Myanmar Puts Lid on Its Rice Exports

SINGAPORE-Myanmar halted rice exports to keep prices under local control, a senior industry official said Thursday as the country faces a bruising round of inflation.
The suspension is expected to create major dislocations in the market of Asia's most important foods in large part because Myanmar is a major exporter of the crop. Still, he stressed that governments are nervous about the cost of food, which helped trigger the riots in the Middle East.

Economists are particularly careful about the possible proliferation of bans on agricultural exports, fearing it could drive prices even higher in international markets. The steps are very popular with some governments when food costs are rising, as they are now, because they help ensure a supply of suitable premises, keeping domestic prices low. But also often lead to higher costs elsewhere as buyers are forced to find new sources.
A round of export bans in 2008 helped contribute to a dramatic increase in food prices this year, while the Russian ban on exports of wheat last summer also helped send prices climbing this crop .
According to the United Nations Organization and Agriculture Organization, the global food prices in February rose 2.2% monthly increase in January, the eighth in a row at the highest level in real and nominal terms since the agency began tracking prices in 1990. And the volatility of oil prices, the FAO warned, could lead to its index even higher. World grain supplies are also expected to push hard this year due to low stock levels.
With the increase in world food prices to a record, Myanmar has halted rice exports to try to keep prices under local control. Jake Wall Street Journal, Lee and Echoes of Asia in the street Mohammed Hadi Editor discuss how Asian countries are facing.
Myanmar remains a relatively small player in world rice trade, the export of up to one million tonnes a year in a global export market of around 30 million tonnes. Rice prices have remained relatively low compared with other grains this year, and traders now expect no export crop powers, including Thailand and Vietnam, to announce important limits on their exports.
Global rice supply is ample, due to large crops in Vietnam and Thailand, said Chookiat Ophaswongse, director general of the major Thai rice exporters Huaychuan Co. Mr. Chookiat said Thailand expects a record rice harvest of two million high school tons next month, after producing a larger crop in December, while rice production in Vietnam is likely to be a record 25 million tons this year. The two countries together represent approximately 50% of global rice trade.

Myanmar's movement, however, reflects the tensions in this poor nation of 50 million people, whose military-backed government is widely accused of human rights violations and has long been afraid of the risk of popular revolt. The higher consumer prices helped trigger mass protests led by monks there in 2007, which the military brutally suppressed.
Traders said the ban came after Myanmar domestic prices of some grades of rice rose around 15% last month, partly due to increased fuel prices. The higher costs of fuel and transportation, with increased fuel prices by over 40% in the last three weeks have driven up grain prices, said a trader based in Yangon commodity.
The ban on exports from Myanmar into force and will lunes25 at least until late April, said an executive committee member of the Association of Myanmar's rice industry.
It was not possible to reach anyone with the government of Myanmar, who rarely speaks to foreign journalists.
The ban means that the planned shipment this month from about 90,000 metric tons of rice to Bangladesh and African countries will be delayed until Myanmar decides to resume exports, traders said. The seed is the cheapest in the world, with 25% broken popular seniors who offered about $ 400 to $ 410 per tonne. The country has sent about 200. 000 tonnes of rice from the harvest before the export ban took effect.
A trader said that even the transfer of licenses that were issued before the exporters are uncertain and may have to declare a force majeure on some shipments. This statement provides legal protection to suppliers if they can not guarantee delivery.
The ban is not expected to have much impact on world prices, however, as buyers in Africa and Bangladesh can be obtained from other sources of rice to slightly higher prices. 25% broken rice from Vietnam is currently offered in about $ 420 per tonne, while the same grade of Thai rice is offered to about $ 470 per tonne.
The export ban has already had an impact on domestic prices, however. The cost of a bag of 20 kilos of grain of inferior quality has been reduced to 1. 000 Myanmar kyat ($ 153) to 12,600 kyat from last week, when the prices of intermediate and high quality remain high, dealers said.
the Myanmar rice exports in 2010 were reduced by almost half from 2009, to 500,000 tonnes from 900,000 tonnes, according to estimates by the International Grains Council.
Myanmar temporarily stopped rice exports in January 2010 and the licensing pace was slow, even after deliveries resumed.

(Source: http://online.wsj.com/article/SB10001424052748703300904576178083353231872.html)