Previous Page Table of Contents Next Page


4. The marketing system and the proposed MIS


4.1 Policy environment
4.2 The domestic agricultural marketing system
4.3 Yangon markets
4.4 Foreign trade
4.4 Market information system

4.1 Policy environment

The marketing system works within the boundaries and limitations of a halfway-liberalized economic system. The unique situation in Myanmar is that the marketing of certain crops is completely handled by the open market, others are partially marketed through Government Organizations and in the case of rice, the domestic trade is partially liberalized but the export is a Government monopoly. As in any other country with a long border, there is also informal export of controlled commodities to neighbouring countries.

4.2 The domestic agricultural marketing system

The market infrastructure appears to be generally adequate. The major roads in the Central Dry Zone and the Plains and Delta Region are paved and mostly in a reasonable state of repair. Conditions are less good in the Hills/Mountains. For example the road of Meiktila to Taunggyi is narrow and winding and carries heavy bus and truck traffic, making for a very slow and bumpy ride. The major markets visited are paved and have functioning drainage and waste disposal systems.

In the more densely populated Central Basin the main marketing channel is: farmer to primary collector ("village broker"), to town wholesaler to terminal markets. In the less accessible hill areas of the Shan State the 5-day markets play a large role for assembly of agricultural produce (ref. Peter Twyford-Jones: Agricultural marketing Study, Dec. '98).

The overall system of the flow of surplus production to deficit areas, especially the major towns, is fairly efficient. The producers, traders and transporters are hard working people and their margins are generally small, due to lively competition.

Price information along the major trade routes is widely known (word of mouth from truck and bus drivers, neighbours etc.). For packing cheap local materials are used (bamboo baskets, jute bags, tomato wooden crates). Some commodities like cabbages, mangos and pineapples are stacked loose on the truck or in the boat (chun).

A variety of means of transport is used, by road, water and rail. Trust between farmers, traders and transporters makes it possible to market on commission basis and to send crops and return cash using the truck driver or chun captain.

Generally in Myanmar there appears to be a passion for Associations. Even in minor towns there is often a traders and/or millers association, which provide good sources of information for the project. In Mandalay City there is a long-established and active "crop exchange" trading floor (also called "brokerage house"). Every morning the suppliers of pulses and oilseeds in the Region present samples of their crops. Sales agreements, specifying quantity, price and delivery conditions are made between suppliers and town wholesalers. Staff of the Association keep records and every morning, before the start of business, the previous day's prices are displayed on a blackboard.

Every single crop that is fully or partly controlled by Gvt. Enterprises has more profitable "back-door" marketing options. This applies especially for sugarcane and cashew nut, but even cotton and on-farm processed jute can be sold on the free market in limited quantities.

In the long run important improvements in production and marketing can be expected from Introduction of improved varieties, standardization of weights and measures (preferably metric), better quality control and introduction of a grading system.

4.3 Yangon markets

Thirimingala is the main food & vegetable wholesale market, from which minor markets and shops are supplied and has also a minor retail function. The market is supplied by road vehicles and motor boats (chuns). The main commodities in this season are: banana, durian, ginger, betel leaves, coconut, green maize cobs, mango, cabbage and chillie. Banana, coconut and green maize arrive mainly by boat from Delta areas.

The Bayin-naung market is a big wholesale market for "dry" commodities: rice, pulses, onion, potato, dried chillie, garlic and dried fish. Traders in fertilizers, sugar, agricultural equipment, building materials and cement are also established here. Compared to many other Asian wholesale markets, this one is well laid-out on a grid system of large streets, easily accessible and clean. Each wholesaler has a fairly large compound with concrete warehouse and living quarters and ample parking space for loading/unloading trucks. Most commodities arrive by truck, are stored temporary in the wholesalers' premises and later transported to various destinations inside Yangon or other States/Divisions by smaller vehicles or also by truck. Some goods are re-loaded directly from one truck to an other in the general parking lot of the market. All vehicles entering the market have to pass through a checkpoint, where entrance tickets are sold.

As nearly all dry commodities destined for Yangon City pass through this market, it is an ideal location for a quantitative study of the food supply of the City. However, such detail is outside the scope of the present general study of the marketing system. The "New Boo Tree" market is a new market for fruits/vegetables/flowers, well situated to supply the northern parts of the City. The YCDC wants to increase the role of this new market, in order to reduce the pressure on the Thirimingala market and the traffic intensity in down-town Yangon. Green maize cobs are to be banned from Thirimingala and unloaded only at the new market. A drawback is that this market has no water access and maize cobs are presently supplied in large part by boat.

There is a specialized fish market fairly close to the Thirimingala fruit and vegetable market.

It was noted that relatively expensive commodities such as ginger, chillie, betel leaves and nuts, flowers and fruits like durian, mangosteen and rambutan are offered in impressive quantities. For a low-income country these constitute an amazingly large proportion of total supply in the Yangon markets.

