Required Report - public distribution

**Date:** 8/3/2004

**GAIN Report Number:** BM4018

BM4018

**Burma**

**Grain and Feed**

**Beans and Pulses Annual Report**

**2004**

**Approved by:**

![](media/image1.wmf)Russ Nicely, Acting Agricultural Counselor

U.S. Embassy, Bangkok

**Prepared by:**

Daphne Khin Swe Swe Aye, Agricultural Specialist

**Report Highlights:**

Burma\'s beans and pulses production is forecast to reach 2.9 million
metric tons in CY2004 with an exportable surplus of 900,000 metric tons.
The high cost of inputs will remain a major impediment to improved
yields.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Unscheduled Report

Bangkok \[TH1\]

\[BM\]

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#  Executive Summary..................................................................................................................3

# 1.1 Production ................................................................................................................4

> 1.2 Consumption
> ............................................................................................................5
>
> 1.3 Trade
> .........................................................................................................................5
>
> 1.4 Domestic Market Situation
> ...................................................................................6
>
> 1.5 Factors Affecting U.S. Trade
> .................................................................................6

###### Statistical Tables

> Table 1.1 Burma's Production, Supply, and Demand for Beans and
> Pulses.......7
>
> Table 1.2 Wholesale Prices for Beans and Pulses
> ...................................................8
>
> Table 1.3 Export Prices for Beans and Pulses CY2002
> .........................................8
>
> Table 1.4 Exports for
> MY2002/03................................................................................9
>
> Table 1.5 Exports for
> CY2002/03...............................................................................10

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# Executive Summary

Post forecasts that Burma's beans and pulses production will reach 2.9
million metric tons (mt) in 2004 with a substantial increase in Matpe,
Toor Whole (Pigeon pea), and Mung beans. The growth in production is due
entirely to an anticipated increase in the harvest area and a return to
more normal weather patterns. Total harvested area is forecast at 3.4
million hectares.

Pulses production in 2002/03 is estimated at 2.8 million metric tons.
Although planted area was up, yields per acre are affected due to
unfavorable weather conditions and insufficient inputs. Since beans and
pulses can be easily be fitted into the existing cropping system as
mono-cropping, double cropping, or mixed cropping, sown area has
increased tremendously with the introduction of a free market system in
1988. Starting from 1992-2002, the annual growth rate of beans and
pulses production has increased gradually at the rate of 12 percent,
with annual sown acreage increasing at 10 percent annually since 1988.
These area increases reflects farmers' responses to the substantial
growth in private sector exports. The Government of Burma (GOB)
initiative to increase seeded area to 3 million hectares by the year
2003 has been met due to farmers' increased freedom choose their crops.
In the prevailing market situation, where pulses prices are more
attractive than the other crops due to low costs per acre as compared to
paddy and suffering from less intervention by the GOB, the seeded area
for export oriented pulses such as Matpe, Mung beans, and Toor Whole
(Pigeon pea) has been expanding without much GOB assistance. Beans and
pulses also remain the commodity group that has the fewest restrictions
on border trading.

Burma is forecast to export about 900,000 mt of pulses in MY 2004. Burma
exported 852,000 mt in MY 2003, a decrease of 8 percent as compared to
MY 2002 when Burma exported 926,000 mt. In MY 2003, Toor Whole (Pigeon
pea) constituted 25 percent, Matpe 46 percent, Mung bean 15 percent and
other pulses 14 percent of the total exports. Other beans include:
Butter beans (Lima beans) Chick peas, Black Eye beans, Small white
beans, Bamboo beans, Kidney beans. Unlike rice, the export of beans and
pulses is not controlled and private exporters compete in the domestic
market with the Myanmar Agricultural Produce Trading (MAPT), an agency
of the Ministry of Commerce that procures beans and pulses for exports.

However, the export of chickpeas is still monopolized by the GOB. But,
private traders are allowed to export through MAPT under a new trade
scheme recently implemented by the Ministry of Commerce.

The government is encouraging the production of a more diversified
basket of agriculture products for export including beans and pulses. It
would like to see an expansion of the beans and pulses area in the
coming years and for exports to increase significantly, for Burma is
designated as a leading country among other ASEAN countries in the
growing beans and pulses export trade. Nevertheless, the beans and
pulses export trade will depend on government policy. Beans and pulses
have become the major foreign exchange earner for the country after the
GOB imposed a rice export ban in January 2004. The GOB also plans to
increase beans and pulses area through land reclamation projects carried
out by private entrepreneurs in Upper and Lower Burma. Since about 65
percent of the total beans and pulses are sown in the cold season while
there is residual moisture left after the rainy season, it is the most
feasible cash crop to grow in the reclaimed wetland areas after water
recedes in October.

