Myanmar’s black gram market sees prospects amid decline in India’s pulses output

September 19, 2022

 

As the yield of the pulses produced in India declines, Myanmar’s black gram market sees potential, according to Ayeya Trade Centre (ATC) under Myanmar Trade Promotion Organization.


At present, newly harvested monsoon black gram (urad in India) from a major-pulse producing state Madhya Pradesh entered the market. Yet the pulses output declined and the growers found it hard to cover the cultivation cost. Moreover, the black gram’s quality is not good enough to fetch a good price.


Torrential rain in most of the states in India affected the harvest of pulses; especially black gram and green gram (moong).


The price of black gram FAQ slightly rises in Chennai, India yet the price is normal in other states. The price of pigeon pea (tur) also increased a bit.


The stock of Myanmar’s black gram shrinks. The price is fluctuating daily, tracking the Kyat-Dollar exchange rate and gold price, according to ATC.


The prevailing market prices of pulses stood at K2,035,000 per tonne of black gram and K2,125,000 per tonne of pigeon pea.


The ATC remarked that the current market price is possibly to inch higher following dollar rate and gold price. However, there is a gap between the reference exchange rate and the unofficial rate when export earnings are exchanged.


The Foreign exchange earned by locals in Myanmar must be deposited in accounts at the authorized banks and exchanged for the local currency at the Central Bank of Myanmar’s reference rate of K1,850 within one working day, according to notification released on 3 April.


On 5 August, the reference exchange rate was raised to K2,100.


Regarding foreign accounts of the exporters at the banks, 65 per cent of earnings must be exchanged to local currency within one working day. Banks must conduct transactions of the remaining 35 per cent for the use of exporters or remittance or selling them onto the authorized dealers, according to a statement released by the CBM on 16 August.


The CBM set the reference exchange rate for the US dollar at K2,100, whereas the dollar is valued at around K3,300 in the unofficial FX market.


During the corresponding period in 2015, black gram prices hit K2.1 million per tonne when Kyat weakened against the dollar at 1,000. However, India’s policy changes on import and anti-dumping duty imposed by India emerged. As a result of this, traders must be aware of situations where they could not expect the same level of profit as before, ATC elaborated.


As there is a home currency risk, the traders are likely to keep the stocks in hands. Black gram is a lucrative cash crop on the back of strong demand by India and low stocks.


According to a Memorandum of Understanding between Myanmar and India, India will import 250,000 tonnes of black gram and 100,000 tonnes of pigeon peas (tur) from Myanmar for five consecutive years from 2021-2022 financial year to 2025-2026 FY.


The prices of black gram in Myanmar is highly correlated with India’s demand, fuel price hike and Kyat value against the hard currency US dollar. On 31 August, the dollar against Kyat peaked at K4,500 in the grey market. Following that, the black gram price reached a record high of K2.1 million per tonne.
Last September 2021, the prices hit a record high of K2 million per tonne when the US dollar exchange rate with Myanmar currency hit over K3,000 in the local forex market. This year’s market price made a new record.


Myanmar conveyed over 723,043.9 tonnes of various beans and pulses worth $564.637 million to foreign trade partners between 1 April and 9 September 2022 in the current financial year 2022-2023. The country shipped over 580,691 tonnes of pulses and beans valued $468.283 million to foreign markets by sea, and over 142,352 tonnes valued $96.354 million were sent to the neighbouring countries through land border. Myanmar exported over 2 million tonnes of various pulses worth US$1.57 billion to foreign trade partners last financial year 2020-2021. The country shipped 1.24 million tonnes of pulses and beans valued $966.4 million to foreign markets through sea route, and 786,920 tonnes worth $604.3 million were sent to the neighbouring countries through land border.


Myanmar yearly produces approximately 400,000 tonnes of black gram and about 50,000 tonnes of pigeon peas. Myanmar is the top producer of the black gram that is primarily demanded by India, while pigeon peas, green grams and chickpeas are cultivated in Australia and African countries beside Myanmar.—NN/GNLM