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Domestic oil price surges on global cues in late February

Fuel oil prices are constantly edging up on the depreciation of Kyat against US dollar and a sharp increase in crude oil prices in the past two days, according to the filling stations in Yangon Region. On 1 January 2022, the prices stood at K1,390 for Octane 92, K1,440 for Octane 95, K1,375 for diesel and K1,385 for premium diesel, whereas the prices inched higher to K1,745 for Octane 92, K1,800 for Octane 95, K1,720 for diesel and K1,730 for premium diesel. There is a price gap of K345-360 per litre within two months, according to the local fuel oil market.

The fuel oil price is highly correlated with the foreign exchange rate. At present, the exchange rate is pegged at around K2,000 in the local forex market. Additionally, domestic oil price is positively related to global market. Oil prices jumped in the global market as Russia-Ukraine crisis escalated, with US$91.59 per barrel for WTI crude and $97.93 for Brent crude at the present time. When a dollar was valued only K1,330 in early February 2021, the fuel oil was estimated at K590 per litre for Octane 92, K610 for Octane 95, K590 for diesel and K605 for premium diesel then in domestic retail market.

Consequently, in a bid to steer dollar rally in local forex market, the Central Bank of Myanmar (CBM) sold US$65 million at its auction market rate in January this year. Additionally, the Ministry of Commerce in coordination with Myanmar Petroleum Trade Association implemented a scheme to distribute fuel oil at fairer rate through the government sponsored filling station chains starting from 22 September 2021. The total volume of fuel oil that are sold at very cheap rates is equivalent to the amount that the oil importers directly purchased the foreign currency from the CBM. The CBM has directly sold over $87 million to the fuel oil sector so far. Normally, Myanmar yearly imports 6 million tonnes of fuel oil from external markets, the Ministry of Commerce stated.

Source: The Global New Light of Myanmar

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Myanmar foreign trade tops $11.95 bln as of 18 February 2022

Myanmar’s external trade as of 18 February in the current six-month mini-budget 2021- 2022 (Oct-March)
financial year period slid to US$11.95 billion, which shows a drastic drop of $765.9 million as against the year-ago period, the Ministry of Commerce’s data showed. The international trade stood at over $12.72 billion in the corresponding period of last FY 2020-2021, according to the data released by the ministry.

Between 1 October 2021 and 18 February 2022, Myanmar’s export was worth over $6.1 billion whereas, the country’s import was relatively low at $5.85 billion. The border trade drastically fell by $1.9 billion as against the year-ago period owing to the closure of some border posts by the main trade partner China. However, the maritime trade was registered a significant increase of US$1.15 billion.

Myanmar exports agricultural products, animal products, minerals, forest products, and finished industrial goods while it imports capital goods, raw industrial materials, and consumer goods. The country’s export sector relies more on the agricultural and manufacturing sectors. The Ministry of Commerce is focusing on reducing trade deficit, export promotion, import substitution and market diversification. The external trade stood at $29.58 billion in the 2020-2021 FY, as per the Commerce Ministry’s statistics.

Source: The Global New Light of Myanmar

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From February 1 to the end of November 2021, Myanmar Investment Law allowed more than $ 3,552 million in foreign investment in 27 projects in nine sectors

From February 1, 2021 to the end of November 2021, under the Myanmar Investment Law, more than $ 3,552 million was approved for 27 projects in nine foreign investment sectors, according to the Ministry of Investment and Foreign Trade. During that period, foreign investment in each sector was $ 3,044.762 million; $ 179.1 million in transportation and communications; $ 162.483 million in the industrial sector; $ 65 million in the construction sector; $ 37.229 million in other services; $ 30 million in the hotel and tourism sector; $ 22.4 million for industrial zone construction; $ 6.379 million in the livestock and fisheries sector.

 In the agricultural sector, a total of US $ 3,552.396 million was approved for foreign investment with US $ 5.043 million. Manufacturing of electric vehicles; The Myanmar Investment Commission has invited domestic and foreign investment, as it will give priority to eight types of investment, including pharmaceuticals and healthcare products. Entrepreneurs are invited to submit proposals for the following types of investment projects.

