If things go according to plan, Myanmar may be well on its way to regain its earlier top spot in the medium term, over the next decade.

Thus, the satisfaction in India and also Viet Nam at eclipsing Thailand as world’s top rice exporting country sometime this year may prove transient at best.

A recent policy of providing subsidy to a section of farmers in Thailand has resulted in a logjam in the distribution chain in the country. Authorities in Bangkok initially pinned their hopes on the size of major import orders from Bangladesh, the Philippines and Indonesia.

Thai Commerce Ministry estimated that Bangladesh had promised to lift between 2.5 to 3 million tonnes of rice in a government to government contract, and to buy one million tonnes (mts) of parboiled rice, along with Indonesia and the Philippines. While exports fell to 2.1 mts from the earlier level of 3.8 mts during the first quarter of 2012, the sheer size of these import orders made it clear that Thailand, the to rice exporting country in the world during the last five decades, would retain its position this year as well.

According to Thai media reports, authorities expected the private sector players to maintain their usual levels of export, around 6.5/7 mts annually. Therefore it should not be difficult for exports to touch or exceed around 9/9.5 mts, which should earn the country about $ 6.8 billion.

Sadly for Thailand, the script turned out differently and did not confirm optimistic official perceptions.

With the Thai government buying large quantities of rice at 50 percent over the market price, to ensure better living for over 900,000 farmers, the possibility of higher prices for exports loomed large. There are currently around one million tonnes of rice purchased from farmers.in stores and godowns. If the government goes in for exporting rice at current international prices, it stands to lose financially, because of high domestic prices. With Nigeria, Iraq, South Africa and the Ivory Coast committed to purchases, Thai authorities still feel they can ride out a difficult situation in which there are few options.

At present, Thailand’s share in world rice exports has dropped from its usual one third to one fifth so far this year.

Thai authorities are aware that India and Viet Nam have gained from the slowing down of their ex ports. They also note the emerging challenge from Myanmar, the country most well positioned to post a long-term economic challenge to its neighbour. Thai exporters facing hard times fear that some may go out of business.

However, as a large social segment, farmers are the happiest, admitting that their living standards have gone up. Thus, the subsidy announced by Prime Minister Lingyuck Shinawatra has certainly brought him political dividends from the four million strong farming community.

According to estimates of the International Rice Research Institute, Indian rice exports could touch 7 mts this year, with Viet Nam expected to sell about the same volume in the international market. Thailand could end up exporting 6.5 mts, a sharp drop from 10.8 mts achieved last year. Indian rice now sells at a lower price than Thai varieties, because of high domestic prices in Thailand. India exported 2.8 mts last year, after lifting a three year ban on rice exports, imposed in the wake of rice prices rising sharply in 2008, sparking off food riots and shortages in several countries.

Thanks to the centre’s decision to encourage and expand rice production in four major eastern/ northern states, India’s production this year will touch 103 mts, from 96 mts last year. Rice Exporters” Association sources are confident that India’s strong export showing will continue next year as well, with production expected to rise again. Domestic reserves of rice and wheat too, increased by 20%.

Now Myanmar has announced plans to regain its earlier top spot as the leading rice exporter some five decades, before the country went under army rule. The country’s rice varieties are currently cheaper than those produced in India or Viet Nam. However, its ports have not been upgraded or m modernized. Commercial production, supply and distribution facilities are antiquated in comparison with China or India. Its advantages include low labour costs, favourable soil, good weather and water availability and an experienced farming community.

At its peak in the sixties, Myanmar used to export around 1.5 /1.7 mts of rice. By 1996, this had fallen to a pitiable 15,000 tonnes. However, production has increased massively in recent years, and last year, Burmese exports touched over 7,70,000 mts, earning it a ranking of 9. Now that Myanmar, blessed with enormous natural resources, is being ruled by an elected democratic dispensation, its economic progress should be rapid, according to observers. Once more, Myanmar is being taken as a serious regional factor when it comes to rice production. (IPA Service)