Spikes in shipping rate pose hurdles for exporters during global pandemic

The shipping rates and the container cost are rocketing in maritime trade amidst the COVID-19 pandemic, posing the toughest hurdles for rice exporters, said U Than Oo, secretary of Bayintnaung Rice Wholesale Centre. The shipping rates and container cost dramatically surged by four to ten times higher than previous freight rates. The traders are financially not doing well with the purchase price from foreign trade partners for now. Consequently, they halt trading for a while. They cannot sell the rice at the prevailing market price, in terms of Cost, Insurance, and Freight (CIF) and agreement.

They cannot bear the exorbitant freight rates when the ships are docked at the port. The spikes in shipping cost amid the pandemic-induced container shortage scaled down the imports as well. So, the arrivals of the container ships declined. It somehow hurt the export sector. When the traders hire the ships with competitive pricing, it pushed up the freight rates. They cannot make profit with high shipping costs. This being so, trading is suspended at the present time.

Additionally, container shortage problems also hinder trading under the Free on Board (FOB) agreement. The goods are stockpiled in the warehouse as the ships rarely arrive. As a result of this, rice shipment to the southeast Asian nations and European countries came to abrupt stop. Myanmar is constantly delivering rice and broken rice only to Bangladesh, according to Bayintnaung Rice Wholesale Centre. Moreover, limiting cash withdrawal from the banks is a contributing factor to the money transaction problem in rice trade. Earlier, about 80,000 bags of rice and broken rice were daily traded at the Bayintnaung Rice Wholesale Centre, whereas only 30,000 bags are traded for now. 

Source: The Global New Light of Myanmar

unnamed (1)

Republic of the Union of Myanmar Nay Pyi Taw Council Coronavirus Disease 2019 (COVID-19) Control and Emergency Response Committee

Notification to Public
18 June 2021

  1. Myanmar has reported a rapid increase in cases of new COVID-19 variants since the end of May, with new confirmed cases every day. Disease prevention and containment measures, as well as treatment activities, have been accelerated. It is announced to the people living in Nay Pyi Taw Union Territory and those who would come from the outside of the territory, trucks and buses, to cooperate as follows:
    (a) Teams of the Nay Pyi Taw Public Health Department, administration, and security forces do a medical check-up to the people who come from the outside of Nay Pyi Taw at Nay Pyi Taw airport, train station and the city checkpoints- Nyaung Lun checkpoint, No. (5) Junction checkpoint, Si Junction checkpoint and Pantin checkpoint, in accordance with the guidelines of the Ministry of Health and Sports.
    (b) If necessary, they will be tested by RDT Test Kit, with the registration of their name, address, travel history and telephone numbers.
    (c) Those who come from stay-at-home townships will be under the 10-day quarantine at Nay Pyi Taw Municipal guest house (2), New AYA hotel and Zabuthiri hotel, and COVID-19 detection will be carried out with RDT test kits on the 3rd day and 7th day while under the quarantine.
    (d) People are educated to systematically wear face masks and stay 6 feet apart from each other.
    (e) When COVID-19 positive patients are found at checkpoints and facility quarantine centres, they will be taken to Nay Pyi Taw General Hospital (1,000 bedded) (serious cases), Nay Pyi Taw Public Hospital (300 bedded), Pubbathiri General Hospital (50 bedded) and Dekkhinathiri Township Hospital (50 bedded).
    (f) Those who have had contact with a COVID-19 positive patient will be taken to Zeyathiri Township Hospital (50 bedded) and Uttarathiri Township Hospital (50 bedded) to be quarantined.
    (g) Drivers who violate the rules will be taken action according to the existing law and freight vehicles, and passenger vehicles are prohibited from coming to Nay Pyi Taw again.
    (h) People living in and out of Nay Pyi Taw Union Territory are ordered to follow the issued guidelines in order to cut the spread of the COVID-19 disease, and actions will be taken against those who do not under the Natural Disaster Management Law.
    (i) Therefore, public are urged to follow the guidelines and restrictions by considering the COVID-19 disease containment and control measure as a national issue from the date of this notification.
    Nay Pyi Taw Council Coronavirus Disease 2019 (COVID-19) Control and Emergency Response Committee

Source: The Global New Light of Myanmar

img_54fa11a766ced

Rubber prices likely to keep climbing in next two months

According to a rubber price analysis by National Enlightenment Institute (NEI), the prices of rubber rose this month and are likely to stay high in the next two months, July and August, according to a rubber price analysis by National Enlightenment Institute (NEI). At present, Myanmar natural rubber fetched K870 per pound (0.45 kilograms) while the price of the ribbed smoked sheet (RSS) hit K880 per pound. According to last year›s Myanmar rubber analysis data, the price of rubber has risen as rubber production has declined in the off-season in June, July and August. That is why the rubber prices are likely to rise in this year’s rubber off-season, NEI reviewed. The prevailing price of natural rubber fetched K710 per pound while the RSS price hit K720 per pound on 1 January. Thus, there were not many fluctuations in the first five months of this year (JanuaryMay). However, the effects of the political upheavals in February led to a halt to rubber trading and a more volatile condition of rubber price.

