CBM sells US$18 mln in May at auction-rate

The Central Bank of Myanmar (CBM) reportedly sold US$18 million at an auction rate in May, the CBM data showed.
The CBM’s move aims to govern the market volatility and support the state’s foreign exchange reserves, the CBM stated. The bullish hard currency gained in the local forex market, reaching the peak of above K1,7000 on 12 May. In a bid to control the sharp daily gains of the US dollar, the Central Bank of Myanmar reportedly sold about 6.8 million dollars on 3 February 2021, 6 million dollars each on 22 and 27 April and $18 million in May in the auction market.

At FX auction market, the CBM purchased $39.5 mln in January 2020, $31.5 mln in February, $21 mln in March, $16.7 mln in May, $39.1 mln in June, $31.1 mln in July, $35.6 mln in August, $44.2 mln in September, $43 mln in October, $100,000 in November and $7.8 million in December respectively. It sold $2.7 million in April and $3 million in December 2020. Next, the CBM purchased $1.8 million in January 2021. The CBM trades the foreign currency with the authorized private banks under the rules and regulations of the FX auction market. The instability in the exchange rate posed difficulties to those stakeholders engaged in the agriculture and livestock supply chains including farmers, traders and exporters.

That is why the stable exchange rate is vital of importance for the businesses. The local forex market’s data showed that the dollar exchange rate touched the maximum of K1,345 and the minimum of K1,327 in January 2021. The rate moved in the range of K1,335-1,465 in February. It reached the lowest of K1,420 and the highest of K1,550 in March. The rate fluctuated between K1,550 and K1,610 in April. In 2020, the exchange rate moved in the range of K1,465-1,493 in January, K1,436-1,465 in February, K1,320-1,445 in March, K1,395-1,440 in April, K1,406-1,426 in May, K1,385-1,412 in June, K1,367-1,410 in July, K1,335-1,390 in August, K1,310-1,355 in September, K1,282-1,315 in October, K1,303-1,330 in November and K1,324-1,403 in December. In 2019, the rates are pegged at K1,508-1,517 in July, K1,510-1,526 in August, K1,527-1,565 in September, K1,528-1,537 in October, K1,510-1,524 in November and K1,485-1,513 in December. On 20 September 2018, the dollar exchange rate hit an all-time high of K1,650 in the local currency market. 

Source: The Global New Light of Myanmar

The Central Bank of Myanmar sold $ 3 million in a foreign exchange auction, with the average exchange rate 1,665 kyats on 17 May

On May 17, 2021, the Central Bank of Myanmar sold $ 3 million in a foreign exchange auction, with the average exchange rate 1,665 kyats, according to the Central Bank of Myanmar. Monthly sales from January to December 2020 were $ 39.5 million in January 2020; $ 31.5 million in February; $ 21 million in March; $ 16.7 million in May; 39.1 million in June; $ 31.1 million in July; $ 35.6 million in August; $ 44.2 million in September; $ 43 million in October; $ 100,000 in November; It bought $ 7.8 million in December and $ 2.7 million in April 2020. 

It was resold in December 2020 for $ 3 million. It bought $ 1.8 million in January 2021 and sold $ 6.8 million in February. Short-term rise in foreign exchange rates; The central bank is launching a foreign exchange auction to reduce inflation and increase foreign reserves. The Central Bank of the Republic of the Union of Myanmar A regulatory-based foreign exchange auction is underway to reduce inflation and implement the state’s two foreign reserves. The Central Bank of Myanmar’s foreign exchange operations include short-term exchange rate fluctuations.

Comparing the exchange rate of Myanmar kyat with one US dollar to the previous day reference exchange rate to reduce depreciation, the percentage devaluation of the kyat exceeds the stipulated conditions (opening a competitive auction for sale in US dollars, the highest exchange rate announced by the central bank at the central bank auction and the lowest exchange rate announced by the central bank at the auction). As mentioned, the Central Bank of Myanmar is opening a foreign exchange auction in the short term. This is to reduce large losses and increase foreign reserves. The Central Bank of Myanmar (CBM) is conducting a foreign exchange auction to keep the exchange rate at a fixed rate. The Central Bank has stated that it does not intend to increase or depreciate the kyat.

