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USDA GAIN: Oilseeds, Cotton, Sugar, Grain and Feed


26 April 2013

USDA GAIN: Burma Grain and Feed Annual 2013USDA GAIN: Burma Grain and Feed Annual 2013

BM1054 - Burma’s rice paddy production and exports are expected to increase in MY 2012/2013. Corn production is expected to expand due to strong demand from domestic and Chinese feed mills. Wheat imports are expected to grow as consumers change their food preferences and exports of beans and pulses are expected to continue strong due to demand from India.
USDA GAIN Report - Oilseeds, Cotton, Sugar, Grain and Feed

Rice Milled

Production

In MY 2012/2013, rice paddy production is likely to increase by 2.6 percent to 17.3 MMT. Burma’s rice production system is plagued by a series of internal and external shocks. The decline in global rice prices has hit Burmese farmers hard as they are currently selling rice at or below production cost.

In MY2012/2013, Post adjusted production up to 17.3 MMT from 16.9 MMT as yields increased to 2.7 MT/HA due to an increase in summer rice planting area. In MY 2013/2014 production is expected to increase to 19.8 MMT or a 14 percent increase from MY 2012/2013. In MY 2013/14, rice production area is expected to increase to 7.0 million HA as farmers shift their cultivation to summer rice varieties that are better suited for the dry season and also meets Chinese consumer demands. Expected yields should increase by 3.7 percent as investments in post-harvesting practices improve.

Consumption

In MY2012/13 total consumption is estimated at 10.6 MMT for milled rice and 11.7 MMT for MY2013/2014. The basis for these projections are two percent population growth rate, a per capita consumption of 180 kg/year for the 61 million Burmese in 2012, and 103 kilogram/HA of seed usage.

Trade

In MY 2012-2013, Burmese rice exports are estimated to increase 15 percent to 690,000 MT from 600,000MT. Burma’s exports have slowed due to the re-emergence of India in the non-basmati trade and it is losing market share in its traditional markets of Bangladesh, the Philippines, and West Africa. Post expects this trend to continue through MY 2013/2014.

In MY 2011/2012, Burma’s rice exports totaled 600,000 tons, a 23 percent decrease from 2010/2011. Although exporters faced an appreciating currency with respect to the dollar, the government provided relief by reducing the export tax from ten to zero percent. Despite the tax relief, however, India’s reemergence in the non-basmati trade has slowed Burmese exports significantly in the last trimester of MY 2011/2012.

Production Policy

The lack of government support has put Burmese farmers at a competitive disadvantage with some of its ASEAN counterparts, such as Thai and Vietnamese farmers who receive government support to compensate for lower prices. Burmese farmers do receive assistance from Agricultural Development Companies (ADC), which are private sector entities that provide low interest loans to farmers. However, due to the high rate of loan defaults, the ADC has reduced its original budget of $100 million in MY2010/2011 to $25 million in MY2011/2012. Bad weather, flooding, and untimely rains during the harvest season have affected farmers’ rice production, consequently, preventing them from generating revenues to repay their loans.

Corn

Production

Corn production acreage in Burma continues to increase due to increased demand from domestic and Chinese feed industries. This trend is likely to continue as more farmers profit by growing hybrid corn rather than growing competing crops. Yields have also increased due to higher use of hybrid seeds, which have been aggressively introduced into Burma by private companies such as the Charoen Pokphand Group (CP) from Thailand. Since most of the hybrid corn is grown in rain fed areas with low inputs, corn yields remain lower than the potential yield of 5 MT/HA.

In MY 2012/2013, corn production increased 15 percent to 1.5 MMT compared to 1.3 MMT during the previous year. In MY 2013/14 Burma’s corn production is forecast to increase to 1.8 MMT from 1.5 MMT as the planting area is likely to increase by 17 percent to 450,000 HA. Average yields are likely to increase to 4.0 MT/HA driven by better seeds, higher demand from domestic and Chinese feed mills, and an increase in contract farming, particularly with CP/Thailand.

Consumption

In MY 2013/14, domestic corn consumption is forecast to grow to 1.4 MMT. Feed consumption accounts for an estimated 78 percent of the total corn production as livestock, particularly poultry, and aquaculture producers are increasingly substituting traditional livestock feed with compound corn feeds. Most of the corn supplies go to commercial mills in Rangoon, Mandalay, and Shan State primarily for feed use in contract farming systems. Additionally, in some hill regions like Chin State and drier parts of the country, corn is used as a staple food and a substitute for rice when it becomes too scarce or expensive.

Trade

In MY 2012/13, Burma’s corn exports are likely to increase 45 percent to 289,000 MT due to higher demand from domestic and Chinese feed mills. In 2011/2012, 75 percent of Burma’s total corn exports went to China. However, most of the trade goes through informal channels and is not officially recorded. Indonesia and Malaysia are also leading destinations for Burmese corn exports accounting for 25 percent of total exports.

Wheat

Production

Burmese wheat is primarily grown at a subsistence level in the Sagaing Division and Shan State using seeds from harvested grain. These regions have limited rainfall, thus, yields are nominal around 1.7 MT/HA.

In MY 2012/13, Burma is likely to produce 185,000 MT of wheat from 105,000 HA. In MY 2013/2014 wheat production is expected to increase as the private Burmese wheat importer, Diamond Star, enters into more contract wheat farming with growers in Shan State and provides advanced growing methods to increase productivity. Overall, wheat production in Burma is minimal due to the limited areas that are suitable for growing wheat.

Consumption

Consumption of wheat flour in 2013/14 is forecast to increase 11 percent to 490,000 MT due to increased population growth and changing food preferences.

Trade

Local wheat production is unable to meet local consumer demands, thus, imports have risen over time. In MY 2010/2011, Burma imported the first shipment of U.S. wheat since 2001. In MY2012/13, Burma is likely to import 256,000 MT of wheat. Ninety percent of imported wheat comes from Australia and 10 percent from the United States, Pakistan, and India.

In MY2012/ 2013, Burma is expected to import another 15,000 MT of wheat from the United States. The leading private wheat importers are Diamond Star and OK Brothers. The two companies have a 99 percent share of the market.

Beans and Pulses

Production

Production of beans and pulses in Burma is mainly based on residual soil moisture left from the monsoon season after the main rice crop has been harvested. Average yields are between 1.1 to 1.2 MT/HA. Similar to wheat production, farmers use seeds from harvested crops to grow beans and pulses resulting in poor quality and small yields.

In MY 2013/2014, Burma’s bean and pulse production is estimated at 4.8 MMT, up 1.2 percent due to an increase in production area. Burma is expected to produce 4.7 MMT of beans and pulses in MY 2012/13, up 5.5 percent from MY 2011/2012 due to an increase in cultivation area.

Consumption

In MY 2013/2014, consumption is expected to remain at 3.3 MMT.

Trade

In MY 2013/14 Burma’s bean and pulse exports are forecast to reach 1.5 million tons, an increase of 7 percent from MY 2012/2013 due to greater demand from India. In MY 2012/13, India is likely to remain the largest market for Burma’s bean and pulse exports, however, demand from China is also likely to increase. Burma’s bean and pulse farmers face increasing challenges as global prices continue to decline and climate conditions fluctuate.

Policy

There is no policy for beans and pulses.

April 2013

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