Written by U Ne Oo on 2004-01-15

The junta's -- perhaps not so surprising -- announcement of export ban on rice, which junta had given a free hand to the private traders since April 2003, is likely to have positive impact for consumers -- especially people who lives in large city like Rangoon. It may be the case that junta made a strategic calculation to ease social tension within Rangoon and other densely populated areas. Rangoon City itself now has a population of 6-7 million, which by itself constitute a critical mass for any event.

Traditionally agararian country, Burma has its population dispersed in rural areas. About eighty percent of total population reside in rural area about 10-15 years ago.

Recent dramatic rise in population in Rangoon is not as a result of industralisation. The major factor for this internal migration -- still minimal in terms of total rural mass -- is the desperation and extreme poverty of the rural population. Desperation and poverty for Burmese population as a whole is evident also from the existence of a large number of migrant workers to neighbouring countries.


Certainly, there are losses of job in Rangoon due to sanctions. The sanction has adverse positive impact too. Recent Irrawaddy report indicated the drop in prices of sea food in local markets. Within this context, recent rice export ban may have had some positive impact on the general public.


The critics pointed recent rice export ban as "self-imposed sanctions". Unfortunately, this is incorrect. This is because the government enforced purchasing of rice from farmers continues and so too the government administered rice export (statistics unavailable government itself exporting rice).


In fact, we do need to find statistics on where and how the government is exporting rice. If we can enforce total export ban on rice (both private and government) this will have very good impact for all concerned.

Regards, U Ne Oo.



US sanctions may be hurting factory workers and business owners in Burma, but they are also bringing an unexpected windfall for urban seafood fans, particularly in Rangoon.

Burmese seafood exporters have been feeling the pinch since Washington passed stiffer sanctions against the military government in July, as new orders and payment for previous shipments dry up. Foreign traders along Burma's borders have compounded the problem by trying to force price down further. In response, local seafood producers are dumping their seafood, formerly reserved for export, into the local market.

A businessman in Rangoon explained in August that export companies had quit buying shrimp, causing the price to drop by half.

A Rangoon resident said in September that various types of prawns and fish that had disappeared from local markets for almost a decade bacause of the government push to gain foreign exchange are now available again.

"This was similar to the 1996 Visit Myanmar campaign," the resident said. "All the best produce -- meat, vegetables, fruit, etc -- was reserved for the hotels and tourism industry. When the tourists did not come in the numbers that were expected, the produce was let back into local markerts.

"For those of us who can afford it," the resident continued, "we are able to eat our favourite seafood again."

Myanmar slaps sudden ban on rice exports

Mon Jan 12, 10:01 PM ET

YANGON (AFP) - Myanmar has imposed a sudden, six-month ban on rice exports in an apparent bid to curb public discontent by keeping prices down, sources said.

The ban, effective from January 1, was discovered by traders only when their goods were blocked from leaving the country.

However, analysts say the move may have backfired by driving prices dramatically lower, sparking fear among rice farmers.

Traders also face legal action from foreign firms who placed large orders for rice.

"Authorities have a penchant for coming up with such ad hoc measures without considering adverse effects," one analyst noted.

The ban is especially surprising given the government's decision in April to halt its involvement in the rice trade, including lifting controls on exports.

The move was welcomed by farmers who boosted production in anticipation of better prices. The current harvest is more than 21 million tonnes, according to official figures.

But with the bumper crop now hitting the markets, prices for paddy, or unhusked rice, have dropped from 180,000 kyat per hundred baskets (2,090 kilograms) to less than 100,000 kyat -- an amount that does not cover production costs.

"The military authorities are very wary of any potential security risks such as public dissatisfaction that could be brought on by spiralling prices," another analyst said.

The last major unrest in Myanmar was the student-led 1988 democracy uprising, which was brutally suppressed by the regime. Although politically motivated, it came amid dire economic turmoil in the Southeast Asian nation.

The six-month ban is also being applied to chillis, onions, sesame and maize -- all classified as essential foods by the government.

Consumers have become the inadvertant winners, paying 3,300 kyat per 23-kilogram (50-pound) bag of rice, 40 percent lower than last year. The prices of chilli, onion, sesame and maize have fallen by 10-20 percent.

But those who do not grow their own rice or other crops in Myanmar are in fact the minority, with some 70 percent of the 51 million people here estimated to work or live on farms.

The junta has also quietly started to pay state employees an extra 5,000 kyat (around five dollars at black market rates) per month to compensate for the loss of a rice subsidy last April.

"We were told that this money was a sort of rice allowance, since we no longer receive our rice rations," a low-level state employee from the information ministry told AFP.

According to analysts, the junta feared that once news of the extra payment for 1.2 million employees spread, unscrupulous entrepreneurs would hike up prices, placing the crucial staple out of the reach of ordinary workers.

"But the move may have backfired as prices plunged much more than expected and has hit rice farmers hard," one analyst told AFP.

Myanmar's economy is already reeling under decades of mismanagement by the military, with international sanctions, upped last year following the detention of opposition leader Aung San Suu Kyi, also biting hard.

The international legal ramifications of the surprise ban are only just starting to be felt as Myanmar companies fail to deliver on contracts, says one company official.

With the April announcement of controls on exports being lifted, some 25 companies began stockpiling extra rice for export, thrilling farmers as their crops commanded better payments, the official said.

He said his joint venture company, which has been unable to deliver 500 tonnes of paddy promised to a Singaporean firm, may now be just one facing legal action.

Analysts suspect the ban could be reversed earlier than in six months, as the government realises it is losing precious hard currency.

"This is like a self-imposed economic sanction that authorities can well do without," one analyst said.

Impact of Trade Sanctions: Adverse and Positive