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Total border trade value down by $86 mln this FY

MYANMAR’S trade with foreign countries through land borders reached over US$4.84 billion as of 5 March in the current financial year (FY) 2020-2021, which started on 1 October, according to the figures released by the Ministry of Commerce. From 1 October to 5 March of 2020-2021FY, the total border trade value amounted to $4.836 billion, a decrease of $86 million compared with that of the same period last FY when it amounted to $4.92 billion.

The country’s export via land borders amounted to $3.12 billion while its import shared $1.72 billion during the period. Muse topped the list of border checkpoints with the highest trade value of $2.28 billion, followed by Myawady with $549 million. The country conducts border trade with neighbouring China through Muse, Lweje, Kampaiti, Chinshwehaw and Kengtung with Thailand via Tachilek, Myawady, Kawthoung, Myeik, Hteekhee, Mawtaung and Maese crossings, with Bangladesh via Sittway and Maungtaw and with India through Tamu and Reed border posts, respectively.

From 1 October 2020 to 5 March of this FY, the country’s foreign trade totalled over $4.84 billion, while its sea trade valued $8.71 billion, according to the ministry. Myanmar mainly exports agricultural products, animal products, marine products, minerals, forest products, manufactured goods and others while capital goods, intermediate goods and consumer goods are imported to the country.

Source: The Global New Light of Myanmar

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Watermelon growers flood markets with excess supply, traders warned of market failure

ABOUT 1,300 trucks of watermelon are now stranded in the Muse 105th-mile zone, and 700 trucks pass the cross-border route between Myanmar and China. Consequently, watermelon supply exceeds the demand, leading to possible market failure, Khwar Nyo Fruit Depot warns. About 250 trucks of watermelon daily enter the Kyinsankyawt checkpoint. In comparison, about 100 trucks loaded muskmelon are flowing into Pan Hseng and Wan Ding every day. There is no market equilibrium. Furthermore, a transport delay affects 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. China shut down the post on 25 and 28 February without a specific reason, resulting in 1,300 watermelon trucks stranded in the 105th-mile zone. A truckload of watermelon (855 variety) fetches 45,000-65,000 Yuan at present. 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 plans to expand its market to Hong Kong SAR, UAE, and Qatar. 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. During the previous financial year, the growers and the traders suffered the loss due to the price instability and transportation difficulties triggered by the COVID-19. Watermelon and muskmelon will be harvested up to Mayend across the country, except Kayah and Chin states. 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

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Republic of the Union of Myanmar Working Committee to address impact of Coronavirus Disease 2019 (COVID-19) on the Country’s Economy

Press Release 1/2021
17 March 2021

  1. The Working Committee to address the impact of Coronavirus Disease 2019 (COVID-19) on the Country’s Economy disbursed loans from the COVID-19 Fund with 1 per cent interest rate per year to businesses which are hit by the COVID-19 on 9 April 2020, and the loans which were taken out earliest will turn a year soon and the time comes to be paid off to the committee.
  2. To help the domestic businesses continue to run with the smooth financial flow, the State Administration Council has instructed the committee to extend the end of the loans period to six months from the set date.
  3. Hence, it is hereby announced to those who took out the loans from the COVID-19 Fund that the end of the loans period has been extended to six months from the date for returning the loan.

Source: The Global New Light of Myanmar

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Manufacturing exports fall by $1.64 bln as of 5 March

EXPORTS of finished industrial goods drastically fell to US$3 billion between 1 October and 5 March in the current financial year 2020-2021, a severe drop of $1.64 billion compared with the corresponding period of the previous FY, according to the Ministry of Commerce. As per the ministry figures, the exports of finished industrial goods totaled $4.68 billion during the same period in the 2019-2020FY. Myanmar’s manufacturing sector is largely concentrated in garment and textiles produced on the Cutting, Making, and Packing basis, contributing to the country’s GDP to a certain extent. Myanmar’s garment export dropped by over 25 per cent as of the first quarter of the current FY 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 orders’ cancellation amid the pandemic. Additionally, the current political conditions would drag down the sector, a market observer shared his opinion. At present, the CMP garment factories temporarily shut down and left thousands of workers unemployed. Myanmar mainly exports CMP garments to markets in Japan and Europe and 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 country’s current political changes 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 the 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. According to data from the Ministry of Commerce, exports of garments manufactured under the cut-make-pack (CMP) system were valued at US$4.798 billion in the last financial year 2019- 2020. Although the sector is struggling due to the cancellation of order from the European countries and suspension of Western countries’ trade during the pandemic, export values rose in the previous FY (1 October 2019-30 September 2020). 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, according to the Commerce Ministry. Since an outbreak like COVID-19 might happen in the future, it is necessary to prepare for a sufficient raw materials supply. That being so, the public and private sectors will cooperate in setting up the supply chain on our own sources, including weaving, knitting, dyeing, and sewing factories. The MGMA has more than 500 members and garment factories in Myanmar, employing more than 400,000 workers. Investors prefer to invest in countries with inexpensive labour, such as Myanmar.

