Myanmar’s manufacturing sector attracts more than $187 million in past eight months

A total of 41 foreign enterprises pumped US$187.426 million into Myanmar’s manufacturing sector in the past eight months (April-November) of the current financial year 2022-2023, including capital expansion by the existing enterprises, as per the statistics released by the Directorate of Investment and Company Administration (DICA). Myanmar attracted foreign direct investments of $1.459 billion from 58 enterprises during the April-November period. The majority of the investments were brought into the manufacturing sector. The agriculture sector drew $3.5 million from two projects.

The power sector received $817 million from 10 projects, while one enterprise put $29 million in the real estate sector and two other foreign enterprises made an investment of $413.068 million in the service sector respectively. The hotels and tourism sector attracted less than 1 million. The mining sector received $7 million from one project, while one enterprise also put investments of less than a million into the hotels and tourism sector and some capital expansion of the existing businesses is also seen.

Additionally, the livestock and fisheries sector saw a capital expansion of $1.545 million. The manufacturing enterprises and businesses that need a large labour force are prioritized to create job opportunities for the local community, according to Myanmar Investment Commission. Although some labour-intensive enterprises faced financial hardship amid the COVID-19 negative impacts and the political changes, the industry is now returning to normal after the COVID-19 vaccination programme for the workers, as per the HIS Markit’s September report.

In a bid to boost factory productivity with a healthy workforce in the garment industry, Mobile Medical Check to garment workers took place in Yangon and Nay Pyi Taw, supported by UNICEF Myanmar. Moreover, Myanmar Garment Manufacturers Association has organized Labour Law Awareness and WCC Training since July 2022, with the support of UNICEF Myanmar. It aims to provide the soft skills needed for industrial development and create a better workplace for garment workers. Additionally, the association launched a voluntary labour compliance assessment-VLCA Online System on 10 November 2022.

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. There are active 541 factories operated under MGMA. The majority of them are from China, followed by Myanmar and the Republic of Korea. Myanmar has drawn foreign direct investment of more than $647.127 million from 49 enterprises in the past mini-budget period (October 2021-March 2022). Of them, 40 foreign enterprises put investments in the manufacturing sector, pumping an estimated capital of $202.667 million.

Source: The Global New Light of Myanmar

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Mang Wein border point expected to be reopened after Chinese New Year

Trade activity at Muse-Mang Wein crossing point, which performed the majority of trade between Myanmar and China, is expected to resume after the upcoming Chinese New Year in 2023, said U Min Thein, vice chair of Muse Rice Wholesale Centre. China has restricted border access through Mang Wein border point amid the COVID-19 cases since 30 March 2021. This being so, it was about one year and nine months that the trade at Mang Wein was suspended. The border checkpoint is yet to be reopened. Since April 2022, China has shut down the Ruili-Kyalgaung crossing point and it was eased on 10 December 2022.

Following the reopening of Kyalgaung border, the checkpoints linking to Kyalgaung crossing point in Muse trade post (Nantaw, Sinphyu and Mang Wein) are likely to be reopened soon, traders engaged in Muse border forecast. “On 10 December, Kyalgaung crossing point was reopened. Both people from Shweli (Ruili) and Kyalgaung are free to pass the point. It raised expectations of traders for the reopening of Mang Wein, Nantaw and Sinphyu checkpoints. Speculation about resumption of cross border trade at those points is going around,” U Min Thein said.

On 18 October, Myanmar’s officials and counterparts from Tathong, Yunnan Province negotiated the promotion of bilateral cross-border trade and reopening of Mang Wein checkpoint through a video conferencing. Prior to the pandemic, Kyalgaung was the busiest and biggest trade post and it performed the highest trade in the China-Myanmar border. Those traders involved in Muse trade zone are relying on the Ruili city. There is a direct trade channel to Ruili through Kyalgaung point so the traders have a smooth transport. This route brings easier and better access to Ruili from Muse border post. Only when the Kyalgaung border post is reopesned can the trade boost, traders elaborated.

China shut down all the checkpoints linking to Muse border amidst the COVID-19 pandemic. Of the checkpoints, Kyinsankyawt has resumed trading activity from 26 November 2021. Myanmar daily delivers rice, broken rice, pulses, rubber, watermelon, fishery products, chilli pepper and other food commodities to China through Kyinsankyawt with about 100 trucks and building materials, electrical appliances, pharmaceuticals, fertilizer, household goods and industrial raw materials are imported into the country with 40 trucks. Myanmar has opened five border trade posts with China; Muse, Lweje, Kanpaiti, Chinshwehaw and Kengtung. Majority of the trade is carried out through Muse post, Ministry of Commerce’s data indicated. 

