Poor weather in India has left bean and pulse exporters confident prices will soon rise.

BEAN and pulse exporters are reportedly taking out loans from Kanbawza Bank that will allow them to hold onto their stock until global prices rise.

The Myanmar Times has been told Kanbawza Bank is offering the loans to a number of local exporters, who are hoping to increase revenues by delaying their shipments. Both Kanbawza and Central banks have refused to confirm the reports.

The managing director of one export company, which has benefited from a K4 billion loan from Kanbawza Bank, explained how the loans have assisted his firm.

“Our industry generally relies on big investments. To buy and ship 10,000 tonnes of any given product costs us about K7 billion. But now that my company has received a loan I’m confident that I can hold out until prices improve.”

Another leading exporter agreed that the loans were useful but added that there could easily be other sources for these loans.

“These loans benefit both exporters and farmers. But the big players in the industry should also be able to get loans from government banks as well.”
U Than Aung Kyaw, director of the Directorate of Trade, under the Ministry of Commerce, hinted that the government was not opposed to local banks offering such loans if it resulted in increased export revenue.

“Beans and pulses exports earned more than US$750 million in the last financial year. But we need to be able to offer financial support to exporters to guarantee that they are able to get the best possible prices for their commodities,” he said.

According to official government statistics, Myanmar exported 1.34 million tonnes of beans and pulses last year; this year the nation has already exported 900,000 tonnes.

He said Myanmar is the world’s second-largest exporter of beans and pulses and could foreseeably play a part in setting world export pricing.

However, market speculation has stopped exporters from earning the best possible prices for their products.

He said there were a number of domestic buyers – who are not legitimate exporters – that purchase bulk amounts of beans and pulses when prices are at their lowest and store them until the price rises. And when these prices have reached a high level they then sell their stockpiles, flooding the market and depressing the price again before legitimate exporters have a chance to sell.

U Than Aung Kyaw warned that if traders were not able to satisfy market demand at the right time, the market would move to fill the gap.

The secretary of the Myanmar Pulses, Beans and Sesame seeds Merchants Association, U Tin Myint, said that exporters weren’t attempting to artificially inflate prices by withholding supply.

He said that recent poor weather had limited Indian crops, which the industry expected would lead to increased demand. By giving loans to exporters to ease temporary cash flow problems, they should be able to hold onto their beans and pulses until world prices increase.

A number of traders interviewed by The Myanmar Times said they were confident that prices for Indian orders would improve in the coming months.
“India is now harvesting its beans and pulses but by the middle of October they will probably need to buy from us again and I would expect that prices will increase,” said the chairman of Asia King export company, U Tin Myint.

“Last year I couldn’t hold onto my matpe stocks long enough to benefit from their highest prices. But I think I can earn between US$100 and $200 more per tonne [this year] because I’ll be able to wait for prices to increase,” he said.
Current prices for matpe are K685,000 per tonne for fair quality and 775,000 per tonne for special quality.

The price has steadily increased from a low of K530,000 in May.
During 2006, the price of matpe reached an all-time high in Myanmar when India’s crops failed, reaching K960,000 a tonne for special quality grade matpe.