CNI News

13 Mar 2023

Rice exports to China through the border trade have dropped as Merchants are suffering losses as much as more than MMK 10,000 per bag, according to them.

The profits of border rice merchants have dwindled due to a requirement to exchange 65 percent of their export earnings into MMK at the rate set by the Central Bank of Myanmar as of 1st March.

As a result, the volume of rice exports at the China-Myanmar border has dropped by three-fourths compared to the period before 1st March, Vice Chairman U Min Thein of Muse Rice Exchange told the CNI.

He told the CNI, "The CBM requires rice exporters from the border trade to exchange 65 percent of their export earnings into MMK at the rate set by the CBM as of 1st March. As a result, they have suffered losses as much as MMK 10,800 per bag. As their profits have dwindled, rice exports to China through the border trade has dropped dramatically since 1st March. They will have to export rice through border trade they have already agreed. Before 1st March, between 40 and 50 truckloads of rice was exported to China through the border trade every day. Since 1st March, only nine or ten truckloads of rice have been exported to China."

 Exporting rice to China

The CBM sets the exchange rate for Yuan at MMK 300 per Yuan but market exchange rates for Yuan are as high as MMK 400 per yuan while the US$ exchange rate set by the CBM stands at MMK 2,100 per dollar but its market rates are as high as MMK 2,800 per dollar.

At present, domestic rice prices are rising but China is importing rice from Myanmar at normal prices. Rice merchants from the border trade are likely to enjoy profits when domestic rice prices fall by more than MMK 10,000 per bag, he added.

He told the CNI, "Chinese merchants will import rice from Myanmar based on their local rice prices, regardless of changes in currency policies in Myanmar. Myanmar merchants can export rice to China if they are profitable. Otherwise, they cannot export rice to China. When domestic rice prices fall in Myanmar by more tham MMK 10,000 per bag, exporters will be able to export rice to China again."

A rice warehouse

The domestic prices of rough rice have risen by MMK 14,000 per bag from MMK 44,000 per bag previously to MMK 58,000 per bag.

Border trade merchants will be able to export rice to China again when domestic rice prices fall, or Chinese domestic rice prices rise or the CBM lifts the requirement to exchange 65 percent of their export earnings into MMK, according to border traders.