Monthly Archives: January 2021

MYANMAR fishery products’ export price to leading buyer Thailand slumped by 50 per cent, said U Win Kyaing, general secretary of Myanmar Fisheries Federation (MFF). Myanmar mainly ships mackerel fish to Thailand through Kawthoung-Ranong border. It fetched 100-120 baht per kilo last year, and the price sharply fell to 50-55 baht per kilo. Thailand did not stop trading, yet the offering price drastically dropped. During a bear market, the income generated by fishery products also decreased. Surprisingly, the market experienced a 50 per cent drop.

At present, the country is primarily conducting border trade with Thailand’s neighbouring country through those border posts; Kawthoung-Ranong, Mawtaung in Myeik, Hteekhee in Dawei and Myawady. Thailand has shut down the border with Hteekhee and Mawtaung. The central trading post (Kawthoung-Ranong) is still open for trading. However, to contain the spread of COVID-19, Myanmar traders cannot enter Thailand’s side, and the trading occurred only at the pier. Kawthoung-Ranong generated an income of US$250 million out of total fisheries export value with Thailand at $318 million in the previous financial year2019-2020, MFF stated.

Thailand is the primary buyer of Myanmar’s fisheries
products. Last FY, Myanmar shipped $318 million worth fisheries products to Thailand, while the total fishery exports stood at $850 million. The federation expects to reach fishery export target of $1 billion in the current FY2020-2021. Nevertheless, the fishery exports touched a low of $242.352 million between 1 October 2020 and 1 January 2021, which plunged from $261.994 million registered a year-ago period. The figures reflected a decrease of $19.6 million over the Q1 of the current FY compared with the last FY2019-2020, the Ministry of Commerce’s data showed. Myanmar’s fisheries products are exported to 45 foreign countries, and Thailand is the primary buyer of the fisheries products, followed by China.

Source: The Global New Light of Myanmar

The flow of trade between China and Myanmar has improved significantly after opening Manwain border checkpoint for 24 hours, which is essential to the border trade, according to Muse-Namhkam Merchant Association.
Border authorities from both sides have agreed on opening the Muse-Manwain trading post for 24 hours on a 10-day trial basis starting from 5 to 14 January to speed up the trade flow between the two countries delayed during the pandemic period. Before opening the Manwain crossing for 24 hours, more than 200 trucks with cargo entered China daily. After opening, over 400 trucks are crossing between China and Myanmar at Manwain checkpoint daily.

Now, the flow of trade is faster than earlier. The trucks that have been waiting for many days to enter China at Muse 105th Mile are also entering China these days said by the Muse-Namhkam Merchant Association Chairperson. Myanmar primarily exports watermelon, muskmelon, rice, broken rice, green gram, sugar and other agricultural products, and it imports electrical equipment, machinery, motorcycles, motorcycle accessories, fertilizers and construction materials. According to a trader, it would be better if we could open the crossing for 24 hours because it would be beneficial to the entrepreneurs and the people.

The rental charges of the trucks will also drop. Also, the flow of trade will be faster. But, we need to assign the departmental staff mainly, and they will be busy during these days. On the Myanmar side, the truck rental charges drop by 40 per cent. However, both counties will have to take responsibility for the truck drivers’ safety and ensure that they comply with COVID-19 guidelines during the trial period. In the trial period, the Manwain border crossing will be open for 24 hours until 14 January. Further coordination will be conducted between the two countries. The authorities will extend the opening hours or allow entry or exit for 12 hours of MST.

Source: The Global New Light of Myanmar

IMPORTS of raw materials by CMP (cut-make-pack) businesses has touched a low of US$476.3 million as of 1 January in the current financial year 2020-2021 since October 2020, which fell from $581.34 million registered in the previous FY2019-2020, according to the Ministry of Commerce. The figures reflected a decrease of $105 million, the Commerce Ministry’s data indicated. In October of FY2020-2021, the country exported $203.95 million worth garments to foreign countries. The figure plunged from $384 million registered in October of the 2019-2020FY. At present, over 100 CMP garment factories temporarily shut down on the reason for the lack of raw materials and slump in demand due to the coronavirus negative impacts, leaving thousands of workers unemployed. Sixty-four factories have been permanently closed down during the pandemic, compensating about 25,000 workers.

The data does not include those factories that have not resolved
worker payments, the Ministry of Labour, Immigration, and Population stated. The coronavirus impacts badly batter the labour-intensive enterprises, indicated the Directorate of Investment and Company Administration. The MGMA and EuroCham Myanmar held virtual meetings on 7 January 2021, along with representatives from EU brands. They highlighted efforts to increase job creations in the garment factories, keeping garment factory order from European buyers, improving skilled
workers’ capacity, and upgrading the Myanmar Garment Human
Resource Development Centre (MGHRDC) and strengthening
relationships between employers and workers. Additionally, MGMA also proposed leading a working group including government officials, European Brands’ representatives and the related institutions, to transform CMP into the free-on-board (FoB) system.

Myanmar mainly exports the garments to Japan and European countries, especially Germany. The US has also purchased the garments made in Myanmar. Some western countries cancelled orders amid the pandemic. Therefore, we need to focus on market diversification. Myanmar Garment Manufacturers Association (MGMA) requested the ministries to deal with changing and cancelling orders to keep the business alive. Myanmar’s garment factories have been complying with the COVID-19 health guidelines, and the buyers recognized this. If the factories can prevent from spreading the virus, it will not affect the production, MGMA General Secretary shared her opinion at the virtual conference held on 11 December 2020.

