By Nyein Nyein
THE Myanmar Rice Traders Association (MRTA) said it will purchase long-grain rice that matures in 90 days, for which there is currently no demand in the market, at the basic price of K19,500 per bag.
“Starting 8 April, the MRTA will purchase 90-day rice, which has 14-per cent moisture content, at the basic price, using MRTA’s fund and contributions from members as of June,” said U Aung Than Oo, the chair of the MRTA. “The 90-day rice will be bought at the basic rate of K19,500 per bag. Most of the merchants are waiting for prices to drop.
Therefore, we would like to send across the message that the price will not decrease anymore. We will purchase some rice when there is no demand in the market, instead of buying all the stocks to govern the market. The rice will be traded depending on the market price and its quality.
As the floor price has been set at K19,500, the price will not fall below the set rate. Hopefully, the demand will also go up. Warehouse owners may choose to continue storing rice, but the price will not keep falling,”
said U Aung Than Oo. At present, 90-day rice is being cultivated in the Ayeyawady and Bago regions. Rice from the Ayeyawady Region has started entering the Wadan rice depot, according to officials at the depot. Long-grain rice (Indica rice) is exported to China and the European Union via the maritime route.
Rice trade with China through the Sino-Myanmar border has halted as China has been cracking down on illegal entry of goods. Additionally, in a protectionist move, the EU has imposed a three-year tariff on Indica rice from Myanmar and Cambodia, starting 18 January. The EU is levying a tariff of 175 euros per ton in the first year, 150 euros in the second year, and 125 euros in the third year on rice imports from Myanmar and Cambodia.
“The MRTA scaled down rice prices in order to reduce the EU tax rate. As a result of this, traders will earn a lower profit, which will lead to low demand in the market. That rice variety (Indica) was highly demanded by China in the previous year.
This year, it cannot be exported to the Chinese market, resulting in pretty bad sales,” said U Aung Than Oo. “The MRTA has forwarded a request to the government to provide loans to rice businesses, and purchase rice at the basic rate when the price falls,” he said. “The MRTA has asked the government to offer long-term and short-term loans to rice traders, when the price plunges.
However, it will take some time for the government to take action. At present, newly harvested rice is flooding the domestic market.
The price will remain lower than the actual market price, and that should be. Some foreign trade partners manipulate the price and offer a rate lower than the actual export price against other exporter countries, causing chaos in the rice market.
The MRTA has made a move to tackle with the current situation. The federation is also exploring more foreign markets,” he added. “The floor rate of 90- day rice does not cause loss to growers as they only receive a lower profit compared with the previous year.
The MRTA has set the floor price for 90-day rice to allow growers to continue cultivating that variety next year,” said U Zaw Khaing, the joint-secretary of the Wadan rice depot. “We provided technical assistance for 90-day paddy cultivation.
The MRTA will also purchase rice with 90-day yield to maintain the market for the following year. If the market deteriorates, growers will surely reconsider which variety to plant in the coming years,” said U Zaw Khaing. Last year, 90-day rice fetched about K26,000 per bag. With demand low in both the domestic and foreign markets, the price has plummeted to K19,000 per bag, according to the rice market. The 90-day rice is included in the Aemahta rice group, which is shipped to foreign markets. (Translated by Ei Myat Mon)