Besides, the farmers and entrepreneurs face difficulties in terms of cash flow because of the suspension of banking services. The rubber latex production has dropped because it is time for rubber leaves to fall off in Mon state from the third week of February to the end of March. However, rubber prices slightly rose as of end-May thanks to the strong demand for rubber from the Thailand border and China. On 10 May, the cost of natural rubber hit K920 per pound while RCC touched K930 per pound. In the last five months of 2020, the rubber price ranged from K600-K740 per pound. Thus, this rubber season could earn the farmers a good price. This year’s rise in rubber prices can be attributed to the foreign demand for the rubber to manufacture the rubber gloves to prevent from being infected with COVID-19.

Mon State has the most extensive acreage of rubber in Myanmar, with the production of over 240 million pounds of rubber, according to the 2020 official statistics of Mon State Agriculture Department. Rubber is primarily cultivated in Mon and Kayin states and Taninthayi, Bago, and Yangon regions in Myanmar. As per 2018-2019 rubber seasons, data, there are over 1.628 million acres of rubber plantations in Myanmar. Mon State accounts for 497,153 acres, followed by Taninthayi Region 348,344 acres and Kayin State with 270,760 acres, according to the MRPPA. Further, about 300,000 tonnes of rubber are produced annually across the country. Seventy per cent of rubber made in Myanmar goes to China. In addition to China, the country also shipped rubber to Singapore, Indonesia, Malaysia, Viet Nam, the Republic of Korea, India, Japan, and other countries. Myanmar annually exports over 200,000 tonnes of raw rubber to foreign countries generating over $200 million.

Source: The Global New Light of Myanmar

green-mung-beans-1716959

Green gram prices rocket on high foreign demand

The prices of the green gram are rising on the back of the high foreign demand, traders said. The prices (Shwe Wah variety) rocketed up to K105,000- 127,000 per three-basket bag. At present, the regular inflow of green grams is seen in the domestic market. India and China steadily demand the green gram. Additionally, some local traders are purchasing the green grams to export them to Thailand and Viet Nam as well.

China accounts for 60 per cent of Myanmar’s green gram exports. In addition, countries in the European Union also purchase green grams from Myanmar. The export volume of green grams to India is lower compared to other countries. China prefers green grams (Shwe Wah variety,) said an official from the Commerce Ministry. China makes value-added products from green grams and sends them to foreign markets. Moreover, it produces bean by-products as feedstuffs. The country has generated $266.49 million revenue from green gram exports in the first half (Oct-Mar) of the current financial year 2020-2021.

Myanmar’s green gram exports have registered at over 330,000 tonnes in the 2015-2016 financial year, over 400,000 tonnes in the 2016-2017FY, and over 350,000 tonnes in the 2017-2018FY and over 300,000 in the 2018-2019FY. Green grams are mostly exported to China through the border trade channels. Of the total pulses’ exports, green grams accounted for more than 26 per cent of the exports in the previous years. As per green gram plantation data, there are over 300,000 acres of plantations in the country. Green grams are primarily grown in Sagaing, Magway, Mandalay, Yangon, Bago, and Ayeyawady regions and Mon and Kayin states.

Source: The Global New Light of Myanmar

Republic of the Union of Myanmar State Administration Council Law Amending the 2020 Union Tax Law State Administration Council Law No 20/2021

8th Waxing of Nayon 1383 ME
17 June 2021

The State Administration Council hereby enacted the law in accord with Section 419 of the Constitution of the Republic of the Union of Myanmar with the aim of resurging delayed businesses and investments based on the Coronavirus Disease 2019 (COVID-19).
The law shall be named the Law Amending the 2020 Union Tax Law.
The law shall come into effect from 1 July 2021 to 30 September.
The table mentioned in Sub-Section (a) of Section 25 of the 2020 Union Tax Law shall be substituted as follow:


I signed it in accord with Section 419 of the Constitution-


Sd/Min Aung Hlaing
Senior General
Chairman
State Administration Council

Source: The Global New Light of Myanmar

Maersk Line Myanmar (Sealand Maersk) to launch three new container vessels to meet maritime trade needs

Maersk Line Myanmar (Sealand Maersk) will launch three new container vessels to meet maritime trade needs. Maersk Line Myanmar will launch new vessels, the Maersk Norberg, Maersk Narvik and Maersk Nesna. Of the three ships, the Maersk Norberg will dock at MITT and MIP ports, and the Launching Ceremony was held on June 10, 2021 at MIP Port. The three new ships will have a capacity of 1,750 TEU 2100 metric tons (9.5 meters). It was built specifically for the Myanmar market. With the expansion of these new container vessels, there will be enough space & equipment for exports and shipments will not have to wait for a booking.

