This is a best prospect industry sector for this country. Includes a market overview and trade data.
In February 2021, the Burmese military deposed the democratically elected civilian government and seized governing power. The military coup has caused enormous damage to the country’s growing economy and social stability, and escalating violence has negatively impacted many industry sectors, mainly banking, finance, healthcare, consumer goods, financial technology, agriculture, and logistics.
The agriculture sector is one of the most important sectors of the country’s economy; agricultural goods are Burma’s second-largest export commodity. The sector normally contributes nearly one-third of the country’s GDP, accounts for 20 to 30 percent of total export earnings, and employs more than 70 percent of the workforce. A total of 12.8 million hectares out of 67.6 million hectares of land in Burma are cultivated. Rice is the country’s primary agricultural product, which accounts for nearly 43 percent of the total agricultural production value. In Burma, 70 percent of the country’s population live in rural areas, and their livelihood drives the agriculture sector as an important growth engine of rural development.
The coup has negatively impacted agricultural output and trade due to the nationwide civil disobedience movement in 2021 and the military’s recent strict controls on exports, imports, and foreign exchange in 2022. According to a recent USDA report, the continued depreciation of the Burma Kyat against the U.S. dollar, the political crisis, and the continued economic impacts of COVID-19 have fueled the rising costs of fertilizers, chemicals, fuel, and seeds since mid-2021. In addition, Burmese farmers continue to have limited access to financing. The net margin for farmers remains uncertain with the current reference prices (floor prices), and farmers will use fewer inputs, which will lead to reduced production.
Post forecasts MY2022/23 rice production to equal MY2021/22 at 12.35 million metric tons (MT), mainly due to rising production costs, and forecasts MY2022/23 wheat production at 75,000 MT. Decreased domestic demand, lack of good quality seeds, low government interest in supporting wheat production, and high cost of production from rising fuel and fertilizer prices will keep wheat production below average.
Post forecasts Burma’s corn production in MY2022/23 and MY2021/22 at 2.9 MMT due to high domestic prices and robust export demand from Thailand, Philippines, Laos, Vietnam, India, and possibly China. High corn prices encouraged some sweet corn farmers to shift to seed corn production. Rainfall, seed quality, and fertilizer are the main factors in determining the yield; wet season crops often rely solely on rainfall. Farmers only harvest about 10-15 percent of corn production with machines, while they thresh most of the corn using threshing machines. Almost all corn cultivated in Burma is from hybrid seed, largely imported from Thailand.
Burma historically imports wheat grain from Australia, Canada, the United States, and Ukraine. Australia supplies 40 percent of Burma’s total wheat grain imports largely due to preferential duties granted under the ASEAN-Australia-New Zealand Free Trade Area as well as lower prices than U.S. wheat.
Burma’s agricultural exports include rice, maize, black gram, green gram, pigeon pea, chickpea, sesame, onion, tamarind, raw rubber, vegetables, and fruits. Burma’s major import items in the agricultural sector are power tillers, hand tractors, fertilizers, pesticides, herbicides, diesel oil, dumpers, loaders and spare parts, water pumps, hydraulic excavators, and gearbox assemblies for hand tractors, rod and mild steel, and hybrid and quality seeds.
Agricultural Machinery and Equipment: Currently, Burma depends on traditional manual labor and lacks the advanced technology needed to produce value-added finished goods. There is a market potential for U.S. manufacturers of agricultural equipment and farm machinery. Machinery used in the assembly and manufacturing of light to heavy agricultural machinery, power tillers, walking tractors, water pumps, sprinklers, drip irrigation sets, transplanters, threshers, seeders, weeders, dryers, and farm storage facilities are all in demand.
Other sub-sectors with good prospects for business opportunities are chemicals production, transport, storage, wholesale, processing, and agricultural services, irrigation system and facilities, farm industry, research and development, value-added production, packaging industry for local agricultural produce, warehouses, and cold storages facilities, and service support for the supply chain.
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U.S. Embassy, Burma