Agribusiness and Teak Markets in Southeast Asia

Teak trees, known for producing a durable and water resistant hardwood, are originally from South and Southeast Asia, notably India, Thailand, Laos, Myanmar (Burma), Indonesia, Sri Lanka, and Bangladesh. Traditionally, these countries have dominated global teak markets, particularly Myanmar, which supplies almost 75% of the world’s teak. Nevertheless, over the last several years, increased deforestation alongside changes in economic and social policy have decreased the share of the global markets that these countries occupy. Furthermore, many of these countries in Southeast Asia have begun to process teak products domestically, instead of selling the raw lumber logs, in order to foster national added value industries.

These dynamics in Southeast Asia have allowed other regions of the world, where teak has been naturalized and is also grown, to increase their export markets. As global demand for teak continues to grow, Latin America and Africa have planted extensive teak forests for commercial purposes. In Africa, teak plantations and exporters are found mainly throughout the southern coast of West Africa, notably in the Ivory Coast, Ghana, and Nigeria. In Latin America, major teak producers include Colombia, Panama, Nicaragua, and Ecuador. This article explores the status of the teak and agriculture industry in Myanmar (Burma).

Agribusiness and Teak Markets in Southeast Asia

The Union of Burma, also known as Myanmar, is a mid-sized and diverse country located in Southeast Asia, along the Bay of Bengal on the eastern Indian Ocean. After gaining independence from Great Britain in 1948, the country was governed by military figures and a junta throughout the 20th century. In recent years, Myanmar has opened up to the world as a nascent and fragile democracy with great economic potential. The country has a total territory of almost 677.000 square kilometers, which is somewhat smaller than Texas. Geographically, coastal plains and lowlands dominate Myanmar’s west and south along its more than 1.900 kilometers of coastline, while rugged highlands are prevalent throughout the interior. The country has a total population of almost 57 million citizens, less than 35% of which live in an urban setting as opposed to a rural one. Myanmar’s largest city is the capital Rangoon with 4.8 million inhabitants. Currently, the Burmese annual gross domestic product (GDP) is approximately US$280 billion and it has experienced positive economic growth upwards of 7.0% in recent years. Myanmar’s national economy is divided into 26% agriculture, 28% manufacturing, and 46% services. Likewise, the agricultural industry employs 70% of the national labor force, while manufacturing employs about 7% and services employ another 23%. Meanwhile, the agriculture industry utilizes some 20% of the national territory, while another 48% is forested.

In terms of natural resources, Myanmar has fossil fuels, lumber & teak, tin, antimony, zinc, copper, tungsten, lead, coal, marble, limestone, precious stones, hydropower, and arable land. Within manufacturing, the national industry is focused on agricultural processing, wood products, iron, cement & construction materials, pharmaceuticals, fertilizer, petroleum & natural gas, and garments. Meanwhile, the country’s agricultural industry has as main products rice, pulses, beans, sesame, groundnuts, sugarcane, fish, and hardwoods. In terms of trade, Myanmar belongs to the Association of Southeast Asian Nations (ASEAN) and its main partners are China, Thailand, Singapore, Japan, and India.

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