Source: The Global New Light of Myanmar

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Agro-exports remain to rise even private banks shut down

The agricultural exports unexpectedly surge over the past five months even though traders face transaction problems due to the closure of private banks. The agricultural exports have topped US$2.49 billion as of 5 March 2021 in the current financial year since 1 October 2020. The figures reflect a significant rise of $765.74 million this FY. The agro-exports soared from $1.72 billion in the corresponding period of the 2019-2020 FY. According to the trade figures released by the Ministry of Commerce.

Myanmar’s agricultural exports rose regardless of the coronavirus’s impact on foreign demand for other export groups and political instability. Private banks’ closure forced the traders to turn to the operators running ‘hundi’, an informal money transfer system, to make transactions in the border trade. At present, some ocean liners suspended cargo transport from Myanmar in recent days. The cargo transport will double or triple if we conduct the trade with small ships. It could harm the export sector somehow, according to Myanmar Mercantile Marine Development Association.

In the exports sector, the agriculture industry performed the best, accounting for over 22 per cent of overall exports. The agricultural sector’s top export items are rice and broken rice, pulses and beans, and maize. Fruits and vegetables, sesame, dried tea leaves, sugar, and other agro-products are also shipped to other countries. Myanmar agro products are primarily exported to China, Singapore, Malaysia, the Philippines, Bangladesh, India, Indonesia, and Sri Lanka. Sometimes, the export market remains uncertain due to unsteady global demand.

The country requires specific export plans for each agro product, as they are currently exported to external markets based upon supply and demand. Contract farming systems, regional and state agriculture departments, exporters, traders, and some grower groups are required to meet production targets, said an official from the Agriculture Department. The Commerce Ministry is working to help farmers deal with challenges such as high input costs, procurement of pedigree seeds, high cultivation costs, and unpredictable weather conditions. 

Source: The Global New Light of Myanmar

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Sino-Myanmar border trade up despite political changes: MOC reports

Sino-Myanmar border trade has registered a rise of US$227.37 million between 1 October and 5 March in the current financial year 2020-2021 amid the political changes, according to the Ministry of Commerce. As of 5 March 2021, Myanmar’s exports to China through the land border were valued at $1.9 billion, while imports are worth $897.8 million. The value of Sino-Myanmar border trade via all five border posts touched over $2.89 billion in the current FY, which significantly soared from over $2.66 billion recorded in the year-ago period, indicated the Ministry of Commerce’s data. The increase in trade is attributed to the extending trading hours at Muse-Man Wein and Kyinsankyawt checkpoints. Furthermore, Pan Hseng (Kyukok) and Wan Ding border posts also gave the green light to fruit trucks under the driver substitution system.

This FY, border trade values totalled $2.28 billion through the Muse border, $123.3 million via Lweje, $274.936 million via Chinshwehaw, $204.8 million via Kampaiti, and over $5 million via Kengtung. The Commerce Ministry’s data showed a rise in trade value through all those border posts. Muse is an essential border in Myanmar and handles an enormous volume of trade. But at times, it has experienced a sharp drop in trade on account of China clamping down on illegal goods, resulting in a halt in the trade of agricultural products. Moreover, the COVID-19 impacts slow the trade last year. In a bid to contain the spread of coronavirus on the border, China banned border crossing. Shortly after that, about 50 drivers are allowed to pass the crossing under the driver substitution system. Those drivers are, however, tested every three days.

As a result of this, China included them in the vaccination programme, covering more than 40 Myanmar truck drivers, vice-chair of Muse rice wholesale centre said. In a bid to lower trade barriers and offer relief to Myanmar traders through the border trade channel, the Ministry of Commerce, the related departments and the Union of Myanmar Federation of Chambers of Commerce and Industry have been negotiating with China counterparts. The two countries are making efforts to set up more border economic cooperation zones and promote border trade. Myanmar’s MOC is trying to boost exports of rice, broken rice, agro-products, fruits and fisheries to China through negotiations. Myanmar exports agricultural products, including rice, beans and corns, and fishery products such as crab, prawn, and others. Furthermore, Myanmar’s natural gas export to China is also conducted through the Muse-Ruili border. The raw CMP materials, electrical appliance and consumer goods are imported into the country.