Under the EU Myan Ku Fund, they have now distributed K5.2 billion in support across 67,810 payments to unemployed garment factory workers as of 12 October. Workers in all the states and regions of Myanmar
have received this financial assistance, said Team Leader for EU Myan Ku
Fund. Next, foreign direct investments flow into many types of businesses, including garment enterprises. The foreign investors are not bothered by the disputes between employers and employees and some CMP businesses’ closure during the mean times, the Myanmar Investment Commission stated. Of the investment proposals, the manufacturing and labour-intensive businesses are prioritized by the commission. Myanmar mainly exports CMP garments to markets in Japan and Europe, along with the Republic of Korea, China, and the US.

The garment sector is among the prioritized sectors driving up exports. The CMP garment industry has emerged as a promising one, with preferential trade from Western countries. Myanmar’s garment factories operate under the CMP system, and those engaged in this industry are striving to transform CMP into the free-on-board (FoB) system. As the factories cannot enter into a contract for FoB, Own Design Manufacturing (ODM) and Own Business Manufacturing (OBM), the income is limited, according to the MGMA. According to the Ministry of Commerce data, exports of garments manufactured under the cut-make-pack (CMP) system were valued US$4.798 billion in the last financial year 2019-2020. Although the sector is facing hardships because of the cancellation of order from the European countries and suspension of Western countries’ trade amid the pandemic, export values rose in the previous FY (1 October 2019-30 September 2020).

The export value of CMP garments was only $850 million in the 2015-2016FY, but it has tripled over the past two FYs. In the 2016-2017FY, about $2 billion was earned from exports of CMP garments. The figure increased to an estimated $2.5 billion in the 2017-2018FY and $2.2 billion in the 2018 mini-budget period (from April to September). It tremendously grew to $4.6 billion in the 2018-2019FY, according to the Commerce Ministry. Since an outbreak like COVID-19 might happen in the future, it is necessary to prepare for a sufficient raw materials supply. The public and private sectors will cooperate in setting up the supply chain on our sources, including weaving, knitting, dyeing, and sewing factories. The MGMA has more than 500 members, and garment factories in Myanmar, employing more than 400,000 workers. Investors prefer to invest in countries with inexpensive labour, such as Myanmar.

Source: The Global New Light of Myanmar

THE COVID-19 free certificate, essential for fishery exports to
China, must be issued at the soonest as it can cause disturbance on trading, said general secretary U Win Kyaing of Myanmar Fisheries Federation (MFF). China authorities have given the go-ahead for fishery exports only with the presence of COVID-19 free certificate on products since last October. Consequently, fishery exports, including frozen fish, prawn, eel and crabs, cannot be exported to China via the land border. The Ministry of Health and Sports of Myanmar take all responsibility regarding COVID-19 and, there is no other institution which can guarantee the COVID-free status. Therefore, they need to tackle this process soon since failure to do so will directly harm the trade. The government needs to formulate a better policy for that as soon as possible, following the international standard.

The Federation stated that the exporters do not know where
to seek COVID-free certificate on fishery products. They need to follow the importing countries’ rules and regulation to enter their market. At
present, the COVID-19 free status on fishery exports is essential
for China. They still do not realize which department is responsible for the issuance. Earlier, the Fisheries Department took all responsibility regarding food safety on fishery products and granted certificate. The department is
now planning to deal with this to the utmost of its power during
the pandemic. However, when they look into Thailand’s Department of Fisheries, they are not authorized for this matter. Therefore, the Federation called for cooperation between the official departments concerned.

The Federation has already submitted a report to the Ministry of Agriculture, Livestock and Irrigation through the Fisheries
Department to screen fishery products and receive the COVID-19 free certificate. China is the second-largest buyer of Myanmar’s fishery
products. During the previous financial year 2019-2020, Myanmar shipped over US$850 million worth fishery products to external markets and among them, US$254 million worth exports flowed into China. The Federation expects to reach fishery export target of US$1 billion in the current FY. Nevertheless, the fishery exports via land border have halted since October 2020, resulting in a $30 million drop in fishery export value during Q1 compared with a year ago.

Source: The Global New Light of Myanmar

According to data released by the Ministry of Commerce, trade conducted by Individual Trading Card (ITC) holders reached over K8.09 billion through the land border in the first quarter of the current financial year 2020-2021.
The Trade Department issued 17 cards in the October-December period this FY. Imports exceeded K6.46 billion, and exports were valued at just K1.6 billion. The Myawady border recorded the highest trade value at K5.3 billion, according to the Commerce Ministry. Nevertheless, the figure only reflected imports as individual trading cardholders did not export goods through the Myawady crossing.

The value of trade carried out by individual cardholders stood at K115 million at Tamu post, K116 million at Tachilek, K421 million at Kawthoung, K2.09 billion at Mawtaung and K14.2 million at Kengtung, as per data from the Commerce Ministry. Individual trades topped K737 million in the period from 21 November 2012 to 31 March 2013; exceeded K6.6 billion in the FY2013-2014; reached K9.37 billion in the FY2014-2015; stood at over K6.4 billion in the FY2015-2016; rose above K18.5 billion in the FY2016-2017; touched K45.9 billion in the FY2017-2018; K22.5 billion during the 2018 mini-budget period (April-September); K59 billion in the FY2018-2019 and drastically plunged to K43.32 billion in the FY2019-2020.

The individual traders who cannot establish their own company can trade with the ITC in the border area. However, trading volume is limited. The card validity is set only one year, and the cardholders need to extend the card at the respective border posts one month before the expiry date.
Trading with the use of ITC is based on local currency. Hundreds of exports and imports items have been allowed for individual trading via the border posts. The trade department has issued 1,792 cards so far intending to boost trade. Business people can trade goods worth K3 million per day using ITCs, and the Trade Department has permitted trade of up to K15 million per day over five days.

Source: The Global New Light of Myanmar