According to the GOB, Burma has become the second largest exporter of
beans and pulses in the world, after Canada, and aims to penetrate
high-end markets such as Japan and various Middle Eastern Countries for
Mung beans, Matpe, and Toor Whole (Pigeon pea).

# 1.1 Production

Post forecasts Burma's 2004/05 beans and pulses production will reach 29
million metric tons, with total harvested acreage of 3.4 million
hectares on an assumption of normal weather patterns in mid to late
2004. The high price of inputs will be the major factor limiting higher
yields. Although harvested area increased in 2003/04, total production
is estimated at 28 million metric tons, as yields suffered due to bad
weather conditions before the harvest.

Burma grows eighteen varieties of pulses for domestic consumption and
export. Out of these eighteen varieties, Matpe, Mung bean, Chickpea,
Cowpea, Toor Whole (Pigeon pea), Black Eye beans, small white beans and
Butter beans (Lima beans) are the major export varieties.

Beans and pulses are grown throughout Burma but 90 percent of the total
production area is concentrated in the Irrawaddy, Magwe, Pegu, Mandalay,
Sagaing and Rangoon divisions. In 2003/04 these crops constituted about
20 percent of total sown acreage according to GOB data. The main
emphasis in 2003/04 was on increasing area of Matpe, Mung beans and Toor
Whole (Pigeon pea).

Beans and pulses production is entirely dependent on monsoon rains.
Cultivation of these crops is determined by the status of soil moisture.
In Burma, beans and pulses are grown in both monsoon seasons and also
during the cold season as a second crop following the monsoon-season
paddy where there is ample soil moisture. Monsoon beans and pulses
production constitutes 31 percent of the total while cold season
production constitutes the remainder.

Mung beans are grown as a late monsoon crop and also in the cold season.
It is planted throughout all the States and Divisions except in eastern
and northern Shan States. It constitutes about 28 percent of the total
beans and pluses area. The main market is India.

Matpe is grown in the late monsoon season and clod seasons. It is
planted in Sagiang, Tenessarim, Pegu, Magwe, Mandalay, Irrawaddy, and
Rangoon divisions, and Mon and Rakhine States. It constitutes 21 percent
of the total beans and pulses area. The main market is India.

Toor Whole (Pigeon pea) is a one-season crop and is planted in Sagaing,
Mandalay, Magwe Divisions and in Kayah, Kayin and in all of the Shan
States. It is seeded during the rainy season in July to August and
harvested in January. It constitutes 11 percent of the total bean and
pulses area. The main market is India.

Butter beans (Lima beans) (Phaseolus Italicize Lunatus) are seeded in
the late monsoon season and cold season. It is mostly grown in Sagaing,
to the western part of Pegu, Magwe, Mandalay, and Irrawaddy divisions
and in the Mon State. 49 percent of Butter beans are seeded in the
Mandalay division, constituting 2 percent of the total beans and pulses
seeded area. Another variety of beans and pulses known as Sultani/Pya
bean (Phaselous Italis Lunatus), also termed Red Lima beans, is grown in
Sagaing, Pegu, Magwe, Mandalay and Irrawaddy divisions and constitutes
only 3 percent of the total beans and pulses seeded area. Nevertheless,
considering these two crops as Lima beans, they constitute 5 percent of
the total beans and pulses area. The main markets are Japan and the
European Union.

Soybeans are seeded in the pre-monsoon season and cold season in Chin,
Kachin, Karen, Mon, and Shan States, and Sagaing, Pegu, Mandalay and
Irrawaddy divisions. It constitutes 4 percent of the total beans and
pulses area. Burma's soybeans are low in oil content and are not used
for extracting oil. It is used as food, mostly for soybean paste.

Beans and pulses yields are generally in the 0.70-0.85 metric tons per
hectare range. Since beans and pulses are mainly sown in the cold
season, relying on the residual soil moisture, or in the rainy season
with the onset of the monsoon season rain, timely seeding is crucial for
the success of the crop. An average yield per hectare in 2003/04 was
about 0.85 metric ton per hectare somewhat less than compared to the
0.87 metric ton per hectare achieved in 2002/03. That percentage
increase in production was primarily the result of increased seeded
acreage, as there was a decrease in the yield per hectare.