Source: Daily Eleven

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Sino-Myanmar bilateral trade exceeds US$4.85 bln in five months

The value of Myanmar’s trade with China through maritime and sea trade channels totalled over US$4.85 billion in October and February of the 2020- 2021 financial year, including $2.54 billion worth of exports and $2.3 billion for import, according to data released by the Ministry of Commerce. Myanmar primarily exports agro products to China through the border gates. However, the trade of agricultural products is frequently halted on account of China clamping down on illegal trade at the border checkpoint.

Furthermore, China has been stepping up border control measures to contain the spread of the COVID-19, hindering the border trade at present. In a bid to lower trade barriers and offer relief to Myanmar traders through the border trade channel, the Ministry of Commerce, the related departments and the Republic of the Union of Myanmar Federation of Chambers of Commerce and Industry have been negotiating with China counterparts. The two countries are making efforts to set up more border economic cooperation zones and promote border trade.

The value of bilateral trade with China stood at $12 billion in the 2019- 2020FY, $11.36 billion in the 2018-2019FY, $6 billion in the past mini-budget period, $11.78 billion in the 2017-2018 budget year and $10.8 billion in the 2016- 2017FY respectively. Rice, various types of peas, sesame seeds, corn, fruits and vegetables, dried tea leaves, fishery products, rubber, minerals and animal products are exported to China, whereas machinery, plastic raw materials, consumer products and electronic tools flow into Myanmar.

Source: The Global New Light of Myanmar

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Myanmar rice export down by US$ 30 mln in seven months of this FY

Myanmar has exported over 1.28 million tonnes of rice and broken rice as of 7 May this financial year (2020-2021), generating US$490.45 million, stated the Ministry of Commerce. However, Myanmar rice export has dropped by 512,589 tonnes in the seven months of this FY compared to last year. The export value of rice has also declined by $33.92 million this FY.

According to an announcement of the Ministry of Commerce, the volume of rice and broken rice between 1 October and 7 May in the last financial year 2019-2020 reached over 1.79 million tonnes, worth $524.4 million. The country exported over 700,000 tonnes of rice, generating an income of $198.870 million and over 500,000 tonnes of broken rice, earning $191.584 million this FY. China is the primary buyer of Myanmar rice. The Philippines, Côte d’Ivoire and Cameroon and Guinea are the second, third, fourth and fifth largest buyers of Myanmar rice, respectively.

Countries in the European Union account for over 20 per cent of Myanmar’s rice exports. In comparison, 25 per cent of the rice produced by the nation goes to African countries. Myanmar mainly exports broken rice to Belgium, followed by Indonesia, China, UK, and the Netherlands. Last FY, Myanmar exported rice and broken rice to more than 60 countries worldwide. China is the largest buyer of rice from Myanmar. However, demand from the Philippines, Malaysia, Madagascar, Poland, Guinea, Belgium, Senegal, Indonesia, the Netherlands, and the UK has risen through the years. Around 16 per cent of exports are conducted at the border while the remaining is exported by sea.

Source: The Global New Light of Myanmar

How much are the people affected by the financial crisis and commodity prices

The sharp rise in the value of the dollar and the devaluation of the kyat have shaken the economy. Concerns have been raised about the impact on the public as a result of the devaluation of the kyat. The impact on the grassroots needs to be considered more than on big business and entrepreneurs. The gap between rich and poor in Myanmar, the lowest base wage in the region, must also be taken into account. The problem of income-expenditure inequality among the grassroots is the biggest challenge. In the wake of the COVID-19 outbreak, families are struggling to make ends meet due to the current situation; Facing declining income or loss of income.

