textile

By the end of May of the 2020-2021 fiscal year, more than $ 3,750 million in foreign investment has been approved, with more than $ 254 million in the manufacturing sector

by INVESTMENT

As of the end of May of the 2020-2021 fiscal year, more than $ 3,750 million in foreign investment was approved, including more than $ 254 million in foreign investment, including increased investment in the manufacturing sector, according to the Directorate of Investment and Company Administration. From the 2016-2017 fiscal year to the end of May 2021, Myanmar citizens invested more than 2,586 billion kyats in Myanmar’s manufacturing sector, accounting for nearly 23 percent of the total national investment, according to the Directorate of Investment and Company Administration.

From the 2016-2017 fiscal year to the end of January 2021, the national investment in the real estate sector was over 3,071 billion; In other sectors, more than 1,868 billion kyats; In the manufacturing sector, more than 2556 billion kyats; Over 1,141 billion kyats in the telecommunications and transportation sector; Over 1,125 billion kyats in the hotel and tourism sector; More than 436 billion kyats in the energy sector; Over 324 billion kyats in the industrial zone sector; Over 347 billion kyats in the livestock and fisheries sector; Over 228 billion kyats in the construction sector; In the mining sector, more than 75 billion kyats; More than 42 billion kyat has been invested in the agricultural sector and more than 13 billion kyat in the oil and gas sector.

In the fiscal year 2019-2020, 130 new Myanmar venture capital projects were approved, with a total investment of over 1,881 billion kyats, including a total investment of over $ 413 million. The Myanmar Investment Commission has approved a total of 130 new projects for Myanmar citizens in the 2019-2020 fiscal year with a total investment of US $ 266.873 million, including US $ 266.873 billion, for 1535.075 billion kyats. 1881.459 billion kyats was allowed to operate, including 618 million. The Myanmar Investment Commission has approved a total of 245 new ventures for foreign investment in the 2019-2020 fiscal year with a total investment of $ 4.235 billion, and has approved a total investment increase of $ 1.291 billion for 110 existing projects, including an increase in investment of $ 5.56 billion.

Source: Daily Eleven

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About 7,000 cattle stranded in Muse

by TRADING

With China stepping up border security for COVID-19, live cattle trading has ground to a halt, and about 7,000 cattle have been stranded in Muse town since December 2020. The domestic companies are sending cattle in line with Standard Operating Procedure to China through the Muse border. Before COVID-19, cattle were highly demanded. During the early outbreak of coronavirus, about 10 traders from China entered Myanmar to purchase over 1,000 herds of cattle per day. The resurgence of COVID-19 in Myanmar prompted China to tighten its border areas with Myanmar. Consequently, it was seven months that live cattle trading was halted. The traders are facing many hardships as it is difficult to take care of the cattle in yards during the rainy season. The traders have been burdened by labour wages, cost of feedstuff, healthcare services, and other general costs.

Furthermore, Chinese traders are constantly purchasing the cattle on the black market across border between Myanmar and China, said Chair U Soe Naing of the Mandalay Region Cattle Exporters Association. At present, the black market has been stronger. The legitimate market has halted since late 2020. The illegal market is happening. At present, the border trade is illegally carried out like the trade four years ago. Following about 10,000 cattle stranded in Muse last year, traders embarked on the illegal sales, he continued. For legitimate trade, China permits live cattle import only after ensuring the cattle is free from 20 diseases including Foot and Mouth Disease, along with vaccination certificates, health certificates, and farming registration certificates. Yet, those import criteria do not matter on the black market.

That is why Mandalay Region Cattle Exporters Association requested the officials concerned to deal with this black market and strive for resumption of the cattle trade. Myanmar’s live cattle export is heavily relying on China market due to a good price although Myanmar has other external markets such as Laos, Thailand, Malaysia and Bangladesh. The Ministry of Commerce grants a permit to each company for 100 cattle export, and the permit is valid for three months. The companies can be taken legal action if they do not sell the cattle during the three months. Live cattle export was allowed in late 2017 to eradicate illegal exports, creating more opportunities for breeders, promoting their interests and generating more revenues. Myanmar shipped US$360 million worth of animal products, including cattle, to the external markets in the financial year 2018-2019. The value of animal product exports dropped by $100 million in the 2019-2020 FY as against a year-ago period, following negative impacts of COVID-19. 