Source: The Global New Light of Myanmar

Dollar exchanged at K2,850 higher than CBM’s reference rate

Although the Central Bank of Myanmar (CBM) set the reference exchange rate at K2,100 per dollar, it reached K2,850 per dollar in the market, according to local forex traders. The CBM released a statement at a reference rate within the margin of ± 0.3 for selling, purchasing and exchanging foreign currency on 10 August.

Therefore, the banks and business persons including exchange counters set the purchase price at K2,100 per dollar and the selling price at K2,106 per dollar. Despite the set prices, the purchase price was K2,835 per dollar while the selling price was K2,9855 per dollar in the unauthorized market on 17 December. Thus, the CBM declared on 15 December that there is no plan to fix the reference rate, despite a gap between the market price and the reference price.

Some unscrupulous traders spread rumours of possible changes in CBM’s reference rate and the various reasons for rising dollar prices, to manipulate the market, the CBM stated. In addition, CBM sold US$ 108 million, including USD liquidity and salary transactions, into the market in 45 days and announced further selling in the future. Also, the hard currency US dollar hit a high of over K4,500 in the forex market at August-end. Consequently, the CBM sold dollars at its auction market for the sectors in need, to stabilize the exchange rate. A total of US$443.8 million were sold at an auction rate in 2021 as well. 

Source: The Global New Light of Myanmar

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Sino-Myanmar bilateral trade totals over US$5 bln in seven months

The value of trade with Myanmar’s main trade partner China through maritime and sea trade channels crossed US$5 billion in the first seven months (April-October) of the 2022-2023 financial year, comprising exports worth $1.995 billion and imports valued at $3.082 billion, according to statistics released by the Ministry of Commerce. Myanmar primarily exports agri-products to China through the five land borders (Muse, Lweje, Chinshwehaw, Kampaiti and Kengtung.

However, trade in agricultural products was frequently stopped on account of China clamping down on illegal trade on land borders. Furthermore, China stepped up border control measures to contain the spread of COVID-19, hindering border trade in the previous years. At present, although China eased coronavirus restrictions, only the Kyinsankyawt crossing out of the Sino-Myanmar land borders linking to the Muse post are reopened.

The value of bilateral trade with China stood at $4.3 billion in the 2021-2022 mini-budget period, $9.82 billion in the 2020-2021FY, $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 financial year and $10.8 billion in the 2016-2017FY respectively. Rice, beans and pulses, corn, fruits and vegetables, fishery products, rubber, chilli peppers and other food commodities are exported to China, whereas machinery, plastic raw materials, consumer products and electronic appliances flow into Myanmar. 

Source: The Global New Light of Myanmar

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YRIC green-lights one domestic business, one foreign enterprise on 14 De

The Yangon Region Investment Committee (YRIC) endorsed one domestic project and one foreign enterprise in the manufacturing sector, with an estimated capital of over K4.08 billion and US$0.50 million at a meeting 12/2022 held on 14 December at the YRIC office in Yankin Township. Those two businesses are expected to create 295 jobs. Moreover, the meeting discussed the general issues of 16 companies and gave the go-ahead for capital expansion of $2.483 million by four companies. The manufacturing sector has attracted the most foreign investments in Yangon Region, with enterprises engaging in the production of pharmaceuticals, vehicles, container boxes, and garments on a Cutting, Making, and Packing (CMP) basis.

To date, foreign investments from China, Singapore, Japan, Hong Kong, the Republic of Korea, Viet Nam, India, China Taipei, Malaysia, the British Virgin Islands and Seychelles are arriving in the region. To simplify the verification of investment projects, the Myanmar Investment Law allows the region and state Investment Committees to grant permissions for local and foreign proposals, where the initial investment does not exceed K6 billion, or $5 million. Myanmar attracted foreign direct investments of $1.459 billion from 58 enterprises during the April-November period of the current financial year 2022-2023. Singapore is the top source of FDI in Myanmar so far.