According to the Myanmar Ports Authority, 35 container vessels are scheduled to enter the country in June to increase exports during the open season and increase imports to meet domestic demand. Last May, only 24 container vessels were scheduled to arrive, but as of May 31, a total of 37 vessels have been operated, according to the Myanmar Port Authority. International trade; Export Coordinating meetings were held to facilitate the import of goods and the flow of goods, to increase the access of container vessels and to address the need for containers for exports. At the meeting, the Chief Executive Officer; Myanma Port Authority has reported a drop in container arrivals at Yangon Port since the COVID-19 incident. The situation of increasing demand for container for export was discussed.

He also briefed on the current situation of daily port operations at various container ports. The shipping lines are also currently suspending / suspending some vessels. In May this year, a total of 24 container vessels are scheduled to be operated by shipping lines. Depending on the market demand, special flights will be provided. He explained the conditions for providing containers and refrigerators for exporters. The discovery of a new waterway on the Yangon River has allowed international vessels to enter and leave the port of Thilawa, which has been allowed to increase the restriction on the tide. According to a statement from the Myanmar Ports Authority, 152 vessels over 30,000 tonnes entered Rangoon ports and Thilawa ports within five months of the new tide restrictions being extended due to the discovery of a new waterway on the Yangon River.

Source: Daily Eleven

If the sale or exchange value of one or more assets per year does not exceed 100 lakh kyats, income tax is not required even if the capital is profitable

According to the Internal Revenue Department, sale or exchange value of one or more assets does not exceed 100 lakh kyats, there is no need to pay income tax even if the capital is profitable. If one want to clarify tax matters concerning buying and selling of cars, it is needed to carried out setting vehicle standards, submission of declaration and tax payment procedures. In case of setting vehicle standards, registration of domestic vehicles and change of owner’s name in connection with tax assessment, it is needed to contact the relevant township Revenue Department offices in the township where the taxpayer resides. In the case of importing vehicles from abroad, it is also needed to contact the Office of the Income Tax Collection for the import of motor vehicles in Yangon, Mandalay and Nay Pyi Taw.

If the taxpayers want to carry out buying/selling of vehicles; and changing the names of owners, they can submit the income declaration to the relevant township tax office where they live and submit the source of income for the purchase. If the source of income is not presented, the income tax will be paid in accordance with the tax rates in Section 25 of the Union Tax Law of 2020. In the case of selling vehicles, they have to submit the income declaration to the relevant township tax office where they live within 30 days from the date of transfer of the property and estimate the tax. According to the 2020 Union Tax Law, income tax is levied at a rate of 10% on the value of the original purchase price and the additional costs incurred in the transfer of the property. 

In selling of one or more assets per year, Income tax is not needed to be paid even if the total value of the property to be exchanged or transferred is not more than 100 lakh kyats. According to the original estimate, the Union tax collection in the 2020-2021 fiscal year is expected to reach over 8615.777 billion kyats. If we look at the annual tax collection of the Union, in the 2011-2012 financial year it was 1691429.766 million kyats, in the 2012-2013 financial year it was 3373296.761 million kyats, in the 2013-2014 financial year it was 4458776.335 million kyats. 6517979.368 million in the 2014-2015 financial year; 6314733.657 million in the 2015-2016 financial year; 7122430.228 million in the 2016-2017 financial year; 7423724.984 million in the 2017-2018 financial year; In the six months from April to September 2018, 3424206.832 million kyats; In the 2018-2019 financial year, it received 8360303.568 million kyats.

Source: Daily Eleven

Real estate sales / purchases must be assessed within one year after the current valuation; if not, it will be re-assessed according to the update valuation standards

The Internal Revenue Department (IRD) has announced that the sale and purchase of real estate must be assessed within one year after the current valuation, and if it is assessed for more than one year, it will be re-assessed according to the current valuation standards. It is needed to clarified current valuation, submission of declaration, tax payment procedures in purchasing and constructing, and selling of real estate and buildings.

If the purchasing, constructing, and selling property is located within the townships in Yangon and Mandalay Regions, the current valuation can be proceeded by contacting relevant Regional Valuation Committee, and if the place is located outside Yangon and Mandalay Development Zones, one should contact relevant township valuation committee to get the current valuation. Tax assessments must be made within one year of the valuation period. Failure to submit the tax assessment within one year of the valuation period will automatically cancel the assessment, and if the tax assessment period is more than one year, it will be revalued under current valuation standards.

