How the global fuel crisis is upending Myanmar’s rice supply chain

The global fuel crisis triggered by the US-Israel war on Iran is having a major impact on military-ruled Myanmar, shaking the country’s economic lifeline—the rice industry. March and April mark the peak period for harvesting summer paddy while also preparing fields for monsoon cultivation. It is also when fuel demand is highest in the rice sector. Fuel shortages across the region due to the Iran war have made imports difficult. As a result, domestic fuel prices have surged and shortages have emerged, severely affecting the rice industry, according to farmers, traders, and millers. Rice is Myanmar’s main crop, accounting for about 34 percent of total cultivated land. Nearly 18 million acres of monsoon and summer paddy are planted annually, with around 80 percent consumed domestically and 20 percent exported, according to official data. Although many farmers still rely on cattle, mechanisation is widely used in major rice-producing regions such as Ayeyarwady, Bago, and Yangon—from ploughing and harvesting to milling and exporting. Fuel is the lifeblood of these machines. In Ayeyarwady and Bago regions—known as Myanmar’s rice bowl—summer paddy is now ready for harvest. However, farmers say they are struggling to obtain fuel to harvest their crops, even as hundreds of thousands of acres are due to be harvested. A farmer from Thayarwaddy Township in Bago Region, who asked not to be named, said he needs to harvest more than 30 acres within the next 10 days but has not been able to buy fuel. “We have to harvest with machines. The authorities said they would provide fuel, but we can’t contact them. We simply can’t buy it. Prices are higher than usual, but shops need to sell for us to get it. There’s just no fuel available. We’re just waiting and watching,” he said, adding that due to labour shortages, manual harvesting is not feasible. Another farmer from the same village, who grows 24 acres, said they may have to watch their crops go to waste because they cannot obtain fuel to run harvesting machines. Farm labourers are taken by tractor to work in the fields in Mandalay Region (Photo: Aung Naing / Myanmar Now) Unusual measures Myanmar imports more than 90 percent of its fuel needs, amounting to about five million tonnes annually, worth around US$5 billion, according to the junta-controlled Ministry of Energy. Refined fuels such as diesel and petrol are mainly imported from Singapore, Malaysia, and Indonesia. Following attacks on Iran by the United States and Israel, the Strait of Hormuz—through which one-fifth of global oil shipments pass—has been disrupted, causing worldwide fuel shortages. Myanmar, which depends heavily on imports, is facing one of the worst impacts. The country has long faced difficulties in meeting its energy needs, especially since the military coup in early 2021, which limited its capacity to import fuel due to a lack of foreign currency reserves. Now, amid the global crisis triggered by the Iran war, the junta has imposed unusual measures to conserve fuel. Since early last month, private cars and motorcycles (excluding electric vehicles) have been restricted to operating on alternating days based on licence plate numbers. Fuel quotas have also been introduced depending on engine size, with designated purchase days. Reports indicate that farmers must present recommendations from village administrators, land ownership documents, and township agricultural committees to purchase fuel for tractors, water pumps, and other machinery. Despite these measures, fuel has become almost impossible to obtain. A village administrative official in Kyonpyaw Township in Ayeyarwady Region told Myanmar Now that farmers are leaving ripe paddy unharvested. “If we can’t harvest on time, there will be huge losses. The rice will over-ripen and fall. We’ll lose a lot. That’s why we’re scrambling to find fuel—going to towns with recommendation letters just to get one or two gallons,” he said. Even then, the amounts obtained are far from sufficient. Diesel—essential for large agricultural machinery—is only available in limited quantities even with official approval. As a result, diesel is being sold on the black market at up to 60,000 kyat (around $15) per gallon (3.8 litres), though even at that price it is difficult to obtain in the quantities needed. The Myanmar Rice Federation’s sister organisation, the Rice Millers Association, has reportedly secured fuel from the Ministry of Energy and is prioritising distribution to farmers harvesting summer paddy. Fuel is also being allocated secondarily to rice mills, which rely on generators due to frequent power outages. Under junta pricing, a barrel of diesel distributed through associations costs around 2 million kyat ($500), while the market price exceeds 2.5 million kyat ($625). Even with these efforts, supply falls far short of demand, said a rice mill owner from Letpadan Township in western Bago Region. “In normal times, we could buy fuel freely at market prices. Harvesters and mills operated smoothly. Now fuel is extremely scarce, prices are high, and it’s very difficult to buy,” he said. Fuel prices have risen sharply since the February 28 attacks on Iran. Official prices have increased from around 2,500–3,000 kyat ($0.63-0.75) per litre to 4,600–7,000 kyat ($1.15-1.75), while black market prices have reached up to 15,000 kyat ($3.75) per litre. Due to shortages, rising prices, and difficulty purchasing even at high prices, the current crisis is the worst in a decade, he added. “From land preparation to milling, drying, and transporting rice to export warehouses or ports—fuel affects every stage of production,” he said. Rice farmers work in paddy fields in Tatkon Township, Naypyitaw, in 2022 (Ministry of Information) Lucky to break even Rising diesel prices have increased costs across all stages. Ploughing one acre requires about three gallons (11 litres) of fuel, with costs rising from around 30,000 kyat to over 150,000 kyat ($7.50-37.50). Harvesting costs have also jumped from about 120,000 kyat ($30) per acre to over 200,000 kyat ($50). Transport costs have doubled as well, from around 1,500 kyat ($0.38) per bag within a 100-mile radius to about 3,200 kyat ($0.80), though transport remains unreliable due to fuel shortages. “The entire rice production process depends on fuel like a lifeline,” he said. Power outages and fuel shortages are also pushing up domestic rice prices and export-quality rice. High-grade rice has risen from around 50,000 kyat ($12.50) per bag to over 70,000 kyat ($17.50). While domestic shortages are unlikely, exporters say the crisis could affect exports. Myanmar aims to export 3 million tonnes of rice in the 2025–2026 fiscal year but is expected to reach only about 2.7 million tonnes, according to rice traders. China remains the largest buyer, importing over 1.06 million tonnes in 2025. Rising production costs are driving domestic prices up, but exporters must sell at global market prices, creating financial pressure, said a rice miller in Pathein Township in Ayeyarwady Region. Domestic supply depends on farmers’ production. If farmers cannot make a profit, they may stop cultivating. “If farmers can’t cover costs, they will reconsider farming. If they can’t recover their expenses, how can they continue?” he said. “If production drops, the milling sector will also be affected. If mills cannot operate, it will impact both domestic consumption and exports,” he added. Farmers say current paddy prices are no longer profitable. Although prices vary by region, cultivating one acre now costs around 1 million kyat ($250), while 100 baskets of paddy fetch only about 1.3 million kyat ($325). “If we break even, we’re lucky. Profit is far off. Some farmers have already stopped planting. In some villages near Pyinmana, entire communities have abandoned summer paddy,” said a 40-year-old farmer from Naypyitaw. Rising fuel prices are also pushing up costs of fertilisers and pesticides, making farming even more difficult. Given Myanmar’s high production and consumption of rice, maintaining market stability is crucial, industry players say. High prices hurt consumers, while low prices hurt farmers. The junta has imposed strict price controls and in recent years has arrested traders under the Essential Supplies and Services Law for raising prices. Such controls make it difficult to maintain a balance between farmers and consumers, said the Pathein-based miller. “When price caps are imposed, paddy prices can’t rise to sustainable levels. That creates major difficulties for farmers,” he said.

How the global fuel crisis is upending Myanmar’s rice supply chain

From ploughing fields to transporting exports, Myanmar’s rice industry is under strain as fuel shortages drive up costs and disrupt supply chains

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