Source: The Global New Light of Myanmar

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Watermelon growers suggested 50% production drop next growing season

by TRADING

Watermelon growers flooded markets with excess supply this year and led to a market failure. Consequently, they are suggested to reduce the sown acreage acres by 50 per cent for the coming season, cross-border fruit depots stated. This year, about 30,000 trucks of watermelon and 12,000 trucks of muskmelons were conveyed to China via the land border. Nevertheless, a thousand trucks went in vain as they stranded in the road part, affecting the quality of the fruits. Some watermelons have been disposed of as well. The exports of watermelon drastically plunged as against last year as watermelon supply is exceeding the demand and transport delay triggered by the heightened COVID-19 measures in the border areas harm the quality of the fruits. As a result of this, the traders are encouraged to keep market balance and maintain the quality, Khwar Nyo Fruit Depot stated.

As China is stepping up the coronavirus containment measures in the border areas, the exporters of agricultural products including watermelon are suffering amid the COVID-19 resurgence. This year, some watermelon trucks returned from the Myanmar-China North-East border checkpoint as the watermelon was not traded well and the truck drivers were no longer bear the cost and tariff on the China border. Additionally, starting from 20 April 2021, the coronavirus test is mandatory for cross-border traders. Following the detection of the coronavirus cases in border Ruili, China restricted border access at the Man Wein checkpoint. Ruili-Kyalgaung river crossing has been also closed. Only Kyinsankyawt post is available for cross-border trade, causing delays and long queues. It takes about a month for a truck to enter the checkpoint.

As a result of this, the cross-border fruit depots suggest that the growers harvest the watermelon depending on the market condition to avoid a mismatch between supply and demand. A truckload of watermelon (855 variety) fetches 45,000-65,000 Yuan in mid-March. The price drastically plunged to 13,000 Yuan in mid-May and it does not even cover the truck freight rate. Myanmar’s watermelon market earlier relied only on China. Myanmar shipped 45 tonnes of seedless watermelon to the Dubai market in December 2020 and January 2021. After the country achieves success in the Dubai market, Myanmar has a plan to expand its market to Hong Kong SAR, the UAE and Qatar, the association stated. On 5 January 2021, 105th mile Fruit Wholesale Centre released a statement that the number of watermelon and muskmelon trucks for exports is to be set to govern the market. Myanmar yearly exports over 800,000 tonnes of watermelon and about 150,000 tonnes of muskmelons to China, the association stated. 

Source: The Global New Light of Myanmar

Employees clean and wash farmed fish at Hlaing Htate Khaung Cold Store in Yangon, Myanmar on August 29, 2018. Photograph: Taylor Weidman/Bloomberg

Livestock, fisheries attract six foreign investment projects in eight months

by INVESTMENT

Livestock and fisheries sector has attracted six foreign investment projects as of May-end in the current financial year 2020-2021 since October, according to the Directorate of Investment and Company Administration (DICA). Those businesses brought in about US$19.2 million, including the expansion of investments by the existing joint ventures.

They are executing broiler farm, pig farming and sales of pigs, production and farming of layers and shrimp, as per data of the DICA. Since 1988-1989 FY, about US$924 million of FDI have flowed into the livestock and fisheries sector. Next, 16 countries have put investment in the livestock and fisheries sector so far.

Among them, Thailand has topped the list of investments, with over $380 million, followed by Singapore with about $130 million. Myanmar’s livestock and fisheries sector is crucial to the livelihoods of many vulnerable households and contribute to improving nutritional outcomes in the country.

Source: The Global New Light of Myanmar

Production and new orders continue to fall in Myanmar’s manufacturing sector, with kyat-denominated exchange rate speculation against the dollar, scarcity of raw materials and rising in shipping costs

by MANUFACTURING

Production and new orders continue to fall in Myanmar’s manufacturing sector, with kyat-denominated exchange rate speculation against the dollar and prices continue to rise due to scarcity of raw materials and rising shipping costs, according to the Nikkei Myanmar Manufacturing PMI for June 2021 (Manufacturing Purchasing Manager’s Index). Many factories and customers’ businesses were closed, leading to a decline in jobs and purchases. During this period, the kyat was devalued against the dollar. Respondents often pointed out that prices continued to rise due to scarcity of raw materials and rising shipping costs.

The single IHS Markit Myanmar Manufacturing PMI, the only key indicator of productivity, rose from 39.7 in May to 41.5 in June, indicating a tenth consecutive month of decline in manufacturing conditions. Productivity by local producers in Myanmar fell further in June, but at a weaker rate. At the end of the second quarter, domestic demand remained weak and new orders fell sharply. The decline has been linked to a shortage of cash and a rise in prices. Overall, the current decline is one of the highest in the survey’s five-and-a-half-year history.

The workforce continued to decline sharply, with respondents pointing to workers returning to their hometowns. Despite the weakening of demand, raw material shortages and factory closures led to a sharp rise in backlog in June. In terms of prices, inflation in production costs rose, but weakened from a record high in May. Respondents said the exchange rate was deteriorating; They continue to point to shortages of raw materials and rising transportation costs. Companies reported shifting part of the initial cost burden, and the inflation rate for selling prices was the second highest in the survey so far. The survey is based on original data collected from industry by IHS Markit and supported by the Japan-based Nikkei Media Group.

