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China constitutes over 77% of Myanmar’s overall rice exports in Q1

Myanmar exported over 500,000 metric tons of rice and broken rice worth US$191.717 million to China in the first quarter of the current financial year 2020-2021, which accounts for 77.4 per cent of overall rice exports, Myanmar Rice Federation’s data indicated. The erratic weather in China has caused damage to some farmlands in China. So, the strong trend is expected, Muse Rice Wholesale Centre stated. At present, Chinese provincial government has not granted the permit on rice import. However, the traders are buying rice with the remaining permit quota of 2020 through the border. The authorized companies for rice export to China through border posts is likely to increase to 50 this year, after inspecting Myanmar rice companies and rice mills in line with SPS Protocol (Sanitary and Phytosanitary Protocol).

However, the deal has not been confirmed yet by China. If they give the go-ahead to it, the trade will surge to three times for sure. The border trade will remarkably rise, said U Min thein, vice chairman of Muse Rice Wholesale Centre. Moreover, the wholesale centre in Muse is endeavouring to practice only cash transaction rather than credit transaction to avoid fraud case, traders said. The federation has also notified the traders to enter into a firm contract and strictly adhere to trade regulations. Myanmar Companies that have difficulties entering into a firm contract and complying with regulations can contact the federation or Muse wholesale centre. MRF released a notification on 27 November 2020. Beyond China, other foreign countries are also purchasing Myanmar’s rice.

The low-quality rice, mainly designated for exports, is fetching high price in the domestic market on the back of strong demand from external markets amid the production slump in the 2020 monsoon paddy season. The rice price is likely to remain high before the 2021 harvest season of summer paddy, traders said. Additionally, Myanmar regained rice market shares from certain countries on account of high quality, said U Ye Min Aung, chairman of Myanmar Rice Federation. Myanmar shipped over 648,158 metric tonnes of rice and broken rice to foreign trade partners between 1 October and 1 January this FY, generating an income of over US$245.096 million, as per MRF’s data. ASEAN countries constitute 9.61 per cent of Myanmar’s total rice exports with over 62,265 tonnes. In comparison, 11.62 per cent of total rice exports in Myanmar goes to European Union countries with over 75,341 tonnes, followed by African countries with over 2,940 tonnes. Over 5,914 tonnes of rice were shipped to other countries.

Myanmar has exported rice to 31 foreign markets so far. China is the leading buyer of Myanmar rice, followed by the Philippines and Poland. Malaysia is the fourth-largest buyer and Viet Nam, the fifth-largest buyer of Myanmar rice. Meanwhile, Myanmar sent broken rice mostly to China, followed by Belgium, Thailand, Netherlands and Viet Nam. Broken rice was placed in 15 foreign markets. The export price of Myanmar’s rice is relatively lower than the rates of Thailand and Viet Nam. Yet, the prices are higher than those of India and Pakistan’s market prices, MRF’s data showed.
Last FY, the country surpassed the export target of 2.4 million tonnes, sending over 426,611 tonnes to neighbouring countries through border trade and over 2.15 million tonnes of rice and broken to foreign trade partners via maritime trade, totalling over 2.58 million tonnes. Next, Myanmar yearly produces 13 million tonnes of rice. There is self-sufficiency in the domestic market, and rice reserves have been stored in Yangon, Nay Pyi Taw and Mandalay. Myanmar shipped 3.6 million tonnes of rice in the FY2017-2018, an all-time record in rice exports. The export volume plunged to 2.3 million tonnes, in the FY2018-2019.

Source: The Global New Light of Myanmar

Union Minister U Win Khaing urges MOGSS to prepare for changes in oil, natural gas industry

Union Minister for Electricity and Energy U Win Khaing said that unexpected changes will occur in the oil and gas industry in future because of the COVID-19 pandemic, calling on the Myanmar Oil and Gas Services Society (MOGSS) to prepare for the changes. The Union Minister made the remark in a video message delivered to the opening ceremony of the annual meeting held by the MOGSS via online yesterday morning. He urged the MOGSS to make suitable arrangements to adapt to the ‘new normal’ situation. It is said that the oil and gas industry continues playing an important role in the future and the market will continue growing. He continued that in 2021-2022, crude oil prices may gradually rise again.

It is pointed out that the global supplies and demands as well as changes in oil prices may have impacts on inviting international tenders for offshore block projects of Myanmar. Speaking on the effects of the pandemic, the Union Minister said that natural gas prices dropped by 5 -10 per cent and product prices in the downstream refining sector dropped by up to 20 per cent. It is also said that natural gas and LNG are playing a key role in changing energy consumption patterns due to climate changes and environmental impacts as well as increasing uses of renewable energy in ‘New Energy Mix’. Myanmar’s energy mix is about 40 per cent of hydropower; about 14 per cent of solar energy, about 34 per cent of domestic natural gas and 11 per cent of LNG, so renewable energy consumption in Myanmar is about 54 per cent and clean energy consumption is about 45 per cent, according to the Union Minister.