The Livelihoods and Food Security Fund (LIFT), administered by UNOPS, warns of food insecurity and access to health services amid a crisis of soaring food prices. Commodity prices are rising in the places where food is available, especially items such as oil and gas, have risen by an average of 10 percent to 15 percent, further exacerbating food insecurity in the poorest households. Many families are struggling to make ends meet, not to mention other foods that provide nutritious food. Many workers in and around Yangon face declining incomes.

Many of the factories that kept families in the suburbs afloat have been shut down due to declining orders and supply chain problems, and some are facing serious financial problems. As a result, many workers (mainly female migrant workers) have lost their jobs and many factories have refused or are unable to pay their remaining wages. Food shortages, and rising unemployment have forced many former migrant workers in the industrial sector to flee Yangon, hurting the livelihoods of many urban street vendors. Many who continue to live in Yangon are also facing further livelihood challenges due to debt. Those who can open a bank account and save money or rely on social security programs also face withdrawal challenges due to the closure of several branches.

Queues and ATMs

At the ATMs of private banks, there is no decrease in the number of queues, and it is a market where the kyat is exchanged between percentages, according to money changers. There has been a queue at ATMs for withdrawals of bank deposits, as well as a one-percent exchange rate for the kyat. Some people no longer want to line up in front of ATMs. People are suffering a lot. For those who really need it, queuing takes time. People who have money are given a percentage and cash is taken. It has been more than a week since the one percent exchange rate, and those who wanted to withdraw money used to pay only five percent, but now they have to pay up to seven percent, said one money changer.

There is currently a lot of exchange rate in the market and there is criticism of it. Private banks have planned to issue withdrawals within a week by issuing a token system. On May 11, the exchange rate in the local market was 1,710 kyats per dollar; On May 12, the exchange rate was 1,735 kyats per dollar. On May 13, the exchange rate was 1645 kyats per dollar. In addition, the central bank issued $ 12 million between May 12 and 13 to control the currency market due to the recent sharp rise in the exchange rate of the dollar.

The central bank sold $ 6 million at a foreign exchange auction on May 12, with the average exchange rate for the auction being 1,650.6 kyats. The central bank sold $ 6 million at a foreign exchange auction on May 13. The average exchange rate for the auction was 1,669.5 kyats, and the central bank sold $ 12 million in two days. The central bank began selling dollars on May 13 through exchange counters. Fluctuations in foreign exchange rates are based on factors that can affect foreign exchange demand and supply. Volume of imports and exports; National economic growth rate; Budget status; And the price of goods and services in the economy.

Food price volatility

Recently, with the devaluation of the kyat, the prices of basic foodstuffs have risen in the market. Import prices rise due to rising dollar This is especially true for motor oil, which is widely used in the market. Telecommunications equipment Medicine It will push up prices for goods such as food and raise commodity prices and inflation. Due to the continuous rise in foreign exchange rates, domestic medicine, Prices of some imported goods have risen. Domestic products such as rice, oil, Salt Chili Garlic / Red Potatoes did not go up in price much. Oil prices rose slightly. Prices, especially for imported goods, have risen. Kitchen utensils from Thailand are rising in price.

Due to the continuous rise in foreign exchange rates, the prices of most medicines in the pharmaceutical market have risen and wholesalers are restricting the sale of some imported medicines, according to drug retailers in Thingangyun Township. Foreign drugs are more expensive. Masks are not expensive. Foreign drugs are up about 10 percent. Dollar prices; When gold prices go up, it depends on what they buy. Companies are also attending. Roads are closed and drugs are entering the market normally. The price is up. We are not pushing up drug prices. The price goes up when you buy. Buyers are likely to call everyone who looks appropriate, if there are only a few. 

Basic foodstuffs; Prices of major food items, such as cooking oil, have risen by an average of 10 to 15 percent, almost double the prices of palm oil, the most consumed by low-income families. In the last week of January, there was only 5,600 per 2 liters of oil. Now it is 7,500 kyats. Coffee mixes are also more expensive. Domestic production is also on the rise. Everything is going up in price. The closure of banks and the disruption of transportation have affected rice trade and supply across the region. Increased short-distance and long-distance transportation costs have risen by 40 to 50 percent due to the increased risk of loss of freight, which will result in higher transportation costs as a result of fuel shortages.