The Myanmar Investment Commission will give priority to the following types of investment projects to meet the needs of the state development and nation-building activities: These activities are: (a) Fertilizer production; (B) Cement production activities; (C) Steel production activities; (D) Agriculture and Livestock; Activities related to these activities; (E) Production of value-added food products; (F) Manufacturing of electric vehicles; (G) Manufacturing of pharmaceutical and health products; (H) It is known that it is public transportation.

If Myanmar investors and foreign investors interested in the above investment sectors submit their proposals, the Myanmar Investment Commission; Relevant ministries and state and region governments will also provide necessary assistance. In the 2020-2021 fiscal year, foreign investment was the largest in the electricity sector with over $ 3,211 million, followed by the industrial sector with over $ 286 million, followed by the transport and communications sector with over $ 133 million, according to the Directorate of Investment and Company Administration.

Source: Daily Eleven

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CMP raw materials import peaks to $918.89 mln as of 11 February

Imports of raw materials by CMP (cut-make-pack) businesses have soared to US$918.89 million as of 11 February in the current six-month mini-budget period 2020-2021 since October 2020, which reflects an
increase of $107 million compared with the year-ago period, according to the Ministry of Commerce. The
figures rose from $728.38 million registered the last FY2020-2021, the Commerce Ministry’s data indicated. Myanmar’s garment exports witnessed a decline of over 20 per cent last year on the back of a slump in demand by the European Union market.

The raw materials imported by the CMP businesses fell simultaneously, stated the Ministry of Commerce. Consequently, some CMP garment factories permanently and temporarily shut down and left thousands of workers unemployed. Nonetheless, the industry is returning to normal after the COVID-19 vaccination programme for the workers, as per the HIS Markit’s September report. Exports of garments manufactured under the cut-makepack (CMP) system were valued at US$3.6 billion in the last FY2020-2021, according to data from the Myanmar Customs Department. The garment sector is among the prioritized sectors driving up exports.

Myanmar’s manufacturing sector is largely concentrated in garment and textiles produced on the Cutting, Making, and Packaging basis, and it contributes to the country’s GDP to a certain extent. Myanmar mainly exports CMP garments to markets in Japan and Europe, along with the Republic of Korea, China, and the US. 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 and $4.8 billion in the 2019-2020FY, according to the Commerce Ministry.

Source: The Global New Light of Myanmar

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Mitsubishi and Petronas to leave Myanmar’s Yedagun gas project

Malaysia’s Petronas and Japan’s Mitsubishi Corp. have announced they will sell shares in Myanmar’s Yedagun gas project. These companies are the last of the major energy companies to leave Myanmar since February 1 last year. A Mitsubishi spokesman told Reuters on February 18 that it would be difficult to stay afloat from a technical and economic point of view. The company indirectly owns 1.93% of its investment in the Yedagun gas project off the south coast of Myanmar.

They have already decided to leave the project, and talks were under way with partner companies from Japan. Petrtronas’s PC Myanmar (Hong Kong) Limited, a subsidiary of the Yedagun project, signed an agreement in July last year to sell Petronas’s investment in Myanmar. Petronas told Reuters earlier this month. A Petronas spokesman said the transfer was nearing completion but declined to name the buyer. PC Myanmar (Hong Kong) Limited has a 40.9% stake in the Yedagun project, with Myanmar Oil and Gas Corporation (MOGE) owning 20.5%.

In addition, a Japanese joint venture led by the Japanese government and JX Nippon Oil and Gas Exploration, a subsidiary of Eneos Holding, has a 19.3 percent stake, with the rest owned by PTTEP International of Thailand. “Eneos Corporation is in talks with partners on various possibilities,” a company spokesman told Reuters whether there were any plans to continue the gas project in Myanmar. Total Energies and Chevron, two energy companies involved in a Yadana gas project in Myanmar, are also in Myanmar. It announced last month that it would close its operations due to the deteriorating human rights situation.

