Until now, China had been buying up more than half of all Myanmar’s annual rice export, with much of the low quality paddy produced in the Irrawaddy Delta and central regions flowing across the Myanmar-China border with few border checks and through smuggling routes.

This year, however, China has taken steps to legalize and control its import of Burmese rice, demanding that an trade agreement be signed that guarantees that most rice is milled and meets certain quality and hygienic requirements, so called sanitary and phytosanitary (SPS) standards.

Following which rice prices and exports have experienced a sharp drop this year, a serious impact on the livelihood of Myanmar’s farmers, already among the country’s poorest groups.Myanmar Rice Federation Chairman, Chit Khaing, said prices currently stood at about US$330 per 100 baskets of paddy (about 1,500 kilogram), down from about $400 per 100 baskets last year.

“At the same time, Thailand is increasing its rice sales on the international market too, that’s why paddy prices here keep falling,” he said, adding that domestic rice demand had already been met. Chit Khaing also mentioned that Naypyidaw and Beijing are discussing a bilateral agreement on SPS standards that would allow the Myanmar Rice Federation to legally export some 200,000 tons of milled rice to China.

Earlier this month, the federation reached an agreement with Indian rice traders to supply two states in Northeastern India with 20,000 tons of rice per month sold at $400 per ton, but Burmese traders will have to arrange the costly transport to the Myanmar-India border.