Gasoline prices rise more than 33% in three months

Myanmar mainly imports kerosene from Singapore, with a monthly import of 200,000 tonnes of petrol and 400,000 tonnes of diesel, according to the Ministry of Commerce. Increased restrictions and downloads for coronavirus control in Asia; Domestic gasoline prices rose more than 33 percent in the first three months, despite concerns over demand for oil as the dollar strengthened. In three days, the dollar depreciated to around 90 kyats per dollar, but local petrol prices continued to rise, according to local petrol stations. On February 3, the price of diesel was 660 kyats per liter. Premium diesel 600 kyats. Octane 92 Ron 620 kyats per liter; Octane 95 Ron is only 750 kyats per liter, according to figures released by the Myanmar Petroleum Importers and Distributors Association (MPTA). On May 13, the price of diesel was 995 kyats per liter. 

Premium diesel 1015 kyats. Octane 92 Ron 995 kyats per liter. Octane 95 Ron has risen to 1,080 kyats per liter, according to local petrol stations. On May 14, the price of diesel was 1,005 kyats per liter. Premium diesel is 1015 kyats per liter. Octane 92 Ron 1005 kyats per liter. Octane 95 Ron continues to rise to 1090 kyats per liter. According to local petrol stations, the average price of petrol has risen by more than 33 percent in three months, from 990 kyats to nearly 1,100 kyats per liter depending on the type of petrol. In the first three months from the beginning of February until now, the price of diesel and premium diesel was over 330 kyats per liter. Octane 92 Ron more than 370 kyats per liter; Octane 95 Ron rose to over 330 kyats per liter, respectively. Myanmar imports around six million tonnes of kerosene a year, according to the Ministry of Commerce.

In the first seven months of the current fiscal year, imports of 2.7 million tonnes of kerosene were valued at $ 1.2 billion, down more than one million tonnes from the same period last year. In the current fiscal year, imports of kerosene decreased by 1.02 million tonnes compared to the same period last year. During the same period, 1.66 million tonnes of diesel was imported, down more than 650,000 tonnes from the same period last year. More than one million tonnes of gasoline was imported, down more than 350,000 tonnes from the same period last year to $ 227.187 million. It is undeniable that the impact of financial market instability has had a significant impact on the lower classes, mainly due to high commodity prices. The current volatile foreign exchange rate is affecting the majority of the population. As Myanmar relies heavily on imports, the rising dollar and rising gas prices could have a major impact on the population. As Myanmar’s economy slows and people’s purchasing power declines, so does the value of the dollar. Businesses say rising fuel prices and rising commodity prices are further hurting the people amid the crisis.

Source: Daily Eleven

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External trade drastically drops by $5.34 bln as of 7 May

Myanmar’s external trade between 1 October and 7 May in the current financial year 2020- 2021 plummeted to US$18.08 billion, a sharp drop of 5.34 billion compared with the corresponding period of the FY2019-2020, according to the Ministry of Commerce. According to data released by the ministry during the same period in the previous FY, the trade stood at $23.4 billion. Over the past seven months, Myanmar’s export was worth over $8.97 billion, which plunged from $11.23 billion registered a year-ago period. Meanwhile, the country’s import was valued at $9.1 billion, showing a significant decrease of $3.07 billion compared with the last FY. Both sea trade and border trade dropped amid the coronavirus impacts.

The neighbouring countries tightened the border security and limited the trading time to contain the spread of the virus. Furthermore, the current political conditions drag down the trade. At present, the traders have transaction problem triggered by the restriction of the private banks, a market observer shared his opinion. Myanmar exports agricultural products, animal products, minerals, forest products, and finished industrial goods. At the same time, it imports capital goods, raw industrial materials, and consumer goods. The country’s export sector relies more on the agricultural and manufacturing sectors. The government is trying to reduce the trade deficit by screening luxury import items and boosting exports.