Source: Daily Eleven

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More than 4,800 bridges built for development of border regions till January 2022

The Ministry of Border Affairs stated that more than 4,800 small and large bridges have been built for development of border regions up to the end of January 2022. The ministry is implementing the master plans for development of the border regions. In so doing, the first three-year short-term plan was implemented from 1993-94 financial year to 1995-96 financial year, the first five-year medium-term plan from 1996-97 to 2000-21 financial year, and the second five-year short-term plan from 2001-02 to 2005-06 financial year, totalling 13 years.

Furthermore, the ministry drew a 30-year master plan from 2001-02 to 2030-31 financial year. It was divided into six portions. Starting from the 2011-12 financial year, the master plan was shifted into the 20-year master plan for development of border areas. Such a master plan lasts from 2011-12 financial year to 2030-31 fiscal year. Up to January 31 2022 of the 2021-22 financial year, a total of 4,896 small and large ridges have been built across the nation, including 358 bridges of more than 100 feet in length and 4,372 bridges under the 100 feet in length and 166 suspension bridges.

During the period, the ministry built more than 10,303 miles long earthen roads, 7,207 miles long gravel roads, more than 177 miles long laterite roads, over 3,175 miles long asphalt roads, more than 46 miles long repaved roads, more than 91 miles long concrete roads, 543 miles long expanded roads, 5,101 miles long renovated roads, 2,422 conduits and 5,736 culverts.

Source: The Global New Light of Myanmar

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Thilawa SEZ attracts over US$2.149 bln so far

A total of 112 enterprises from 18 countries have ploughed in over $2.149 billion into Thilawa Special
Economic Zone under the Special Economic Zone Law as of end-December, 2021 since its establishment, the Directorate of Investment and Company Administration’s statistics indicated. At present, approximately 102 factories are running in the Thilawa SEZ. The SEZ has employed more than 12,000 permanent workers, including permanent and construction workers, according to the management committee. The businesses are primarily operating in Thilawa Zone A, and the development activities in Zone B is underway.

Myanmar is currently implementing three Special Economic Zones Thilawa, Kyaukpyu, and Dawei. Out of the three, Thilawa is leading with better infrastructure and successful businesses. More than 60 per cent of businesses in Thilawa is domestic- oriented manufacturing enterprises, while 40 per cent are export-oriented manufacturers, according to Myanmar Thilawa SEZ Holdings Public Ltd. There are free zones, promotion zones and other zones in the SEZs. A company exporting at least 75 per cent of the production in value is registered as a Free Zone investor and is exempt from paying income tax for seven years from the time it starts commercial operations.

Companies such as logistics, which support export-oriented manufacturing, can also be listed as free zone companies. Domestic-oriented manufacturing companies are regarded as promotion zone companies, and they are eligible for a five year holiday on income tax. Promotion zones are mainly based on the domestic market and the markets in SEZs. In this zone, investments can be made in manufacturing, housing, departmental stores, banking, insurance, schools, hospitals and recreational places. The central body and central working committees have been reestablished to enhance the SEZs.

The meeting of the Central body for Myanmar Special Economic Zone was convened on 14 February 2022, highlighting the development of the three SEZs, proceeding in line with international regulation regarding the contract, implementation of the Kyaukphyu SEZ which can create job opportunities and help contribute to the State’s economy. While the manufacturing sector absorbed the largest share of foreign investments, the investments were also pumped into the trading, other services, logistics, hotel and tourism, and real estate sectors. Japan has topped the list of foreign investors so far, accounting for over 33 per cent of the overall investment, followed by Singapore and Thailand. FDI also flowed into the SEZs from the Republic of Korea, Hong Kong (SAR), the UK, Australia, the UAE, Malaysia, Austria, China (Taipei), Denmark, Brunei Darussalam, Viet Nam, France, Switzerland, and the Netherlands as well.

Source: The Global New Light of Myanmar

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Myawady border trade value increases
to double in current mini-budget period

The value of border trade through Myawady between Myanmar and Thailand doubled to US$881.24 million between 1 October and 4 February in the current mini-budget period 2021-2022, indicating a sharp increase of $476.507 million as against a year ago period, according to the statistics released by the Myanmar Customs Department. The trade through the Myawady border stood at over $404.7 million in the corresponding period of the last FY2020-2021.