Fourteen Singapore-listed enterprises pumped in foreign investments of $1.154 billion into Myanmar in the past eight months. Hong Kong SAR stood as the second largest investor this FY with an estimated capital of over $164.9 million by 12 enterprises and the existing ones. China is ranked third in the investment line-up with more than $94 million from 26 businesses and the existing ones, according to the Directorate of Investment and Company Administration. Two enterprises from the Republic of Korea also pumped $5.4 million into Myanmar, with the existing ones. One enterprise each from Belize, China Taipei, the UK and Japan also made investments in the past eight months respectively. The existing enterprises from India, Bangladesh, Thailand, Switzerland and Seychelles also increased their investments.

Source: The Global New Light of Myanmar

Fuel oil prices jump by K200 per litre within two days

The prices of fuel oil were up by K200 per litre within two days, according to the fuel oil market. On 13 December, the prices of fuel oil were K1,795 per litre for Octane 92, K1,885 for Octane 95, K2,130 for diesel and K2,205 for premium diesel. On 15 December, the prices rose to K1,925 per litre for Octane 92, K2,010 for Octane 95, K2,355 for diesel and K2,435 for premium diesel. The domestic fuel prices are following the increase in price index set by Mean of Platts Singapore (MOPS), the pricing basis for many refined products in southeast Asia, according to the Supervisory Committee on Oil Import, Storage and Distribution of Fuel Oil.

Consequently, the prices touched a high of K2,605 per litre for Octane 92, K2,670 for Octane 95, K3,245 for diesel and K3,330 for premium diesel in late August. The committee is steering the oil sector effectively to ensure adequate supply in the domestic market and price stability for energy consumers. The committee is issuing the daily reference rate for oil to offer a reasonable price to energy consumers. The reference rate is set on the MOPS’ price assessment, shipping cost, profit margin, premium insurance, tax and other general costs. The rates for regions and states other than Yangon are evaluated after adding the transportation cost and the retail reference rates daily cover on the state-run newspapers and are posted on the media and official website and Facebook page of the department on a daily basis starting from 4 May.

As per the statement, 90 per cent of fuel oil in Myanmar is imported, while the remaining 10 per cent is produced locally. The domestic fuel price is highly correlated with international prices. The State is steering the market to mitigate the loss between the importers, sellers and energy consumers. Consequently, the government is trying to distribute the oil at a reasonable price compared to those of regional countries. Some countries levied higher tax rates and hiked oil prices than Myanmar. However, Malaysia’s oil sector receives government subsidies and the prices are about 60 per cent cheaper than that of Myanmar. Every country lays down different patterns of policy to fix the oil prices. Myanmar also poses only a lower tax rate on fuel oil and strives for energy consumers to buy the oil at a cheaper rate.

Source: The Global New Light of Myanmar

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Myanmar ships over 140,000 tonnes of rice to Bangladesh under G-to-G pact

According to the government-to-government pact between Myanmar and Bangladesh, Myanmar has conveyed over 140,000 tonnes of white rice to Bangladesh, according to the Ministry of Commerce. Myanmar and Bangladesh inked a Memorandum of Understanding (MoU) on rice trade on 8 September this year. In line with this MoU, Bangladesh has agreed to buy 250,000 tonnes of white rice and 50,000 tonnes of parboiled rice from Myanmar yearly between 2022 and 2027. In accordance with the MoU, Bangladesh’s Directorate General of Food and Myanmar Rice Federation signed a sales contract for 200,000 tonnes of Myanmar’s white rice to be exported to Bangladesh.

As per the sales contract, Myanmar has exported a total of 143,225 tonnes of white rice by 19 ships to Bangladesh as of 12 December 2022. The remaining will be delivered by the deadline. As per the MoU between Myanmar and Bangladesh on the rice trade, 48 companies, under the supervision of the Myanmar Rice Federation, are to export 200,000 tonnes of rice to Bangladesh with Chinese yuan payment between October 2022 and January 2023. Following the contract, white rice (ATAP) GPCT Broken STX variety will be delivered. The FOB prices were 2.78856 Yuan per kilo and 2,788.56 Yuan per tonne.