Moreover, it is said that major investment projects such as A-6, A-3, M-9 and M-3 offshore projects have been providing more job opportunities in the oil industry. He continued that in the future, new onshore and offshore pipeline-construction projects will be implemented, and consequently business opportunities will be open more. The Union Minister also urged all the stakeholders to observe the future trends of the power sector in line with the Future Energy Transition pathway. He also called on the MOGSS to cooperate with banks to obtain necessary funds, to provide technical training to staff members and to organize online conferences and exhibitions in order to develop the industry. The virtual meeting was participated by officials from the ministry, MOGSS officials, and representatives from companies from the oil and natural gas industry.

Source: The Global New Light of Myanmar

Domestic fuel oil price rises to nine-month high on vaccine optimism

The domestic fuel oil price has now risen to 30-50 per cent per litre compared to April 2019, as the vaccine optimism grew, and some businesses resume their operations, the market data indicated. At present, the domestic oil market has recovered a bit as the COVID-19 heightened measures have eased a bit. The fuel oil was pegged at around K655 per litre for Octane 92, K765 for Octane 95, K695 for diesel and K705 for premium diesel on 24 January 2021 in the domestic retail market, according to the local fuel oil market.

Domestic oil price is positively related to the global market. Oil price inched higher in the worldwide market in August. In the global markets, oil prices stood at around $39.9 per barrel for WTI crude oil on 3 August 2020. In late January 2021, the price slightly gained to $52.27 per barrel. The domestic oil prices have declined from 10 January 2020 owing to a fall in global oil prices. On 8 January 2020, oil prices were pegged at around K905 per litre for Octane 92, K995 for Octane 95, and K985 for diesel and premium diesel. Following the global market crashing, the domestic oil price plunged to more than 50 per cent in April against January’s prices.

In late April 2020, the oil prices touched a low of K290-330 per litre for Octane 92, K430-455 for Octane 95, K435-465 for diesel and K445-475 for premium diesel, according to the domestic oil market. Ninety per cent of fuel oil in Myanmar is imported while the remaining 10 per cent is produced locally. In the Q1 of the current financial year 2020-2021, about $600 million worth petroleum products were imported. The figure plunged by half compared to a year-ago period, the Ministry of Commerce stated. Usually, Myanmar imports fuel oil primarily from Singapore, with monthly volumes touching 200,000 tonnes for gasoline and 400,000 tonnes for diesel. There are about 2,000 fuel stations and 50 oil importer companies in Myanmar. 

Source: The Global New Light of Myanmar

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Global strong demand sparks agricultural exports

The agricultural exports have touched a high of US$1.46 billion as of 15 January 2020 in the current financial year since 1 October 2020 on the back of strong global demand for agricultural products amid the coronavirus impacts. The figures reflect a significant rise of $408.526 million this FY. The agro exports soared from $1.05 billion in the corresponding period of the 2019-2020FY, according to the trade figures released by the Ministry of Commerce. Myanmar’s agricultural exports rose regardless of the coronavirus’s impact on foreign demand for other export groups. In the exports sector, the agriculture industry performed the best, accounting for over 22 per cent of overall exports.

The agricultural sector’s top export items are rice and broken rice, pulses and beans, and maize. Fruits and vegetables, sesame, dried tea leaves, sugar, and other agro products are also shipped to other countries. Myanmar agro products are primarily exported to China, Singapore, Malaysia, the Philippines, Bangladesh, India, Indonesia, and Sri Lanka. Sometimes, the export market remains uncertain due to unsteady global demand. The country requires specific export plans for each agro product. They are currently exported to external markets based upon supply and demand. Contract farming systems, regional and state agriculture departments, exporters, traders, and some grower groups are required to meet production targets, said an official from the Agriculture Department.

The Commerce Ministry is working to help farmers deal with high input costs, procurement of pedigree seeds, high cultivation costs, and variable weather conditions. Myanmar Agricultural Development Bank (MADB) under the Ministry of Planning, Finance and Industry has notified the farmers of agricultural loans for the current financial year. In a bid to mitigate the impacts stricken by the COVID-19, the bank also provided an additional loan of K50,000 per acre under the COVID-19 Special Relief Loan Scheme between June and September 2020. Moreover, it cut the loan interest rate from eight to five per cent during the COVID-19 crisis. The MADB yearly grants agricultural loans to the small-scale farmers. The paddy farmers can take out loans of K150,000 per acre, while the growers of other crops including sugarcane, can get K100,000 per acre. They have to put the original Farmland Permit Form (7) up for collateral to secure the loan under the personal guarantee system. 

Source: The Global New Light of Myanmar