Amid the current political situation in Burma, this significant rice supplier in Southeast Asia is set to export its lowest amount in five years, according to the U.S. Department of Agriculture's April 9 "Grain: World Markets and Trade" report.
The turmoil is expected to accelerate the multi-year decline in exports, which has stemmed from reduced production and increased competition from other suppliers.
One year ago, the Government of Burma implemented policies to restrict exports for a few months at the outset of the COVID-19 pandemic. This year, the recent change in government has created significant challenges, leaving much uncertainty about the country’s export potential.
On Feb. 1, 2021, the military overthrew the democratically elected civilian government. The current political situation has caused a plethora of problems which complicate trade.
Traders report difficulties accessing phytosanitary and country of origin certificates as well as challenges accessing financing.
The Ministry of Commerce has waived export license requirements but only temporarily. There are also significant transportation disruptions, both with in-country transit and at ports.
Drivers have had trouble coordinating deliveries amid country-wide communication blackouts.
Thousands of containers have been stuck at port, and rice wholesale centers in Rangoon were temporarily closed due to traffic by protestors and transportation disruptions.
These delays and disruptions are likely to reduce the exports in the near term to markets outside of the region, such as the European Union.
Burma will also likely continue to struggle to export to African markets as low-priced Indian rice continues to dominate there.
With the disruptions at the ports, trade with neighboring China may become more significant in the next few months.
China has been the largest market for Burma over the past several years, and only a few years ago was the destination for more than 80 percent of its exports.
While exports from Burma to China trended lower between 2017 and 2019, they rebounded in 2020. In 2021, China’s continued import demand and proximity along the border may provide a significant nearby market for Burma rice exports.
For more information on how Burma’s coup has affected agricultural trade and grain markets in particular, please see visit https://gain.fas.usda.gov to read recent GAIN reports.