Rice mill workers among latest to suffer from regime’s currency controls

By DMG 29 Jul 2022

DMG Newsroom
29 July 2022, Pathein

Many workers have been laid off at rice mills in Ayeyarwady Region, the heartland of the rice milling industry in Myanmar, and are struggling to make ends meet.

A currency conversion order issued by Myanmar’s military regime earlier this year is disrupting the rice trade, including exports and milling operations.

In April, the junta-controlled Central Bank of Myanmar (CBM) ordered financial institutions to convert any foreign currency earned by its customers into kyat within one business day at an official exchange rate of K1,850 to one US dollar. Meanwhile, the exchange rate on the market has exceeded K2,500 to a dollar.

It has been more than a month and a half since many rice mills suspended operations, said a rice miller from Pathein, the Ayeyarwady Region capital.

“We stopped buying rice [due to the junta’s foreign currency controls], and subsequently closed the rice mill,” he said.

Many mill workers have been laid off as a result, said a rice mill worker from Pyapon. “Many have been without a job for nearly two months. We are having serious troubles,” he said.

Rice exports will likely be suspended by many under the region’s current restrictions on the greenback, said a market researcher.

“Rice exporters make a loss when they export at the exchange rate fixed by the CBM,” he explained. “So, rice exports will stop for a while.”

Most rice mills in Ayeyarwady Region’s Pathein, Pyapon, Bogale, Myaungmya and Maubin townships have been closed for more than a month, according to rice millers in the delta region.