Farmers risk losses as rice price drops
As paddy prices plummet in Yangon on weak demand, farmers and traders warn that the market could be damaged as a result.
‘Some [farmers] are [already] harvesting paddy but there are no brokers to buy it.’
Ko Myo Win Farmer
PADDY prices in the capital are falling on weak demand and the drop risks damaging the market, farmers and traders said.
The market price for 100 baskets of stored manaw thukha paddy in Nay Pyi Taw was almost K850,000 in September, but has since fallen to around K600,000, U Nay Soe, a rice seller in Pyinmana township, told The Myanmar Times.
Rice merchants in Myanmar’s capital facing lower prices for stored paddy are in turn lowering the price at which they are buying newly harvested paddy from farmers. The price for 100 baskets of monsoon paddy harvested this month is only K400,000, say farmers – much less than last year.
Nay Pyi Taw farmers hoping to sell fresh paddy are worried because when the price of 100 baskets falls much below K500,000 they risk losses.
“An acre of paddy costs at least K200,000 to K250,000 for seeds, harrowing, harvesting and wages,” said local farmer U San Win, adding that an acre produces perhaps 60 or 70 baskets.
This puts the cost of producing 100 baskets of paddy across a fairly wide range of K280,000 to K410,000. In order to be confident of making any kind of profit, the market price needs to be at least K500,000, said U San Win.
But demand from China, the main destination for most of Myanmar’s milled rice exports, has crumbled recently. Senior figures in the Myanmar rice industry say the drop is down to China’s attempt to clamp down on illegal cross-border trade.
Local rice miller Ko Nay Soe said that because China is not importing rice the market is almost entirely local. Millers buy paddy from farmers, and sell the finished rice to traders that export to China. But with Chinese demand weak millers are buying much less paddy than usual, said Ko Nay Soe.
The latest monsoon crop has only just started being sold, and the supply of new paddy will be plentiful in November and December. With demand weak the market is already in bad shape. If Chinese demand continues to slump then paddy prices will be in even worse shape in December, said Ko Nay Soe.
“Some [farmers] are [already] harvesting paddy but there are no brokers to buy it,” farmer Ko Myo Win from Aye Chan Thar village group in Lewe township said. Merchants selling paddy stored from earlier in the year are not faring much better. October typically sees high prices for stored paddy, as supplies from the previous harvest start to dwindle. But with the price for 100 baskets of stored manaw thukha paddy at around K600,000, merchants are making almost no profit on the price they originally paid, said Ko Myo Lin Aung, who stores paddy in Pyinmana township.
Consumers are benefitting however, with the price of a bag of milled manaw thukha rice on the local market falling from K28,000 in September to K20,000 this month. U Ba Gyi, a farmer in Kyoonoo village in Pyinmana township, notes that the prices of other crops is also down relative to earlier in the year. Industry insiders say that Chinese border authorities have tightened controls over the import of a range of agricultural products including maize, sugar and beans.
“The price of beans and corn is also falling,” said U Ba Gyi. “Farmers are disappointed.”
Corn prices in Nay Pyi Taw are less than half what they were at this point last year. The price of a basket of black sesame beans has fallen from a high of K60,000 this year to between K35,000 and K45,000 depending on the quality.
Mung beans are down from a year high of K30,000 a basket to between K20,000 and K25,000.
– Translation by Khine Thazin Han
Farmers plant rice in a paddy field.