Global Markets: Rice – Burmese Exports Disrupted Amid Coup

©Debra L Ferguson Stock Photography

Amid the current political situation in Burma, this significant rice supplier in Southeast Asia is set to export its lowest amount in 5 years. 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 February 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.

Food Security Drives Increase in Rice Stockholding in Saudi Arabia and United Arab Emirates

Both Saudi Arabia and the United Arab Emirates (UAE) consume rice as a staple commodity. Neither country produces rice domestically and both are therefore entirely dependent on imports for their rice supplies.

Rice News on AgFax


Both countries have placed a renewed focus on securing rice reserves to prevent impacts from supply shocks such as rice export restrictions or transport and logistics issues. According to a recent attaché report, the UAE established the Ministry of Food and Water Security in 2017 because of food security concerns related to the Arab Spring.

On February 19, 2020, the Emiratis passed Federal Law No. 3 to “to regulate strategic stock of food commodities.” This law established the goal of creating a 3- to 6-month stockpile of key commodities in order to promote food security. A rush to establish these reserves resulted in elevated imports of key commodities in the latter half of 2020.

Private Saudi rice importers hold rice stocks at the behest of the Saudi Grains Organization (SAGO). As a result of Saudi preferences for long grain, and in particular, basmati rice, importers regularly store basmati rice for at least 6 months to improve quality.

SAGO specifically encourages rice importers to hold 10 months of consumption in stocks. Rice importers comply by holding approximately 6 months of non-basmati rice and aging basmati rice in their warehouses.

Full report.




The Latest


Send press releases to Ernst@Agfax.com.

View All Events


Send press releases to Ernst@Agfax.com.

View All Events