Demand for coffee is booming in an increasingly caffeinated world, and although Myanmar is capable of producing international-quality product it has neglected the crop for years. But agricultural ministry officials are hoping to develop a coordinated strategy to ramp up production and connect cultivators with world markets.

Myanmar has been growing coffee for years but in relatively small amounts. An itinerant Scotsman brought a strain of arabica to the Mandalay hill town Pyin Oo Lwin in the 1930s, and it is still grown today, U Myint Swe, director of the coffee crop branch under the ministry’s agriculture department, told The Myanmar Times.

But the agricultural sector’s overwhelming focus has been on an industrial approach to growing crops like rice and beans for domestic consumption and export, said U Tin Htut from the Ministry of Agriculture, Livestock and Irrigation.

“Coffee was previously a neglected crop,” he said during a ministry research workshop on coffee growing in Myanmar on September 28. But U Tin Htut is hoping that ministry workshops can help produce a strategy to boost coffee production and tap into a strong global market.

The annual growth rate in global coffee consumption has averaged 2 percent since 2011, and the world consumed the equivalent of 152.2 million 60kg bags in 2015, according to the intergovernmental International Coffee Organisation.

US demand is higher than ever, and two shipments of coffee beans to the US in August represented Myanmar’s first commercial-scale exports to that country in over 15 years, according to Reuters. The US recently announced it was lifting almost all remaining sanctions against Myanmar, and would reinstate generalised system of preferences (GSP) benefits on November 13.

Myanmar is well placed to take advantage of the global thirst and improving economic relations with the US. At a US coffee expo in June 2015, Myanmar-produced strains of arabica and catimor coffees were deemed world-standard in a quality test – receiving higher marks than most other coffees shown at the event, U Myint Swe said.

“The strains have also been tested in Germany, and they also sent a report saying the quality was world- standard,” he added.

Local firms have taken advantage of Myanmar’s climate and regional demand. Yangon-based firm Coffee Genius, owned by Ko Ngwe Tun, has exported its Shan highlands coffee to Singapore and also enjoyed high marks from the Specialty Coffee Association of America.

But although Myanmar’s local industry can produce exceptional quality, it also faces production and marketing problems that have made it hard to reach international markets, U Myint Swe said.

Strains like the arabica have been grown for over 80 years, but a lack of finance has seen little in the way of progress.

“Crop yields have decreased steadily, although the quality has not,” U Myint Swe said. The useful life of a coffee plant, depending on growing conditions, is 20 to 30 years. “In other countries, once a coffee plant reaches 30 years old it is cut down and new ones planted,” he said. “But in our country we don’t cut them down, we make existing plants produce new shoots and branches.”

Although the international market is booming – driven mainly by rising consumption in developed economies – Myanmar’s local market for coffee is poor and cultivators are producing less in response, U Zaw Tun Myint, director general of the Agriculture Department, told The Myanmar Times.

The ministry wants to see coffee planted and grown according to international-standard practice, but in order to get cultivators onside the ministry has to improve the market, he added.

“We need to cooperate with the department and expand the market for growers,” he said. “Right now profits [in the local market] are low, so growers lower inputs, which lowers quality, which lowers prices and pushes profits down further. We need to reverse this vicious cycle.”

The acreage given to coffee plantations in Myanmar is shrinking and is now less than 50,000 acres – down from over 60,000 acres at the peak of production many years ago, he said.

U Tin Htut from the agriculture department’s coffee branch said collaboration between agricultural experts, exporters and planters is crucial to remedy the slump in production. He is helping work on a strategy paper for coffee development in Myanmar.

“Now is the time to really perform,” he said. Myanmar has the human resources and skills, but needs to improve the agricultural system in order to catch up with regional competitors, he added.

The coffee strategy should include targets for the next 10 years, and cover market research, finance, technical assistance, farmer training and which strains should be planted more widely, he said. The plan will be sent to a parliamentary economic committee, which includes the vice president and officials from the finance and commerce ministries, he said.

U Myint Swe said the plan will take around six months to draw up, and should involve assistance from experts from the agriculture department, USAID, the Myanmar Coffee Planting Association and other coffee experts.

But industry interest bodes well. At the ministry workshop on coffee growing last month over 40 members of the Coffee Planting Association and the private sector attended the meeting, joined by over 100 experts and officials from government departments, U Zaw Myint Tun said.

“It was the first big meeting on coffee in the last five years,” he said. “It’s a very encouraging situation. We held meetings in the past, but there wasn’t as much freedom as there is now.”

Translation by Win Thaw Tar and Khine Thazin Han

source: http://www.mmtimes.com / Myanmar Times / Home> Business / by Htoo Thant / Wednesday – October 05th, 2016