During Myanmar’s socialist era, private trade in pulses and beans was dampened by death threats.
“State buyers would tell farmers that if they didn’t sell them their beans they would be punished with death,” said Myint Zaw, executive member of the Myanmar Pulses, Beans & Sesame Seeds Merchants Association.
Under military strongman Ne Win, the crop’s export was a state monopoly handled by the Myanmar Agriculture Produce Trading from 1962 to 1988, and side dealing was prohibited.
“But I don’t think anyone was ever executed for [black market] dealing in black gram lentils,” Myint Zaw said.
Pulses and beans consistently ranked as the second-largest foreign income earner after timber for Myanmar, then called Burma, even as Ne Win’s 26 years of socialist policies failed to develop the economy, climaxing in mass protests and his retirement in 1988.
As the state moved away from socialism, private trade in pulses and beans developed, facing fewer state restrictions than the more socially sensitive rice crop under the juntas from 1988 to 2010.
By 2000, under private management, Myanmar’s pulse and bean production was second only to India’s.
But the legumes are not a major part of the country’s own diet, and their cultivation is a colonial import.
“In the colonial era, the British government brought many Indian farmers to Myanmar and at the same time they imported seeds of pulses and beans to be grown in Myanmar for the Indians to eat,” said Myint Oo, managing director of the Thein Yarzar Company, a pulses and beans exporter.
Many Indians went home after Myanmar’s independence in 1948, or were forced to flee after Ne Win seized power with a coup in 1962. But the crops endured, shifting from domestic consumption to exports.
In the fiscal year to March 31, Myanmar exported 1.4 million tonnes of pulses and beans, earning US$900 million, second to natural gas exports of $3.7 billion, according to Commerce Ministry figures.
An estimated 80% to 85% of the exports went to India, with very little of the crop consumed in Myanmar.
“It’s the only example I can think of where such a large percentage of farmers in a country grow a food crop that is essentially not consumed domestically,” said David Dawe, senior economist for the UN Food and Agriculture Organization in Bangkok.
The thriving sector gave rise to the Commodity Exchange Centre in northern Yangon in 1992.
Myanmar traders gather at the exchange each weekday from 10 to 11 am, catering primarily to Indian purchasers who are not permitted to participate directly.
The most popular pulses and beans for the export market include black gram, green mung, pigeon peas and chick peas.
In the last year, the sector has suffered a decline, despite the political and economic reforms since the 2010 general election.
Exports are down slightly from the year that ended in March 2012, when 1.45 million tonnes were shipped, earning $1.1 billion.
Competition for Indian buyers is growing from Australia and Canada, whose huge, mechanised farms and efficient transport systems have shunted Myanmar from India’s leading supplier into third place.
Although labour costs are low, other production and operation costs are high in Myanmar.
“The freight charge from Myanmar to Malaysia is much lower than our domestic transport charges from the farms to the port,” Myint Zaw said.
The ageing port is another bottleneck. “Yangon port was built by the British government. Since then we’ve had no new ports in Myanmar,” he said.
“Another problem is currency exchange fluctuations, both the Indian rupee and the Myanmar kyat,” said Kyaw Aung, managing director of Kyaw Eleven Trading Company. “Many buyers don’t want to take the exchange-rate risks, so they don’t buy.”
Myanmar allowed its exchange rate to fluctuate against the dollar last year, after decades of a fixed rate. But the main reason for the falloff in Indian demand is natural.
“It depends on the weather,” said Myint Zaw. “If there is a cyclone at the end of the rainy season, then all their fields are flooded and their pulses and beans will be gone. But if their weather is good, their crop is good, so they buy less from us.”
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Writer: Kyaw Ye Lynn and Peter Janssen