Local bean traders face forward losses
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The Ministry of Commerce recently ordered bean and pulse traders to submit their forward trade accounts following the failure of some companies in settling contracts worth billions of Kyats.
According to an arbitration committee, the unsuccessful execution involved merchants from the Bayinaung bean market in Yangon Region who agreed to sell a large amount of beans and pulses to Indian buyers. However, these sellers are short of supplies for delivery, due to the recent hikes in prices of such agricultural products.
“The incident is partly caused by the sudden rise in bean prices. They have agreed to sell beans without having any beans at hand. They can pay some compensation now, but if the price continues to rise, they will be in a worse situation,” said Ohn Saing, the chairman for Bayinaung wholesale centre.
Trading companies such as Moe Thet Co Ltd struck an agreement to sell over 10,000 tonnes of beans for US$12 million. Now, they are being urged to return the amount as soon as possible to limit their losses.
The bean merchants association and the Yangon Wholesale Centre presented their case to the Ministry of Economic and Commerce, which in turn has formed an arbitration committee to help settle the debts owed by Moe Thet and other traders.
“If the sellers return all money now, they may be able to cover 90 per cent of the agreement value. The loss will be limited. That’s why they should submit us the trade accounts quickly,” said Ohn Saing.
The committee has received all accounts from all companies involved, and dealers will also be asked to submit the accounts should further problems arise.
The prices of beans and pulses have been on the rise since early April due to a lower yield this year.
There is a huge demand for the products from India, according to traders from the Bayintnaung Wholesale Centre.
“Buyers from India are continuously purchasing beans here. This year’s crop has dropped, though. So bean prices won’t go down. Instead, it’s creeping up,” said Tun Lwin, chairperson of beans and sesame seed traders association.
Myanmar cultivators have also focused on green mung bean to export in large quantities to China where they will get higher prices.
