Myanmar is an emerging coffee producing country with the potential to add quality beans to a global market short on arabica and with a growing interest in superior grades of robusta. Though annual production output currently remains small, it is government policy to greatly expand coffee growing areas over the next few years. STiR Tea & Coffee explores whether Myanmar will emphasize high volume commodity coffee like Vietnam or remain dedicated to producing high-quality specialty coffees.
By Thomas Schmid
Myanmar has emerged with a reinvigorated entrepreneurial vision after more than six decades of self-imposed isolation by successive military governments. This new enthusiasm for commerce is evident in the emerging coffee industry guided by experts intent on expanding the global supply of quality beans.
Coffee cultivation started as early as 1885 in the former British colony of Burma, when missionaries established the first small farms. The sub-tropical climate of alternating warm days and cool nights with frequent rainfall in Myanmar’s central and northern highlands proved ideal for growing arabica. However, unlike other British colonies, Myanmar’s coffee industry was never developed beyond rudimentary small-scale farming.
In the years since independence in 1948, it was further neglected, primarily because many of the growing areas were occupied by guerilla groups of various ethnicities, against which the changing military juntas waged bitter wars. Decades of isolation did precious little to attract foreign investment. That is now changing.
The Republic of the Union of Myanmar in the last 10 years or so has taken the first modest steps to develop its potential as a major supplier of arabica coffees. A small robusta-growing industry has also sprung up in the country’s southwestern and southeastern lowlands.
Myanmar on the world coffee map
Despite these efforts, Myanmar to date remains relatively unknown as a global source for quality coffee beans, being overshadowed by adjacent China and nearby Vietnam, Thailand, and Indonesia.
“Today’s interest [in Myanmar-grown coffee] is better described as curiosity rather than demand,” explains Andrew Hetzel, a project consultant for the US-based Coffee Quality Institute (CQI). “Myanmar is not well known outside of Asia and completely unknown as a producer in the specialty coffee industry. There is a lot of education ahead that will be necessary to raise awareness of the country and coffee [among foreign buyers],” he said.
Making global coffee traders aware of Myanmar’s nascent industry also involves tutoring the farmers themselves. The industry has only recently begun to train farmers in technical skills that ultimately will help them to increase their yields and further improve coffee quality.
“Remember that most coffee farmers don’t drink coffee, so it is important to show them how to differentiate between good and bad. This is not a challenge exclusive to Myanmar,” noted Hetzel.
Under one umbrella
In an effort to streamline production techniques and thus bring the country closer to international coffee quality standards, the Myanmar Coffee Association (MCA) was established in 2014. Headquartered in Pyin Oo Lwin in the City of Mandalay region, one of the main hubs for arabica cultivation in the country, the organization is privately funded. There are 115 members, among them 25 larger estates, as well as five coffee roasters and an equal number of trading firms.
“Our mission is to eventually represent all coffee business stakeholders across the entire country. We are currently active in six of the largest growing regions, including Pyin Oo Lwin, Ywangan, Naung Cho, and Mogok,” said association vice-chairman Sai Wan Maing. “But we are planning to bring another two regions under our umbrella soon, namely Chin Hill and Than Taung, both of which are remote and isolated.”
MCA members cultivate approximately 1,235 acres (500 hectares) of arabica, practically all of which are shade-grown. Sai Wan’s own estate, Green Land Coffee Plantation, covers a sizeable 395 acres (160 ha), making it the largest among the association members.
During the 2014-2015 crop year around 170 metric tons (mt) of green coffee was harvested, a miniscule figure compared other major global growing regions, but a good start.
Collaboration for better yields
Meanwhile, the privately operated Mandalay Coffee Group, a cooperative of mostly larger estates founded in 2014, is likewise located in Pyin Oo Lwin. The group claims a total cultivation of 2,500 acres (1000 ha) among its 25 members. The plantations, located at elevations between 3,600 and 4,200 feet (1,100 and 1,300 meters), yielded a combined 200 mt during the most recent harvesting season, valued at $650,000. “We are planning to integrate local roasters and trading companies into our organization in the near future”, said the group’s director of sales and marketing, Min Hlaing, reflecting a similar move to MCA. This plan would of course help the group to both promote domestic sales as well as possible exports.
Support from NGOs
Also heavily supporting the development of Myanmar’s coffee industry is Winrock International, a US-based NGO with many years of experience in providing agriculture technical assistance around the globe. In Myanmar, Winrock currently implements “Value Chains for Rural Development”, a much-acclaimed USAID-funded program that develops specific agricultural value chains, including arabica cultivation.
“The Value Chains project builds on the success of the USAID-funded farmer-to-farmer program in Myanmar, which was also implemented by Winrock. Consequently, it provides inclusive, people-to-people, demand-driven support for smallholder farmers and agriculture producer groups”, according to Stephen Walls, chief of party, from his main project office in Yangon (formerly Rangoon).
The program’s coffee value chain launched in late 2014 primarily supports small-scale farmers, particularly those most in need of assistance, such as women and ethnic minorities. The project is implemented by experienced full-time staff and local volunteers with help from international consultants and specialists.
