Crop traders are important actors in the mid-stream of Myanmar’s food supply chains serving as the essential link between farms and food processors, exporters, commodity exchange centers, and urban food markets. Disruptions in the mid-stream brought on by political instability and COVID-19 will likely have an impact on both farmers and urban consumers through market access and crop pricing. This blog post presents results from 359 interviews conducted between August 24th and September 5th, 2022 including (i) general and major disruptions caused by the political crisis (ii) perceived impacts resulting from transportation restrictions and recent changes in foreign currency regulations; (iii) changes in crop prices, trading volumes, transport costs, and fuel prices; (iv) detail on credit lent out to farmers and credit taken in by traders.
You can view the full research note in English here.
Crop Prices and Security
The rapid MMK depreciation is a large factor in the price increases, especially for crops strongly linked to export markets. Exchange rates in August 2022 and August 2021 show that MMK lost 25 percent of its value against the USD and 10 percent of its value against the Thai Baht at the CBM official rates, but the MMK lost 51 percent against USD at the informal parallel exchange rate. At the official exchange rate, the year-on-year price increases for groundnuts and rice in Myanmar far outpace global markets while maize price changes are slightly below the global changes (Figure 5). However, at the informal exchange rates (the more accurate market value of the kyat), USD maize and rice prices have declined year-on-year though groundnut prices are still above last year. The widening gap between domestic and international market prices for maize and rice (both exported in large quantities) aligns with rising transport costs along with trade or market disruptions. Groundnuts differ from maize and rice as a smaller share of production is exported, and domestic demand has increased substantially following broad disruptions in the edible oil markets.
As a follow-up to crop price questions, traders were asked what they thought to be the main reasons behind the price changes (Figure 6). Transportation charges (72 percent), political instability (68 percent), and increased fuel prices (65 percent) were the main reasons given for price changes, while one third of traders cited the foreign currency regulations and a lower area of crops planted.
This blog post highlights one of the many recent surveys and research notes that MAPSA has conducted to assess the emerging constraints that key agricultural actors face and to mitigate the possible impacts of COVID-19 and recent disruptions on rural livelihoods and food security. Additional blog posts are available highlighting MAPSA’s research on the impact of disruptions on key actors in Myanmar’s agri-food system. Surveys are ongoing, and findings and recommendations will be periodically updated.