For those taxpayers who purchase, construct and sell real estate and building, taxes related to purchase/construct/sell can be paid by submitting income statement to the relevant township tax office where the property is located. If it isn’t able to submit the income statement, tax will be paid in accordance with the tax rates in Section 25 of the Union Tax Law of 2020 with the stamp duty on the fixed value. If one want to sell the land or building, that person must submit the income tax return to the relevant township tax office where the property is located or within 30 days from the date of transfer of the property and estimate the tax. According to the 2020 Union Tax Law, income tax is levied at 10 percent of the proceeds, plus the original purchase price and the costs incurred in transferring the property over a specified period of time.

Source: Daily Eleven

Imports of petroleum products exceed $1.3 bln in H1

Myanmar imported more than US$1.3 billion worth petroleum products during the first half (Oct-Mar) of the current financial year 2020-2021, as per the Myanmar Customs Department. The figures indicated a sharp drop of over $660 million compared to the corresponding period of last year. In the current fiscal year, Myanmar imported over 1.6 million tonnes (worth over $750 million) of diesel and over 1 million tonnes (worthover $540 million) of petrol, as per data of the Commerce Ministry. Normally, a monthly oil import is estimated at $400 million, yet the oil importers are facing banking restrictions for maritime trade. Nevertheless, oil importers via land border can use informal payment Hundi system instead, said an importer. At present, the domestic fuel oil price has now risen above 30 per cent per litre in three months, as the heightened coronavirus restriction and possible lockdown in Asia sparked oil demand concerns, coupled with strong dollar exchange rate.

The fuel oil was pegged at around at 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 16 June, it rallied to the highest of K1005 for Octane 92, K1,090 for Octane 95, K1,005 for diesel 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. The soaring demand drives up the oil prices rally higher, with WTI climbing above $72.46 per barrel in mid-June. Additionally, foreign exchange rate also affects the petroleum price. Kyat is depreciating in the local forex market starting from April, with above K1,640 per dollar. In mid-February, a dollar was worth only K1,430. Normally, Myanmar imports fuel oil primarily from Singapore, with monthly volumes touching 200,000 tonnes for gasoline and 400,000 tonnes for diesel.

There are about 2,000 fuel stations and over 50 oil importer companies in Myanmar, Myanmar Petroleum Trade Association stated. In early June 2021, the Ministry of Electricity and Energy notified the private sector of keeping the oil storage above 35 per cent of the storage capacity of the tanks to avoid the possible discrepancy between demand and supply. Last year, the domestic oil prices declined to start 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 K290-330 per litre for Octane 92, K430-455 for Octane 95, K435-465 for diesel, and K445-475 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

See-trade.-Poto-Phoe-Khwar-copy

Maritime trade drops by $4.77 bln as of 4 June

The value of Myanmar’s maritime trade over the past eight months (1 Oct-4 June) of the current financial year 2020-2021 sank to US$13.275 billion, a drastic drop of over $4.77 billion as against the year-ago period, according to the Ministry of Commerce. While maritime exports were valued at $4.45 billion, imports were registered at $7.82 billion. Compared to the same period in the 2019-2020 fiscal year, imports fell by $3.49 billion, while exports reported a decrease of $1.28 billion. Meanwhile, the value of trade through the border this FY was estimated at $7.18 billion, a decrease of $842.5 million as against a year-ago period.

Myanmar witnessed a slump in exports and imports triggered by the coronavirus pandemic. Both sea trade and border trade dropped amid the coronavirus impacts and the political changes. The neighbouring countries tightened the border security and limited the trading time to contain the spread of the virus. For maritime trade, disruption in the logistic sector, the suspension of some ocean liners and the pandemic-induced container shortage somehow scaled-down the maritime trade. Additionally, the lack of money in circulation due to the closure of private banks decreases economic efficiency, an exporter stressed.

Over the past eight months, the country’s total external trade touched a low of $20.46 billion, which plunged from $26.08 billion recorded in a year-ago period. Myanmar’s sea trade generated $26 billion out of an overall trade value of $36 billion in the last FY2019-2020, the Ministry of Commerce’s statistics indicated. Myanmar exports agricultural products, fishery products, minerals, livestock, forest products, finished industrial goods, and other products. On the other hand, it imports capital goods, consumer goods, and raw industrial materials.  The country currently has nine ports involved in sea trade. Yangon Port is the main gateway for Myanmar’s maritime trade. It includes the Yangon inner terminals and the outer Thilawa Port. 

Source: The Global New Light of Myanmar