Rice price drops after China anti-smuggling operation

16.06.2017

The price of a tonne of rice has dropped to K30,000 after a successful operation against 27 gangs involved in smuggling of the grain by China’s General Administration of Customs (GAC) on Monday.

Traders examining rice at a MRF rice store in Mandalaya. Than Naing Soe / The Myanmar TimesTraders examining rice at a MRF rice store in Mandalaya. Than Naing Soe / The Myanmar Times

The gangs are suspected of attempting to smuggle 300,000 tonnes of rice between Myanmar and Vietnam, a local rice trader told The Myanmar Times.

A report from Xinhua news agency said that the GAC dispatched over 400 police officers to more than 20 locations in Chongqing Municipality and the provinces of Yunnan, Guangdong, Hubei and Shaanxi in China.

The operation was carried out as part of a unified anti rice smuggling campaign.

According to Myanmar traders, Chinese border officials began the operation by seizing cargo from various trucks suspected to be used in smuggling activities.

The increasingly lucrative but illegal trade has been steadily growing, pushing up the price of rice in the region and occurs three times a year, mostly during harvest time in September.

It is estimated a combined total of 300,000 tonnes of smuggled rice worth about 1.25 billion yuan (USD184 million) was seized. The GAC said that preliminary investigations showed that since 2014, the gangs had purchased rice in Myanmar and Vietnam before smuggling it across the borders into Yunnan Province and Guangxi Zhuang Autonomous Region.

In May 2016, there was a raid that netted over 50,000 tonnes of smuggled rice from Vietnam.

Tax evasion on rice since 2013 is estimated to be 123 million yuan (USD19 million) since 2013, according to a statement on the GAC website.

Rice Merchants Association (Mandalay) secretary U Sai Kyaw told The Myanmar Times that “This time it was really a big bust against rice smuggling for the China authorities.

The local merchants from Mandalay, Banmaw, Kawlin, Wintho regions lose incomes to smugglers in China. These smugglers are so smart, they have China both Myanmar and China ID cards.”

Myanmar legally exports to China via shipping on a quota system since the fiscal year 2014-15.

But the high taxes in China robs most local merchants of benefits from shipping.

U Sai Kyaw said, “The tax would be K8000 for a 50-kilo rice bag that costs K20000.

That is why the traders are not favour of legal shipping as the tax is too high for us,” he added.

According to cross-border export data, in the past two fiscal years there were roughly 12.2 million tons of rice exported for 2015-16.

Myanmar’s rice exports are generally of lower quality than its competitors such as Vietnam, Thailand and Pakistan.

However, buyers, particularly in remote Yunnan Province, have been willing to offer top dollar for Myanmar rice for use in processed, rice-based foods.

As a result, Myanmar’s rice exports to China grew from 2011.


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