Source: Daily Eleven

USD vs Kyat up by over K380 in first six months

by ECONOMY

The US dollar exchange rate against Myanmar Kyat has risen by over K380 per dollar in the first six months of 2021, the local foreign exchange market’s data showed. Although the dollar exchange rate stood only around at K1,330 per dollar in the local foreign exchange market in January, the rate skipped to K1,620 per dollar on 30 June with a rise of over K380 per dollar in six months. This is the reason why the Central Bank of Myanmar (CBM) has been purchasing and selling the US dollar in the auction market to reduce the fluctuation of foreign exchange rates in a short-term period and fulfil the needs of foreign exchange reserves.

The CBM purchased US$1.8 million in January this year and it then sold $6.8 million in February. Likewise, the bank also sold $12 million in April, $24 million in May and $12 million in June. At present, the dollar exchange rate hit K1,620 per dollar in the local exchange market. But the rate does not touch the rate that hit a high of K1,730 per dollar in May. In the first six months of 2021, the highest and lowest exchange rate is currently fixed around K1,327-1,345 in January, K1,335-1,465 in February, K1,420-1,550 in March, K1,550-1,610 in April, K1,585- 1,730 in May and K1,595-1,620 in June.

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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Rice export to China through Muse border checkpoint plummets

by TRADING

Myanmar’s rice export to China through the Muse border checkpoint has plummeted recently, said U Min Thein, the vice-chair of Muse Rice Wholesale Centre. The drop was due to the closure of the Man Wein checkpoint, which is the major place for the trading of rice and broken rice between Myanmar and China following the outbreak of COVID-19 positive cases. With the closing of the Man Wein land border crossing, the export stuff including rice and broken rice are being traded through China via the Kyin San Kyawt checkpoint. Earlier, Myanmar exported about 30,000 bags of rice and broken rice to China daily. But now, only about 10,000 bags have been exported. Previously, about 70 truckloads of rice and broken rice were traded daily through the Man Wein post. Now, only 24 truckloads are being traded.

The export has dropped one third. If three truckloads were used to go earlier, only one truckload will go now. Earlier, about 30,000 bags of rice and broken rice were traded through the Man Wein crossing whereas now only 10,000 bags are being traded through Kyin San Kyawt checkpoint. Currently, the price of the Muse market is 117 Yuans for a bag of broken rice, 128 Yuans for Nga Sein, 129 Yuans for Thuka and 137 Yuans for Shin Tone, according to the Muse Rice Wholesale Centre. The Man Wein land border has been closed for over one month because of the outbreak of COVID-19 and it has not been planned to reopen yet, according to Muse 105th Trade Zone, the Trade Department under the Ministry of Commerce. With the declining number of COVID-19 positive patients in the Kyalgaung area, the lockdown restrictions imposed on the Kyalgaung area were lifted starting from 4 May.

But, the observation is still going on for another three more months. As a result, the Man Wein border post has not been planned to reopen, according to the announcement of the Muse 105th Mile Trade Zone, the Trade Department on 5 May. In addition, in coordination with the Shweli Foreign Relations Department, the Man Wein crossing has not been reopened yet and it will be reopened only after having the detailed plan, according to the statement. The relevant traders will also be informed if there is an official notification from China to reopen the land border crossing. Moreover, China’s customs authorities granted rice export licences to 47 Myanmar companies on 26 February 2021, according to the Muse Rice Wholesale Centre. This year, China government has allowed more rice export licences to more companies.

So, the volume of rice export will increase this year compared to that of the previous year, according to the Muse Rice Wholesale Centre. During the first three months of the current financial year, Myanmar exported over 720,000 tonnes of rice and broken rice worth over US$275 million, according to Myanmar Rice Federation. However, Myanmar has expected to export only 2 million tonnes of rice this FY because the weather changes have affected irrigation water and consequently, summer paddy cultivation will have to be reduced, President U Ye Min Aung of the Myanmar Rice Federation (MRF) said. Myanmar generated over US$800 million from rice export in the previous FY–2019-2020 ending 30 September with an estimated volume of over 2.5 million tonnes. 

Source: The Global New Light of Myanmar

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Manufacturing exports down by $1.86 bln in nearly nine months

by MANUFACTURING

Exports of finished industrial goods drastically plummeted to US$5.14 billion in nearly nine months (1 October-25 June) of the current financial year 2020-2021, an extreme drop of $1.86 billion compared with the corresponding period of the previous FY, according to the Ministry of Commerce. As per figures provided by the ministry, the exports of finished industrial goods exceeded $7 billion during the same period in the 2019-2020FY. The IHS Markit Myanmar Manufacturing Purchasing Managers’ Index, a composite single-figure indicator of manufacturing performance, signalled the sharpest deterioration in manufacturing business conditions in the previous months. The higher material costs and unfavourable exchange rate movements contributed to a sharp increase in cost burdens, causing constraints to complete the order.

