David Dapice, April 2013
Exports of rice to China have exploded and are now over half of total exports. Because of high support prices for paddy and thus for rice in China, it is profitable to send rice and even paddy to China from Myanmar, where the imported rice can sometimes get higher local prices. This could draw rice away from “normal“ exports out of Yangon and even raise the price of paddy (and thus rice) in Myanmar to a level above the world price, causing imports to Myanmar. Imports to Myanmar would keep the price of rice lower than if the China price set Myanmar’s price. The major point for Myanmar is to use this as an opportunity for farmers to get higher prices and to produce more, but this will take different credit and input policies. This is a limited opportunity, for China may prefer to import rice officially by sea rather than informally through Yunnan. Indeed, border checks intensified in March 2013, reducing flows.