Japan Moves to Revitalize Burma’s Rice Industry

Japan is helping Burma to regain its status as a top rice exporter by making its first purchase of the grain from the Southeast Asian country in more than four decades and investing in rice processing plants there.

Burma has already ramped up rice exports to record levels after two years of reforms following the end of military rule and Japan’s moves could further boost production, local industry officials say.

“We have seen that Japan is enthusiastic about investing in Burma’s rice production,” Myanmar Rice Industry Association Chairman Chit Khaing told RFA’s Burmese Service.

“What we need is technology. That’s why we are collaborating with companies like Mitsui,” Chit Khaing, who is also the head of the Myanmar Agribusiness Public Corporation Ltd. (MAPCO) which is forging a joint venture with the Japanese company to build four rice processing plants, including mills, in Burma.

The mills will help Burma process rice for export to other countries while other plants will manufacture food products and produce power.

Japan, whose rice industry is among the world's most protected, agreed to a 5,000-ton shipment of long-grain rice from Burma last month, its first import of rice from the Southeast Asian nation in 45 years.

The shipment, to be made in early May, was ordered by trading house Mitsui.

In a further boost to exports, Mitsui and MAPCO are to set up a network of rice processing plants, including mills, as part of an Integrated Rice Complex Project that will have an intake of  400,000 tons of rice per year.

Pending a final agreement, MAPCO will take a 51 percent stake in the venture with the remaining equity to be held by the Japanese trading giant.

The four plants will be established in Naypyidaw, Rangoon’s Tantay township, in Ayeyarwady’s Kyaiklat township, and Bago’s Letpadan township.

“The rice bran and broken rice from the four factories will be made into other foods—for example, we will produce rice bran oil from rice bran and rice noodles will be produced from broken rice," Chit Khaing said.

“We are going to power the factories with electricity from rice hulls."

MAPCO also plans by the end of April to enter a joint venture with another major Japanese conglomerate, Mitsubishi, to start milling tropical japonica rice — used to make thin rice cakes popular for consumption in Japan — that is currently milled in China, according to the Bangkok Post.

Future as a rice exporter

In the fiscal year that ended in March, Burma exceeded its target of 1.5 million tons of rice exports by about 600,000 tons, breaking a 46-year-old record, state media reported.

Burma was the world’s biggest rice exporter for much of the first half of the 20th century until it was overtaken by Thailand after a military takeover of the country in 1962.

Chit Khaing said he was optimistic that Burma could continue to raise its exports from this year onward.

“Although we were left behind in the agricultural sector compared to other countries, I think we will definitely find our way back.”

“Our agricultural sector has advantages over Thailand or Vietnam: we have our own rivers and much idle land that can be used as farmland,” he said.

Burma’s overall production stood at 13 to 14 million tons of milled rice in the last fiscal year,  according to the Irrawaddy journal.

Vietnam’s total rice output last year reached 44 million tons, while Thailand’s stood at 37 million tons.

Despite improvements in recent years, productivity in Burma’s agriculture sector, which accounts for more than a third of the economy, has been hampered by factors such as antiquated practices and poor seed quality.

In order to continue to improve yields, Burma will need to work to educate farmers and use better equipment, officials have said.

As of late February, Japan was the 11th largest investor in Burma, with U.S. $270 million in overall investments, according to the Associated Press.

Although it scaled back most business activity and cut government aid when the U.S. and other western nations imposed sanctions in 2003, Japan did not impose sanctions on Burma.