Myanmar halted rice shipments after floods over the past month inundated farmland, raising the specter of supply disruptions in the sixth-biggest exporter.
The Myanmar Rice Federation voluntarily suspended exports to prevent an increase in prices after more than 200,000 acres of paddy fields were damaged by floods, Thaung Win, the federation’s central executive committee member, said by phone. The federation represents rice farmers, exporters and millers. The suspension will last until mid-September, he said.
Heavy monsoon rains coupled with the arrival of Cyclone Komen late last month inundated parts of northern and western Myanmar, according to the United Nations’ Food & Agriculture Organization. The floods may see exports fall short of its target, according to the federation’s Win.
“A downward production revision might be warranted,” said Concepcion Calpe, a senior economist at the Rome-based FAO. “We still have to understand the true scale of the inundations to see whether they will dent the overall outlook.”
More than 1.2 million acres of farmland have been flooded and over 1 million people have been critically affected, the United Nations Office for the Coordination of Humanitarian Affairs reported on Aug. 12, citing the Ministry of Agriculture and Irrigation. The loss of stored food and livestock, coupled with internal trade disruptions, may see food security in affected areas deteriorate, the FAO said in an Aug. 10 report.
Declining supply from Myanmar may help boost global rice prices by about $10 a metric ton, said Kiattisak Kanlayasirivat, a Bangkok-based director at Ascend Commodities SA, which trades about 500,000 tons of rice annually. Any impact may be limited as other exporters such as Thailand can fill the market, said Samarendu Mohanty, head of the social sciences division at the Los Banos, Philippine-based International Rice Research Institute.
Thai 5-percent broken white rice, a regional benchmark, has dropped 9.8 percent this year to $377 a ton.
Myanmar will probably miss its export target of 1.5 million tons in the year through March 2016, according to the rice federation’s Win. Milled production is forecast to increase 1.6 percent to 12.8 million tons in 2015-2016, according to the U.S. Department of Agriculture. The agency estimates that exports may climb 18 percent to 2 million tons in 2015.