4.4 Foreign trade

In Myanmar it is customary to make a distinction between the "regular" import/export by ocean shipping, mainly from Yangon harbour and "border trade", mainly by road to and from China, Thailand, Bangla Desh and India, including also some trade by coastal shipping from the Rakhine State to Bangla Desh and probably also from Southern Mon State to Thailand/Malaysia.

The main regular exports are pulses, rice, oilcake, maize and rubber. Among the commodities exported overland are onions, garlic, chillies, rice, pigs and cattle. Only palm oil is imported in significant quantities and a minor amount of wheat flour. Imports overland consist mainly of consumer goods and products of the Chinese and Thai light industry.

During a short visit of Northern Mon State intensive traffic of heavy trucks was observed, to and from Myawaddy, the border post with Thailand. There is also considerable unregistered "informal" trade by minor roads and ship.

Export policy is dictated by the high-level Trade Council, which includes also the State/Divisional Commanders. Abrupt changes in Gvt. policy occur frequently, which can be highly disruptive for the normal marketing process. For example if an export ban is slapped on for chick peas or other pulses, prices in the domestic market collapse. Similarly, when large imports of cheap palm oil from Malaysia are authorized, the domestic market of sesame, sunflower and groundnut oil collapses.

An other example concerns onions. A large and lucrative export to Thailand developed last year, causing a steep price rise on the domestic market. An export ban was then imposed so suddenly, that many trucks loaded with onions had to turn around at the border post at Myawaddy, back to Yangon. The price which had gone as high as 180 Ks/Viss came down to 30.

This kind of uncertainty will make it very risky for traders to carry large stocks and to engage in any temporal arbitrage, to the detriment of farmers and consumers. Indeed, several traders questioned about their market information needs, mentioned as first priority early warning on Government policy changes, secondly information on export market prices.

The Government imposed as of 1/1/99 a blanket 10% export levy on all agricultural commodities. Many complaints were heard about this and the levy is seen as a big disincentive for foreign trade.

It is suggested that improvements in the export marketing system can be expected from access to the Internet for world market conditions and wide dissemination of this information. A further liberalization of foreign trade is likely to stimulate the economy and the agricultural sector.

The planned Agricultural Marketing Unit in DAP/MOAI could serve as a Secretariat for an Advisory Committee, which studies both domestic and external market supply/demand conditions and price trends and advises the Government on general policy, including foreign trade. One of the first issues to be addressed is that sufficient lead time is given if and when policy changes are imposed.

4.4 Market information system

Already before the arrival of the Consultant, the National Staff, in consultation with the Management of DAP, has made a provisional choice of commodities and geographical coverage of the MIS to be introduced. A large number of crops were selected, including cereals, pulses, oilseeds, culinary crops, fruits and vegetables and industrial crops. Livestock products and fish have never been considered. The 8 States/Divisions selected are Yangon, Ayeyawady, Bago, Mandalay, Sagaing, Magwe, Shan State and Mon State.

This choice seems generally adequate. However, it should be kept in mind that the main purpose of the Marketing Study is to identify all commodities that are marketed in significant quantities and all areas of importance for the main marketing system, linked to the Yangon and Mandalay terminal markets or to export markets. Therefore, the Organizers of the study should keep an open mind and feel free to recommend omission of all or part of one or more of these States and to include specific products and production areas in States/Divisions other than those provisionally selected.

The argument is accepted that inclusion of livestock and fish from the start would complicate the project, as an other Ministry is involved. However, from the farming systems point of view, there are important options for framers, for example to sell maize as grain or feed it to pigs and poultry and information on livestock marketing opportunities are clearly important for the farmer. There are also important export possibilities, for example pigs to China and goats/cattle to Thailand.

The issue could be reconsidered at the time of the Impact Survey, planned for June 2000.

As mentioned, 3 well-qualified staff members of MAS have already been selected in each of the 8 States/Divisions to work as part-time price Collectors/Market Researchers. All have been convened twice already in Yangon for training. Their discipline and motivation seem to be excellent. The Ministry plans to provide a modest daily allowance to this staff for fieldwork. No special problems of any kind are foreseen at this stage. The Industrial Crop Enterprises have also offered staff for data collection concerning their specific crops.

As mentioned before, the agricultural sector is at present partly liberalized. This situation poses some unusual problems concerning the choice of information that should be collected and broadcasted, as not only the interests of the farmers and the traders need to be considered, but also the sensitivity of the information from the Governments point of view.

An obvious case in this category are the prices offered by private traders for sugarcane, cotton and jute, which tend to be higher than the official prices of the Enterprises who have the mandate to purchase and process most of the production. The same applies for world market prices and the prices at the border posts of crops that are exported legally or illegally.

At this stage there is no assurance yet that radio time will be made available and that the market information will be broadcast freely every day. However, DAP expects no difficulties in this regard.


Previous Page Top of Page Next Page