# 1.2 Consumption

The Burmese consume beans and pulses as a supplementary dish in their
diet to rice. It is also the main protein source diet of poorer
consumers. Some varieties are consumed as snacks. Although more than
eighteen varieties of beans and pulses are produced in Burma, not more
than ten varieties are locally utilized. The most utilized beans and
pulses are Chickpea, Gram, Soybean, Toor Whole (Pigeon pea), Mung bean,
Matpe, Lab Lab bean, Red lentil, Sultani/pya (Red lima beans), and Gear
beans. These are consumed as fried snacks, powdered, boiled, or in soup
form, as beans noodles and beans sprouts (esp. Toor Whole (Pigeon Pea).
People from Central Burma consume more beans and pulses than people from
the other parts of the country, partly due to a lack of green vegetables
during the hot, humid summer season. In the Shan States, soybeans are
mostly consumed as soybeans paste or curd. Burma is still experimenting
with a variety of soybeans from which oil could be extracted.

## 

# 1.3 Trade

Beans and pulses are the major agricultural export for the country.
Burma's beans and pulse's export are forecast to reach 900,000 tons in
MY 2004 up from 852,140 metric tons in MY 2003. Exports in MY 2003
totaled 852,140 metric tons, a decrease of 8 percent when Burma exported
926,279 metric tons in MY 2002. The major buyers for Burma's beans and
pulses were India, Pakistan, China, Japan Bangladesh, Thailand,
Singapore and the U.A.E. Regular buyers from the Middle East were Saudi
Arabia, Yemen and the U.A.E. Among the European buyers United Kingdom
and Germany were regular buyers and United Sates bought a small amount
of 105 metric tons of Matpe in MY 2003.

In MY 2003, exports to China decreased by 46 percent, India by 8
percent, United Kingdom 7 percent and Thailand by 85 percent
respectively, even though prices for beans and pulses have gone down
both within Burma and on the international markets.

India, the major buyer for Burmese beans and pulses, took 85 percent of
the total exports and were a somewhat stable buyer as compared to MY
2002. Traders think that in MY 2003 India bought a significant portion
of their beans and pulses from Canada, with whom Burma cannot compete on
quality or price. In CY 2003 the major beans and pulses market in India,
in Mumbai, Chennai, and Delhi, were weak. Prices remained low in Burma
as a result.

Nevertheless, it is noteworthy to report that exports to Japan increased
by 11 percent, reaching 13,432 metric tons as compared to the previous
year when Burma exported 12,070 metric tons. The increase in exports was
mainly due to increased exports of Butter beans (Lima beans) from Burma.
Burma exported 8,652 metric tons of these beans in CY2003 to Japan, as
compared to CY2002 exports of 5,031 metric tons. Some traders speculate
that Japan will increase imports of Butter beans (Lima beans) from Burma
whenever the prices of U.S. Lima beans climb. Even though the amount of
Butter beans (Lima beans) exports from Burma is not a large amount for
Japan, Post will monitor this situation since Burmese Butter beans
compete with the U.S. Lima beans in this market.

In January 2003, the Ministry of Commerce fixed Matpe prices at US\$ 224
per mt for fair average quality and US\$ 265 for special quality. Since
June 2003, prices have dropped to US\$ 165 per metric ton for fair
average quality and US\$ 205 per metric tons for special quality. In
November prices for Matpe recovered and reached US\$ 190 per metric tons
for fair average quality and US\$ 230 per metric tons for special
quality.

The prices of beans and pulses in the domestic market have also declined
since last August. The prices of raw Matpe were about Kyat 24,000(Kyat
800= \$ 1.00 U.S.) per bag (98 kilos) in January 2003, and then fell to
Kyat 10,800 during the first week of August. The ready cargo price for
Matpe was Kyat 120,000 per metric tons in August, down from Kyat 240,000
per metric ton at the beginning of CY2002. Even though current prices
are higher than in August, the prices are still lower than in previous
years. The fall off in Indian demand is the primary reason for the price
decline in CY2003. The principal pulses exported in CY2003 were Matpe,
Toor Whole (Pigeon Pea) and Mung beans. India remained the major buyer
of Burma's beans and pulses in CY2003 taking 85 percent of the total
exports and is likely to continue as the major recipient in the future

After the decentralization of the economy in 1989, the private sector
was allowed to export. The Ministry of Commerce issues export license
for private companies. Exports of beans and pulses are not restricted
except for chickpeas, which are restricted when the army is procuring
rations. Beans and pulses are also one of the commodities that can be
traded via border trade. Reliable sources estimate that about 10 percent
of the total regular trade went through border and sea-borne trade.