The Export/Import division of the Trade Department issued 42 export licences worth over 534 million Yuan for 41 companies to convey 191,700 tonnes of rice to Bangladesh. Since 7 September 2017, Myanmar and Bangladesh have engaged in rice trade under the government-to-government pact. That MoU stated that Bangladesh has agreed to buy Myanmar’s white rice (250,000 tonnes) and parboiled rice (50,000) tonnes yearly between 2017 and September 2022. Bangladesh’s Directorate General of Food and MRF signed the sales contracts as per the MoU and Myanmar sent 100,000 tonnes of rice to Bangladesh each in 2017 for the first time and 2021 for the second time, as per the sales contract. 

Source: The Global New Light of Myanmar

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Myanmar’s exports rise 15 per cent in FY 2022-2023

Myanmar’s exports significantly grew by about 15 per cent in the eight months of the current financial year 2022-2023 from the corresponding period of last year. Between 1 April and 2 December of the current FY2022-2023, Myanmar’s exports soared to US$11.17 billion from $9.7 billion in the year-ago period. The figures reflected a sharp increase of over $1.44 billion compared with a year-ago period, according to data from the Ministry of Commerce.

The negative pandemic consequences dealt a severe blow to the agriculture, livestock and mineral sectors during the past mini-budget period.  As China eases some virus rules and regulations, the export sees a slight increase in the agriculture sector this FY. At present, the CMP garment sector raises its head again after the vaccination programme to the factory workers as well. Of the seven export groups, fisheries, mineral and other exports showed a decrease compared to the year-ago period.

The values of export were registered at $2.37 billion for agro products, $18.2 million for livestock, $491.2 million for fishery products, $205 million for minerals, $97.14 million for forest products, over $7.65 billion for manufactured goods, and $320.35 million for other 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.

Source: The Global New Light of Myanmar

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Export earnings facilitate import licence application

The Myawady Border Trade Zone under the Department of Trade notified that import licence application can be made as long as there are export earnings in the bank account of applicants, except for goods that are not allowed to be imported via the Myanmar-Thai land borders. According to the Export/Import Bulletin 10/2022, export earnings and other incomes including salary and wage remittances of Myanmar nationals in other countries will be allowed to use in the importation of commodities.

Therefore, importers will have to use the proceeds to make payments for imports through their respective banks. Among the land borders with neighbouring Thailand, the Myawady border trade zone, which imports most goods to the domestic market, made trading worth US$1,494.796 million in over eight months from 1 April to 2 December of this financial year, stated the Ministry of Commerce.

Among these, imports from Thailand were worth $978.878 million. The cross-border trade accumulated $1,654.481 million year on year with $938.591 million worth of imports from Thailand. Therefore, there was a decrease of $199.972 million year on year while imports increased by $40.287 million, according to the Ministry of Commerce.

Source: The Global New Light of Myanmar

Kyat depreciation against US dollar slows significantly

Myanmar managed to hold back Kyat depreciation against greenbacks and the Kyat-US Dollar over-the-counter rate has dipped in the local forex market. In August, a dollar value hit an all-time high of over K4,500 in the grey market. The prevailing exchange rate is K2,820 for buying and K2,850 for selling in the grey market.

However, the Central Bank of Myanmar (CBM) set the reference exchange rate for the US Dollar at K2,100. In order to strengthen the domestic currency in the local forex market, the CBM set the currency trading band at 0.3 per cent for the Kyat to fluctuate between these two specified upper and lower exchange rates for transactions, selling or buying, according to a directive issued by the CBM on 10 August 2022.

Therefore, financial institutions including banks and informal money exchanges are instructed to set a dollar value at K2,100 for buying and K2,106 for selling. However, those rates are not effective in trading for now. Consequently, the CBM sold dollars at its auction market for the sectors in need, to control the soaring dollar.

A total of $443.8 million were sold at an auction rate in 2021 as well. Last September 2021, a dollar value hit a peak of over K3,000 in the black market, pushing pure gold up to K2.22 million per tical. Under the guidance of the Central Committee on Ensuring Smooth Flow of Trade and Goods, the Monitoring and Steering Committee on Gold and Currency Market was formed on 17 December 2021 as gold and currency market stability play a crucial role in the trade facilitation.

The objectives of the committee are inspecting and prosecuting market manipulation, checking if there is compliance with payment rules in the domestic market, and proceeding against those unscrupulous traders who intend to interfere with the free and fair operation of the market under the existing laws, by-laws and regulations in line with the official directives, illegal foreign currency holding, illegal trade and taking legal actions against price manipulators.

Source: The Global New Light of Myanmar