Myanmar

Monitoring the agri-food system in Myanmar: Rice Millers – November 2021 survey round

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In November 2021, we surveyed 392 medium- and large-scale rice millers from major rice-growing regions of Myanmar to learn more about the impacts of the COVID-19 crisis and political instability. This report presents important results and analysis from those interviews.

Key findings

▪ Mill activity increased in November as paddy harvesting began. However, monthly throughput among active mills is 11 percent lower than in the same period in 2020. Looking back over the monsoon production season (April-September), reported throughput was also 13 percent lower than in 2020. Looking forward, 57 percent of millers expect lower monsoon harvest season throughput (Oct-Jan) in 2021 relative to 2020, and two-thirds attribute the expected decline to lower paddy harvest volumes in their areas.

▪ Challenges in the banking sector continue to be salient. Nearly half of interviewed mills report disruptions in making payments for paddy or receiving payments for rice, and 52 percent of mills consider banking disruptions as the most severe. As a result, mills are heavily reliant on cash. Inperson bank transfers increased for rice sales transactions relative to September but are still far below half of their 2020 level.

▪ Sixty-three percent of millers reported increased transportation costs. The average price to transport a bag of rice to Yangon increased by 22 percent in November 2021 compared to November 2020 and reported diesel prices are 72 percent higher than last year.

▪ Emata paddy prices and milling margins continue to be remarkably stable during this tumultuous time and there are no apparent major price disruptions at the farm or mill-level for Emata rice varieties. Prices declined in November 2021 relative to September following the influx of paddy from monsoon harvests. However, prices of Pawsan rice varieties are 25 percent higher than a year ago. Further, rising transportation costs and a decline in milling throughput will likely lead to higher consumer rice prices for all varieties. Given the huge importance of rice in diets, together with income and employment declines, rice price increases will have outsized negative effects.

Recommendations

▪ Credit guarantees to enable banks or MFIs to expand working capital to the milling sector should be considered to ensure the financial viability of rice milling.

▪ Easing transport restrictions, stabilizing fuel prices, and continued operation of export markets would bring much needed stability to rice markets while relaxing the financial and production constraints that millers are experiencing.

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