## 

## 1.4 Domestic Market Situation

The collapse of private Banks in February 2003 affected beans and pulses
prices in the domestic market. During the collapse of the financial
sector, traders and agents of Export Company had their assets frozen in
their bank. This restricted the supply of money in circulation and
coincided with the cold season beans and pulses harvest. The situation
was so bad that trading of beans and pulses became stagnant due to the
lack of money on hand, with only a few transactions done on credit.
Farmers were badly affected since most of them concentrated on beans and
pulses with the expectation of high returns.

## 1.5 Factors Affecting US Trade

For the time being the volume of Butter beans (Lima beans) exports pose
no threats to the U.S. Lima bean market in Japan. Nevertheless, with the
involvement of private entrepreneurs in the cultivation of beans and
pulses and with increased awareness of the international markets,
Burmese beans and pulses traders are likely to push for production
improvements to be able to sell to high-end markets, like Japan's. Since
Butter beans (lima bean) are a seasonal crop, improved bean quality
could be reached within a few years. There is the possibility that
Burmese beans, with their competitive prices could take over a
considerable share of the Japanese and European market in future years.

# Statistical Tables

## Table 1.1: Burma's Production Supply and Demand Table for Beans and Pulses

  --------------- ----------- ---------- ---------- ---------- ---------- ---------- ------------
  **PSD Table**                                                                      

  **Country**     **Burma**                                                          

  **Commodity**   **Beans**                                    (1000                 
                                                               HA)(1000              
                                                               MT)                   

                  2002        Revised    2003       Estimate   2004       Forecast   UOM

                  USDA        Post       USDA       Post       USDA       Post       
                  Official    Estimate   Official   Estimate   Official   Estimate   
                  \[Old\]     \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]    

  **Market Year               01/2002               01/2002               01/2002    MM/YYYY
  Begin**                                                                            

  Area Harvested  3100        3100       3300       3300       3400       3400       (1000 HA)

  Beginning       0           0          0          0          0          0          (1000 MT)
  Stocks                                                                             

  Production      2700        2700       2800       2800       2900       2900       (1000 MT)

  TOTAL Mkt. Yr.  0           0          0          0          0          0          (1000 MT)
  Imports                                                                            

  Jul-Jun Imports 0           0          0          0          0          0          (1000 MT)

  Jul-Jun Import  0           0          0          0          0          0          (1000 MT)
  U.S.                                                                               

  TOTAL SUPPLY    2700        2700       2800       2800       2900       2900       (1000 MT)

  TOTAL Mkt. Yr.  1000        926        852        852        900        900        (1000 MT)
  Exports                                                                            

  Jul-Jun Exports 0           926        852        852        900        0          (1000 MT)

  Feed Dom.       0           0          0          0          0          0          (1000 MT)
  Consumption                                                                        

  TOTAL Dom.      1700        1774       1948       1948       2000       2000       (1000 MT)
  Consumption                                                                        

  Ending Stocks   0           0          0          0          0          0          (1000 MT)

  TOTAL           2700        2700       2800       2800       2900       2900       (1000 MT)
  DISTRIBUTION                                                                       
  --------------- ----------- ---------- ---------- ---------- ---------- ---------- ------------

## Table 1.2: Wholesale Prices for Beans and Pulses

  ---------------- ----------------- -------------- ----------- -----------
  **Prices Table**                                              

  **Country**      Burma                                        

  **Commodity**    Beans                                        

  Prices in        Kyat              Per uom                    

                   2001              2002                       

  Year                               1              \% Change   

  Jan              183,549           192,259        4.75%       

  Feb              186,037           215,983        16.10%      

  Mar              171,800           212,735        23.83%      

  Apr              176,763           219,328        24.08%      

  May              207,774           213,355        2.69%       

  Jun              197,229           203,432        3.15%       

  Jul              209,014           213,355        2.08%       

  Aug              215,216           216,456        0.58%       

  Sep              202,811           243,746        20.18%      

  Oct              208,393           237,544        13.99%      

  Nov              220,798           225,760        2.25%       

  Dec              198,470           208,393        5.00%       

                                                                

