CBM sells $93.8 mln in past six months

The Central Bank of Myanmar (CBM) sold US$93.8 million at its FX auction rate in the past six months (February-July), according to the auction results released by the CBM. In July, the CBM reportedly sold $6 million on 8 July and $3 million each on 5,6,7,14,15,16,26,27, 28, 29 and 30 July in the auction market, totalling $39 million which is the largest amount sold in the past six months. Consequently, the exchange rate stands at around K1,645 in July-end, according to the CBM. The bullish hard currency gained in the local forex market, reaching the peak of K1,730 on 12 May from K1,330 in January-end. In a bid to strengthen the local currency and govern the market volatility, the CBM reportedly sold about 6.8 million dollars on 3 February 2021, $12 million in April, $24 million in May, $12 million in June and $39 million in July in the auction market. 

The CBM trades the foreign currency with the authorized private banks under the rules and regulations of the FX auction market. The currency intervention is required to steer the own currency value. It is one of the responsibilities of the CBM to control the price. This is why the CBM practised the foreign exchange intervention.  The dollar gain will benefit the exporters. Yet, it will hike up the local food prices. The currency intervention is required to steer the own currency value. The current political changes in Myanmar and the COVID-19 impacts affect the currency market. Some people want to hold the hard currency during difficult times, a market observer shared his opinion. 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. The rate fluctuated between K1,585 and K1,730 in May and it moved to the maximum of K1,595-1,620 last month. 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

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Myanmar rice market sees flat price amid closure of warehouses

The price of rice in the domestic market is quite stable as the warehouses and the wholesale centres are temporarily shut down amid the COVID-19 surge. High-quality rice is demanded in the domestic market and the price moves in the range of K36,000-42,000 per bag depending on different varieties. The low-quality rice is priced between K21,500 and K33,000 per bag. The price has remained unchanged in recent days and trade is nearly halted as the COVID-19 cases are spiking in the country. Yangon market sees low supply from Pyapon, Mawgyun, Dedaye, Kungyangon, Wakhema, Kawhmu, Twantay, Myaungmya, Kyaiklat, Laputa and Shwebo areas. Next, Border trade disruption led to a sluggish market yet the flat price occurs in the border export market.

The prices of white rice varieties range US$375 to 405 per metric ton, the price of glutinous rice price was priced $600-610 per MT and the broken rice fetched $300-335 per MT depending on the different varieties and quality, according to Myanmar Rice Federation (MRF). The volume of rice and broken rice exported in the nearly eight months (1 October-28 May) of the current financial year 2020-2021 was estimated at over 1.14 million metric tons, generating US$546.6 million income, the Ministry of Commerce reports. The country shipped $576.28 million worth of 1.958 million tonnes of rice and broken rice in the same corresponding period of last FY.  Myanmar exported 802,000 tonnes of rice and 601,000 tonnes of broken rice, totalling 1.14 million tonnes.

The export volume in the past eight months showed a decrease of over 500,000 tonnes as against last FY. At present, rice shipment to European countries is declining. However, Myanmar is mostly delivering rice and broken rice to China, Malaysia, the Philippines and Bangladesh and shipping broken rice to China, Indonesia, Belgium, Senegal and The Netherlands. The market cools down for now due to the transport difficulties triggered by the COVID-19 impacts and Kyat depreciation. China Customs granted licences to 47 Myanmar companies on 26 February 2021 to legally export the rice to China through the Muse land border this year.

The authorized companies for rice export to China increased this year as against last year. However, the permitted volume of rice for exports has not been confirmed yet, Muse Rice Wholesale Centre stated. Moreover, China banned all the border posts on 8 July as Myanmar is battling against the exploding pandemic. As a result of this, the agricultural exports dropped dramatically. Myanmar set the rice export target at only 2 million tonnes in the current FY as summer paddy growing acreage drops. Weather changes affected irrigation water resource availability on agriculture, MRF stated.  Myanmar generated over $800 million from rice exports in the previous FY2019-2020 ended 30 September, with an estimated volume of over 2.5 million tonnes.

Source: The Global New Light of Myanmar