It can do more harm to the foreign investment sector if the problem is still not resolved. The PMI measures the output, new orders, performance, delays in the manufacturing process and stocks of both inputs and finished goods, according to HIS Markit’s statement. The layoff is extended and the workers are forced to return to their hometowns amid the political instability and the COVID-19 resurgences. Nevertheless, the Swedish fashion retailer H&M is gradually placing orders from Myanmar again after it paused in March. Then, more international fashion retailers such as Primark and Bestseller starts to resume new orders. Additionally, Germany will also continue its support for Myanmar garment businesses so that Myanmar women can continue their livings, Germany Embassy Yangon’s Facebook posted.

Myanmar’s manufacturing sector is largely concentrated in garment and textiles produced on the Cutting, Making, and Packing basis, and it contributes to the country’s GDP to a certain extent. Myanmar’s garment exports witnessed a decline of over 20 per cent in the past eight months (October-May) of the current financial year 2020-2021 compared with a year-ago period on the back of a slump in demand by the European Union market, the Ministry of Commerce stated. Myanmar’s garment industry has been facing challenges such as raw material supply disruption and cancellation of orders amid the pandemic.

Additionally, the surging COVID-19 cases posed impediments to the industry, a market observer shared his opinion. 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. Yet, the current political changes in the country are likely to aggravate the garment industry, traders stressed. Myanmar’s garment factories operate under the CMP system, and those engaged in this industry are striving to transform CMP into a 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. Exports of garments manufactured under the cut-make-pack (CMP) system were valued at US$4.798 billion in the last financial year2019-2020, according to data from the Ministry of Commerce. Although the sector is struggling due to the cancellation of the order from the European countries and suspension of trading by western countries during the pandemic, export values rose in the previous FY (1 October 2019-30 September 2020). More than 500 members and over 700 garment factories in Myanmar are listed on the MGMA, with an employment of over 400,000 workers. However, a third of garment industry workers are out of jobs in difficult times.

Source: The Global New Light of Myanmar

To go with story 'Pakistan-China-economy-transport, FEATURE' by Guillaume LAVALLÉE In this photograph taken on September 29, 2015, Pakistani commuters wait to travel through a newly built tunnel in northern Pakistan's Gojal Valley. A glossy highway and hundreds of lorries transporting Chinese workers by the thousands: the new Silk Road is under construction in northern Pakistan, but locals living on the border are yet to be convinced they will receive more from it than dust. AFP PHOTO / Aamir QURESHI

Total border trade value exceeds $7.4 bln

by TRADING

The total land border trade value at 18 trade camps exceeded US$7.4 billion till 18 June 2021, according to the Ministry of Commerce. From 1 October to 18 June of the 2020-21FY, the total border trade value amounted to $7.434 billion, down $806 million compared with the same period last year.

The country conducts border trade with neighbouring China through Muse, Lwejel, Kampaiti, Chinshwehaw and Kengtung, with Thailand via Tachilek, Myawady, Kawthoung, Myeik, Hteekhee, Mawtaung and Meisei land border crossings, with Bangladesh via Sittway and Maungtaw, and with India through Tamu and Reed land border checkpoints, respectively.

Muse trade camp in Myanmar-China border reached $3.75 billion, down over $616 million with the same period last year. Myanmar’s major export items are farm, animal, marine, forest, mining, CMP and other products. The country mainly imports capital goods, industrial raw materials, personal goods and CMP raw materials. 

Source: The Global New Light of Myanmar

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External trade drastically drops by $5.69 bln as of 18 June

by TRADING

Myanmar’s external trade between 1 October and 18 June in the current financial year 2020-2021 plummeted to US$21.48 billion, a sharp drop of 5.69 billion compared with the corresponding period of the FY2019-2020, according to the Ministry of Commerce. During the same period in the previous FY, the trade stood at $27 billion, according to data released by the ministry. Over the past eight and half months, Myanmar’s export was worth over $10.6 billion, which plunged from $12.8 billion registered a year-ago period. Meanwhile, the country’s import was valued $10.8 billion, showing a significant decrease of $3.5 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 limit the trading time to contain the spread of the virus. At present, the traders have transaction problems triggered by the restriction of the private banks. Furthermore, the pandemic triggered the cargo shipping crisis, a market observer shared his opinion. 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 government is trying to reduce the trade deficit by screening luxury import items and boosting exports. 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