  Exchange Rate    Kyat 800          Local                      
                                     currency/US \$             

  Date of Quote    4/21/2004         MM/DD/YYYY                 

                                                                

                                                                
  ---------------- ----------------- -------------- ----------- -----------

*Source: Agricultural Market Information 2003*

*Ministry of Agriculture and Irrigation*

## Table 1.3: Export Prices for Beans and Pulses 2002

(Per metric ton) in US\$

Mung bean US\$ 370

Matpe US\$ 460

Cow pea US\$ 320

Bamboo beans US\$ 265

Lab Lab bean US\$ 380

Butter beans (Lima beans) US\$ 280

*Source: Agricultural Market Information 2003*

*Ministry of Agriculture and Irrigation*

## Table 1.4: Burma's Beans and Pulses Exports for MY 2002/MY 2003

  ---------------------- ----------------- --------------- ---------------
  **Export Trade                                           
  Matrix**                                                 

  **Country**            Burma                             

  **Commodity**          Beans                             

  Time period            July -June        Units:          July-June

  Exports for:           2002                              2003

  U.S.                   42                U.S.            105

  Others                                   Others          

  Africa                 110                               \-

  Australia              15                                \-

  Belgium                1,578                             849

  Bangladesh             384                               3,563

  Brunei                                                   10

  China                  29,407                            15,824

  Canada                 481                               203

  Czech                  106                               90

  Egypt                  7,372                             9,362

  Germany                1,294                             154

  Greece                 21                                \-

  Hong Kong              963                               411

  India                  785,351                           725,905

  Indonesia              2,673                             522

  Iraq                   2,250                             5,250

  Israel                 415                               270

  Italy                  4,242                             1,479

  Japan                  12,070                            13,432

  Korea                  1,554                             1,565

  Lithuania              281                               \-

  Latvia                 22                                \-

  Mauritius              22                                \-

  Malaysia               2,693                             2,179

  Netherlands            1,111                             1,143

  Pakistan               35,533                            48,247

  Philippines            2,291                             854

  Portugal               663                               397

  Singapore              4,522                             4,393

  Spain                  636                               294

  Sri Lanka              4,937                             3,293

  Saudi Arabia           \-                                44

  Thailand               14,250                            2,139

  Tanzania               \-                                2,115

  United Kingdom         2,262                             2,100

  U.A.E                  6,432                             5,146

  Uruguay                146                               154

  Vietnam                40                                199

  Yemen                  \-                                44

  Venezuela              110                               \-

  Total for Others       926,237                           852,035

  Others not Listed                                        

  Grand Total            926,279                           852,140
  ---------------------- ----------------- --------------- ---------------

## Table 1.5: Burma's Beans and Pulses Exports for CY 2002/MY 2003

  ---------------------- --------------- ---------------- ---------------
  **Export Trade                                          
  Matrix**                                                

  **Country**            Burma                            

  **Commodity**          Beans                            

  Time period            Jan-Dec         Units:           

  Exports for:           2002                             2003

  U.S.                   63              U.S.             23

  Others                                 Others           

  Australia                                               46

  Belgium                1,537                            538

  Bangladesh             343                              27,982

  Brunei                 10                               45

  China                  32,479                           15,357

  Canada                 217                              159

  Czech                  106                              90

  Dubai                  594                              160

  Egypt                  7,861                            7,879

  Germany                411                              113

  Hong Kong              561                              411

  India                  838,695                          742,265

  Indonesia              2,531                            272

  Iraq                   7,500                            277

  Israel                 400                              2,659

  Italy                  3,844                            15,694

  Japan                  9,823                            853

  Korea                  1,213                            2,759

  Lithuania              22                               589

  Malaysia               2,104                            50,831

  Netherlands            1,189                            754

  Pakistan               40,301                           404

  Philippines            2,246                            4,191

  Portugal               771                              42

  Singapore              4,287                            4,363

  Spain                  632                              3,282

  Sri Lanka              2,463                            88

  Thailand               7,243                            1,255

  United Kingdom         4,013                            1,903

  U.A.E                  4,707                            4,321

  Uruguay                529                              177

  Vietnam                100                              99

  Yemen                  \-\--                            220

  Total for Others       979,041                          890,032

  Others not Listed                                       

  Grand Total            979,104                          890,055
  ---------------------- --------------- ---------------- ---------------

End of Report.