Under the National Planning Law for the Financial Year 2020-2021, Myanmar intends to reach an export target of US$16 billion and import of $18 billion. The Ministry of Commerce is focusing on reducing the trade deficit, export promotion and market diversification. Since 2011, the Ministry of Commerce has adhered to its reform policy. A series of moves to liberalize and open the economy have been introduced through policy development to improve the trade environment. The external trade stood at $36.73 billion in the 2019- 2020FY, $35.147 billion in the 2018-2019FY, $18.728 billion in the 2018 six-month interim period, $33.578 billion in the 2017- 2018FY and $29.209 billion in the 2016-2017FY, respectively, as per the Commerce Ministry’s statistics.

Source: The Global New Light of Myanmar

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Domestic black bean price soars by K54,000 per tonne in two weeks because of dollar appreciation

With the rising dollar exchange rate, the price of black beans has soared by K54,000 per tonne in the domestic market in two weeks, according to Yangon Region Chambers of Commerce and Industry (Bayint Naung Brokerage). Although the black bean price on 1 May was K888,500 per tonne, the price grew to about K942,500 per tonne on 14 May, which is an increase of K54,000 per tonne in only two weeks, according to the bean market data.

Presently, the local dollar exchange rate was at K 1,595 per dollar on 1 May, but it upturned to K1,675 per dollar on 14 May. Myanmar yields around 400,000 tonnes of black bean annually, and the bean is primarily exported to India. Similarly, about 50,000 tonnes of pigeon peas are produced yearly and exported to India as well.

Since 2017, India has been setting the import quota on beans, including black beans and pigeon peas. Myanmar has to export black beans and pigeon peas under a quota system and limit period. Consequently, according to market observers, there is no guarantee that we could get the prevailing market price this year. Following no assurance of black beans and pigeon peas in the market, the association suggested at the end-October 2020 that the local farmers grow the black-eyed beans more.

Source: The Global New Light of Myanmar

The world gold price is around $ 1843 and the local gold price has returned to 1625,000 kyats

On May 15, the world gold price was around $ 1,843, and the local gold price was back to 1,625,000 kyats, according to gold traders. The local gold price, which has been rising steadily since the central bank began selling dollars through some money changers, has returned to around 1625,000 lakh kyats. The local gold price jumped from around 200,000 kyats to around 1690,000 kyats between May 8 and noon on May 12. On May 13, the central bank began selling dollars through some money changers. The central bank sets the US dollar price at 1645 kyats per dollar through some money changers. 

At around 2 pm on May 14, 2021, the world gold price reached around 1,835 dollars and the price of Burmese gold returned to around 1625,000 lakh kyats. At around 2 pm on May 12, 2021, the world gold price rose to around 1,833 US dollars, and the local gold price jumped to around 200,000 kyats in five days, reaching a record high of around 1690,000 kyats. On May 11, 2021, the world gold price hit around $ 1,842, and the local gold price jumped around 100,000 kyats in four days, reaching a record high of around 1620,000 kyats. On May 10, 2021, the world gold price hit around $ 1,836, and the local gold price jumped over 60,000 kyats in three days to around 1580,000 kyats.

The lowest and highest monthly gold prices in the last six months were 1275,000-1335,500 kyats in August 2020; In September, it was 1298,000-1332,000 kyats. In October, it was 1307,500-1319,000 kyats. 12667700-1318,000 kyats in November; 1275,000-13333,000 kyats in December; In January 2021, it was 1316,500-13336,000 kyats. The lowest monthly and highest global gold prices were $ 1,549-1659 in February 2020; $ 1467-1673 in March; $ 1568-1729 in April; $ 1683-1748 in May; $ 1,680-1,779 in June; $ 1769-1975 in July; $ 1859-2075 in August; $ 1848-1975 in September; $ 1858-1933 in October; $ 1764-1966 in November; December 1776-1906 In January 2021, it was $ 1803-1958, with a gap of around $ 40 to over $ 200.

