Trade Liberalization Effects on Myanmar’s Oilseed Markets

Oilseeds and oilseed products are economically crucial in the Union of Myanmar. The free transaction of major oilseeds like groundnut, sesame, and palm oil has been restricted by the government’s agricultural trade policies which undermine the market forces of the domestic oilseeds sector. This study examines the impact of alternative trade liberalization policies on the social welfare of Myanmar’s oilseed sector using a partial equilibrium multi-market model. Welfare is analysed by evaluating producer and consumer surplus changes. Simulation results suggest that liberalizing groundnut seed trade has a positive net effect on the whole oilseed sector while sesame trade liberalization is better for the major edible oils sector. An import quota expansion affects the total edible oil sector positively while negatively affecting the two major oilseed sectors. Therefore, policy-makers should not ban potential groundnut and sesame trade. Palm oil quota restrictions should be liberalized for domestic poor groups but policies that compensate the losses of disadvantaged sectors or minimize the negative impacts on those groups are also required.