The project partnered with CQI to provide ongoing technical training and assistance to growers. It also supports processors, traders, marketers and the burgeoning domestic-based specialty coffee retail end of the value chain in Myanmar. “Our main goal is to… link smallholder farmers to competitive commercial value chains to increase agricultural productivity and facilitate sustainable, inclusive economic development led by the private sector,” said Walls.
“The project also administers an innovative grants fund designed to spur private sector investment in targeted value chains, including coffee,” he said.
In this context, Winrock in collaboration with USAID and the MCA recently organized the country’s first-ever official cupping competition.
Myanmar’s government, while encouraging the expansion and further development of the country’s coffee industry, appears too chronically cash-strapped to effectively support local farmers. However, a notable exception attesting to the state’s interest in promoting the industry is the existence of the somewhat awkwardly named Coffee Research, Information, Extension & Training Center (CRIETC).
Originally set up in 2001 as the “coffee research center” in cooperation with the United Nations’ Food and Agricultural Organization (FAO), the facility was reorganized in 2003 as CRIETC under the supervision and management of the Ministry of Agriculture and Irrigation. The center currently employs 16 full-time staff, including researchers, agricultural trainers and liaison personnel.
According to May Thet Hlaing, head of planning and research, the center’s main objectives are:
• select and test coffee varieties most suitable for the climatic conditions of Myanmar’s different regions;
• ensure highest cupping quality for all cultivated varieties;
• conserve present coffee varieties to prevent their disappearance;
• conduct research on proper cultivation techniques in order to increase production yields;
• assist in problem solving relating to the expansion of growing areas;
• conduct both theoretical and practical training programs on coffee production and processing for private coffee growers and members of related industries.
“For example, CRIETC has established experimental plots at its main facility in Pyin Oo Lwin to demonstrate different shade-growing patterns suitable for a number of Arabica varietals,” explained May Thet. “We maintain, for instance, a plot with catimor and another one with S-795, but we also conduct plant spacing trials and, in our nursery, monthly germination tests.”
The center’s activities are further supplemented by–among others–research into post-harvest technologies such as coffee processing, green bean grading, and frequent cuppings of samples collected from growers across the country.
Additionally, regular pest and disease surveys aim to ensure that Myanmar’s coffee plant inventories remain healthy and that appropriate counter measures can be initiated if any threats should emerge.
Myanmar’s Arabica Awakening
Calculations assume robusta production increased gradually from 15-20% since 2004.
Arabica vs. robusta
Due to its predominantly mountainous landscape, Myanmar almost exclusively grows arabica varieties. “I would estimate that about 95% of Myanmar-grown coffee beans are arabica and 5% are robusta varieties, mostly cultivated in the region around Than Taung,” explained Sai Wan Maing.
According to CRIETC’s May Thet Hlaing, seven robusta varieties have been planted in Kayin State as part of a cooperative program funded by Nestlé. If this program turns out to be successful, the country could well become a small but interesting source for superior grade robusta coffees.
Only a small amount of Myanmar’s coffee output is exported. Individual growers and cooperatives are concentrating on supplying the domestic sector and the small amounts exported are shipped to nearby countries.
“Of our entire group’s most recent combined arabica harvest, we exported only 20 mt, of which approximately half was shipped to China, 25% to South Korea, 15% to Malaysia, and roughly 10% to Japan,” according to Min Hlaing of the Mandalay Coffee Group, “The remainder was sold domestically.” His own plantation, Sithar Coffee Farm, was established in 2004 and yields approximately 8 mt per year, all consumed domestically.
The reason why exports have been on the backburner so far is difficult to determine, but it could well be that–as Hetzel noted earlier–a large proportion of overseas buyers are simply not aware of Myanmar as an emerging raw bean source.
It is possible to increase exports as demonstrated by the MCA’s members. “We export around 60% of our harvest, while 40% is consumed domestically,” said Sai Wan. “Our main exporting countries are - in descending order according to the quantities shipped - China, Thailand, Korea, and Japan. We also send minor quantities to Europe.”
“Myanmar is undoubtedly already a full-fledged producer, just a small one,” observed Hetzel, adding that “foreign companies and investors that I’ve spoken to seem excited. Since reopening after decades of diplomatic isolation, the country provides numerous opportunities for investment and growth – and not only in coffee production.”
There is a tremendous amount of work ahead to increase yields, improve quality and educate farmers in cultivation and processing technologies. MCA’s Sai Wan Maing agrees: “Generally speaking, our coffee farmers know how to grow and maintain their plantations, but we still need to improve farm management to increase yields, and also implement proper ways of post-harvest processing like wet milling, dry milling and storage, all of which are important to control our coffee quality”.
As such, Myanmar is not going to be another Vietnam. Instead, this obscure Southeast Asian nation harbors exciting potential to add quality beans to a global market short on arabica and perhaps also satisfy a growing interest in superior grades of robusta.
“The specialty coffee world will be hearing more from Myanmar in coming years,” predicted Hetzel, calling the country “a diamond in the rough.” Now may be the right time to cut and polish that diamond to transform it into a sparkling jewel.