on October 11.

Livestock owners are also feeling the squeeze. As Chinese traders snap large volumes of paddy, there is less available to be processed into animal feed.

“The Chinese traders export paddy directly to their country. As a result, our mills have been forced out of business. As far as we know, direct paddy export is never allowed in Myanmar. But Chinese traders are now ferrying the crop to their country by the truckload. Everyone knows about it but no action has been taken,” said U Ngwe Aung.

He said the association has already informed the Ministry of Agriculture and Commerce Department, to no avail.

“If this situation continues, the public will also be affected as this will result in a loss of tax revenue for the government. We can’t know how many tonnes of paddy were taken out from the country. They bought paddy from all the farms last year. This year, I think things may worsen,” said U Ngwe Aung.

While the rice mills have suffered from the illegal exports, farmers, on the other hand, are gaining from the rising demand. U Myint Aung, a paddy farmer from Patheingyi township said paddy prices were good during the previous year’s rainy harvest season and prices are still good even before harvest season this year.

“We got good paddy prices last year. Prices are also good even before harvest season this year. So it is good for farmers. Now paddy price is about K550,000 for 100 baskets. When it comes to harvest season, paddy brokers come to paddy fields and offer good prices,” he said.

Still, despite good prices for farmers, if such illegal paddy exports continue, the risk is paddy shortages in the domestic market and an accompanying surge in price, said Mandalay Region Rice and Paddy Traders Association’s general secretary U Sai Kyaw.

If the government wants to allow direct paddy exports, it should make it official with strict supervision, he added.

“Illegal paddy export to China has risen the most in Mandalay Region. Like last year, if it continues happen this year, both livestock farms and millers will have difficulties. Rice traders associated with them may also be affected. This is akin to smuggling as the country also can’t earn tax revenue. The government should manage properly if it is necessary. We want the authorities to do so in this year’s harvest season,” said U Sai Kyaw.

Currently, rainy season paddies have started harvesting in Singaing township and rainy paddies will be harvesting in Ayeyarwady, Sagaing and Bago regions in coming November and December.

“In years when we had good cash flows we used to stockpile as much paddy as we could buy. But we can’t buy this year because paddy prices are too high. Now rice mills have stopped so mill workers are now jobless,” said a rice mill owner Ko Bo Bo from Patheingyi township.

Source : Myanmar Times

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