Source: Daily Eleven

Fuel oil import down by 1 mln tonnes in seven months (Oct-Apr)

MYANMAR imported nearly US$1.2 billion worth 2.7 million tonnes of diesel and gasoline during the past seven months (Oct-Apr) of the current financial year 2020-2021, indicating a sharp drop of 1 million tonnes ($663.347 million) compared to the corresponding period of last year, according to the Ministry of Commerce. In the current budget year, Myanmar imported 1.6 million tonnes ($721.173 million) of diesel and over 1 million tonnes (536.113 million) of petrol, as per data of the Commerce Ministry. Typically, a monthly oil import is estimated at $400 million, yet the oil importers face banking restrictions for maritime trade. Oil importers via land border can use informal payment Hundi system instead, said an importer. At present, the domestic fuel oil price has risen above 30 per cent per litre in three months.

The heightened coronavirus restriction and possible lockdown in Asia sparked oil demand concerns, coupled with a strong dollar exchange rate. The fuel oil was pegged at around K620 per litre for Octane 92, K750 for Octane 95, K660 for diesel and K670 for premium diesel in early February 2021 in the domestic retail market. On 13 May, it rallied to the highest of K1,005 for Octane 92, K1,090 for Octane 95, K1,005 fordiesel and K1,015 for premium diesel, according to the local fuel oil market. Domestic oil price is positively related to the global market and the dollar value. Crude oil futures have rallied to their highest finish in months, with WTI climbing above $65 per barrel in mid-May. Additionally, the foreign exchange rate also affects the petroleum price. The US dollar is gaining against Kyat in the local forex market starting from April, rising above K1,600 per dollar.

In mid-February, a dollar was worth only K1,430. Usually, Myanmar imports fuel oil primarily from Singapore, with monthly volumes touching 200,000 tonnes for gasoline and 400,000 tonnes for diesel. About 2,000 fuel stations and over 50 oil importer companies exist in Myanmar, Myanmar Petroleum Trade Association stated. Last year, the domestic oil prices declined from January 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 the lowest 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.

Source: The Global New Light of Myanmar

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In the first seven months of the current fiscal year, Myanmar’s foreign trade fell by almost 30 percent (over $ 5.3 billion) from the same period last year, and exports fell by $ 2.2 billion

In the first seven months of the current fiscal year, Myanmar’s foreign trade fell by almost 30 percent (over $ 5 billion) from the same period last year, and exports fell by more than $ 2.2 billion, according to figures released by the Ministry of Commerce. From October 1 to May 7 of the 2020-2021 fiscal year, the trade volume was only $ 18.086 billion, up from $ 23.428 billion in the same period last year. In the first seven months of the current fiscal year, Myanmar’s foreign trade fell to $ 5.342 billion from the same period last year. The percentage has dropped to almost 30 percent.

During that period, Myanmar’s exports were only $ 8.970 billion, down $ 2.264 billion from the same period last year. Imports were only $ 9.115 billion, down more than $ 3 billion from the same period last year. Myanmar trades with both foreign and maritime trade routes. During the period, maritime trade amounted to $ 11.726 billion, down $ 4.488 billion from the same period last year. Border trade amounted to $ 6.360 billion, down from $ 853.918 million in the same period last year. Animal products Fishery products; Mining products; Forest products; Finished CMP; Other exports are being exported. Imports include investment goods; Industrial raw materials; Consumer goods It is mainly importing CMP raw materials.

Myanmar’s foreign trade in the last fiscal year 2019-2020 was $ 36.731 billion, according to the Ministry of Commerce. In the 2018-2019 fiscal year, the foreign trade volume was $ 35.147 billion. In the first six months of 2018, foreign trade amounted to $ 18.728 billion. In the 2017-2018 fiscal year, the trade volume was $ 33.578 billion. In the 2016-2017 fiscal year, the trade volume was $ 29.209 billion. The main priority areas of the National Export Strategy 2020-2025 to implement export promotion are agro-based food production; Textile and clothing sector; Industry and electronics, fisheries sector, forest products, digital products and services, logistics services, quality management sector, trade Information Services; and innovation and entrepreneurship.

Source: Daily Eleven