Myanmar Agrifood System Monitor 2022 – Agricultural Traders – March 2022 Survey – Myanmar

Attachments

To understand the effects of COVID-19 and political instability on Myanmar’s crop trading sector, a telephone survey of commodity traders was conducted in March 2022 among an expanded sample of 456 traders in 14 States and regions.

Main findings

• More than 90 percent of traders reported increased transportation costs, up 74 percent on average over the past year, due to fuel prices rising 168 percent. Increases in transportation costs have been compounded by curfews and checkpoints related to the security situation. As a result, 30% of traders found it difficult to contract transport services.

• Compared to the same period last year, agricultural prices increased for corn (78%), pulses (41% to 55%) and oilseeds (27% to 32%) due to demand for export and depreciation of the Myanmar kyat. This will provide incentives to farmers in the dry zone and hilly/mountainous areas. Paddy prices at the end of March increased to a lesser extent (23%), not enough to offset increases in the cost of chemical fertilizers (which are expected to increase by 50% in the upcoming monsoon season) and mechanization services.

• Higher gate prices combined with slightly increased trading volumes imply higher working capital requirements for traders. Only a small proportion have increased their loan balance given the uncertainty about the duration of repayment.

Look forward

• Consumer prices will continue to rise sharply due to rising producer prices and transportation costs. Vegetable oil prices will be very high due to the combination of the Ukrainian conflict and the Indonesian palm oil export ban. Chickpea price increases limit the possibilities for poor consumers to maintain their protein intake by replacing meat and eggs with legumes. The majority of households in Myanmar are now vulnerable to protein deficiency and the majority of children to vitamin A deficiency.

• The March 2022 round of surveys took place before the implementation of the new foreign exchange restrictions, requiring exporters to convert all foreign exchange receipts into Myanmar kyat within 24 hours at the official rate. The difference between the official rate and the parallel market rate is effectively an export tax that will be passed on to farmers, reducing their profitability. This can be avoided by allowing agricultural exporters to maintain accounts in foreign currencies.

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