Myawady-Mae Sot border trade remains normal amid the COVID-19 restrictions, according to the Myawady Chamber of Commerce. Myanmar ships tonnes of corn to Thailand through the Myawady border. Thailand gives green light to corn imports through Mae Sot under zero tariff (with Form-D), between 1 February and 31 August. Myanmar exported approximately 1.6 million tonnes of corn were delivered to Thailand in the FY2020-2021.

Next, Thailand is suppressing Intellectual Property infringements at cross-border points to strengthen the trust with the trading partners and create a better investment climate. There are seven border posts between Myanmar and Thailand-Tachilek, Myawady, Kawthoung, Hteekhee, Myeik, Mawtaung and Maese. The majority of the border trade with Thailand is conducted via the Myawady border post. Myanmar primarily exports corn, natural gas, fishery products, coal, tin concentrate (SN 71.58 per cent), coconut (fresh and dry), beans, and bamboo shoots to Thailand. It imports capital goods such as machinery, raw industrial goods such as cement and fertilizers, consumer goods such as cosmetics and food products from the neighbouring country.

Source: The Global New Light of Myanmar

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India changes import policy on green gram quota

India imposed import restrictions on green gram which were previously traded with the relaxations, according to Notification S.O 624 (E) of India’s Ministry of Commerce and Industry issued on 11 February.
For black gram and pigeon pea, India extended relaxations of conditions regarding clearance consignment until 31 March 2022. However, import restriction on the green gram as per the notification has been effective starting from 11 February.

The policy changes will wreak havoc on those green gram imported from Myanmar that have the bill of lading after 11 February. To tackle this problem and unnecessary price drop, Myanmar’s Ministry of Commerce held a coordination meeting on 14 February to govern the market and have a steady export to India. Union Minister for Commerce Dr Pwint San gave a remark that they will negotiate with Indian counterparts through the government-to-government relations.

Furthermore, the association concerned must strive for market stability and penetrate more external markets including European Union, which can offer a better price, he added. There are approximately 9.9 million acres of various beans and pulses across the country, with an annual production of 4.1 million tonnes. Myanmar shipped about 700,000 tonnes of green gram to 64 foreign trade partners in the 2020-2021 financial year. Between 1 October 2021 and 4 February 2022 of the mini-budget period, 147,326 tonnes of green gram were delivered to the global market. Of them, 18,842 tonnes were sent to the Indian market, constituting 12 per cent of overall green gram exports. 

Source: The Global New Light of Myanmar

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Myawady border sees abundant corn supply to Thailand under zero tariff

Myanmar has been delivering a large supply of corn to Thailand through the Myawady border under the preferential zero tariff. The price of corn is estimated at over K800 per viss (a viss equals 1.6 kilogrammes),
said corn traders. Thailand gives the green light to corn imports through Mae Sot under zero tariff (with Form-D), between 1 February and 31 August. Thailand has granted tax exemption on corn imports between February and August. However, Thailand imposed a maximum tax rate of 73 per cent on corn import to protect the rights of their growers if the corn is imported during the corn season of Thailand.

From 1 February 2022, more than 100 trucks carrying corn have been conveyed to Thailand. The corn traders have a fullinventory in the warehouses in Myawady border city, U Min Khaing, Chair of the Myanmar Corn Industrial Association said. Myanmar is targeted to deliver 1.5 million tonnes of corn to the external market in the current 2021-2022 corn season. Last 2020-2021 financial year, the country shipped more than 1.7 million tonnes of corn to Thailand, U Min Khaing was quoted as saying.

The price is on the rise on the back of strong foreign demand and Kyat depreciation on a US dollar in the local exchange market. The prevailing price of corn is K820 840 per viss in the Yangon market, the Yangon Region Chamber of Commerce and Industry. Myanmar exported 2.3 million tonnes of corn to foreign trade partners in the previous FY. The majority of them were sent to Thailand and the remaining went to China, India and Viet Nam. At present, corn is cultivated in Shan, Kachin, Kayah and Kayin states and Mandalay, Sagaing and Magway regions. Myanmar has three corn seasons – winter, summer and monsoon. The country yearly produces 2.5-3 million tonnes of corn.

Source: The Global New Light of Myanmar