Source: The Global New Light of Myanmar

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Myanmar-Thailand border trade down by $452 mln as of 5 March

The value of Myanmar’s bilateral trade with the neighbouring country Thailand through the land border has registered a decrease of US$452 million between 1 October and 5 March of the current financial year 2020-2021 as against a year-ago period, the Ministry of Commerce-issued statistics indicated. The ministry reported exports surpassed imports in trade with Thailand this year, with exports reaching over $985.6 million and imports valued at over $454 million, totalling $1.4 billion. During the corresponding period of the past FY2019-2020, Myanmar-Thailand border trade touched a high of $1.89 billion. Following some traders tested positive for COVID-19, some border posts were temporarily halted last year.

At present, fruits and agricultural products such as cucumber, mango, tomato and vegetable, fishery products, building materials and other pharmaceutical-related goods and equipment can be traded. Myanmar-Thailand friendship bridge No. 2 is also open for trading. The halt in trading undoubtedly harmed the traders and truck drivers from both sides, said a trader from Myawady. During the last budget year, Myanmar has increasingly exported corns to Thailand through the Myawady border. Myanmar’s corn exports to Thailand significantly soared to over 1.2 million tonnes through border posts between Myanmar and Thailand during October and May period in the FY2019-2020, an official of the Ministry of Commerce said.

At present, Myanmar exports the corn to Thailand through Myawady and Tachilek land borders. About 5,000-6,000 tonnes of corn are daily sent to Thailand through Myawady, while the Tachilek border does not regularly export. Myanmar is allowed for corn export between 1 February and 31 August with Form-D, under zero tariff. Thailand imposed 73 per cent of tax on corn import to protect their growers’ rights if the corns are imported during the corn season of Thailand as per the World Trade Organization notification regarding corn import of Thailand, said a corn exporter.

Myanmar intends to reach an export target of one million tonnes of corns to Thailand this year, said U Min Khaing, chair of the Myanmar Corn Industrial Association. Additionally, exports of natural gas from the Taninthayi Region has contributed to the enormous increase in border trade with Thailand in the previous years. This year, gas exports via the Hteekhee border drastically fell. There are seven border posts between Myanmar and Thailand, Tachilek, Myawady, Kawthoung, Htikhee, Myeik, Mawtaung and Maese.

Except for Tachilek and Myawady, the remaining border posts showed a decrease in the trade this FY. The value of border trade stood at $159.27 million via Tachilek, $549.48 million via Myawady, $159.8 million via Kawthoung, $62.565 million via Myeik, $501.97 million via Hteekhee and $6.9 million via Mawtaung. Maese border post has not witnessed any trade yet. Myanmar primarily exports 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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Border trade up by over $19 mln

THE total border trade value exceeded US$4.16 billion in the first five months of the current financial year, up over $19 million compared with the same period last year, according to the Ministry of Commerce. Till 19 February of 2020-21FY, the total border trade amounted to $4.16 billion, up to $19 million compared with the last year’s figure of $4.14 billion.

The entire border trade value included $2.88 billion in export and $1.28 billion in import. The trade volume at Muse border trade on the China-Myanmar border exceeded $2.18 billion, down over $208 million compared with the same period last year. Myanmar mainly exports agricultural products, animal products, marine products, minerals, forest products, manufacturing goods and others to foreign trade partner countries.

In contrast, capital goods, intermediate goods and consumer goods are imported into the country. Myanmar has opened 18 border trade camps. The country conducts border trade with neighbouring China through Muse,
Lweje, Kampaiti Chinshwehaw and Kengtung, with Thailand via Tachilek, Myawady, Kawthoung, Myeik, Hteekhee, Mawtaung and Maese gates, with Bangladesh via Sittwe and Maungtaw, and with India through Tamu and
Reed border crossings respectively.

Source: The Global New Light of Myanmar

Construction of crop dehydration factory completed by 65% in ChaungU Township

The construction of crop dehydration factory is 65 per cent finished in ChaungU Township, Sagaing Region and about 2,000 tonnes of crops are daily dried on a trial run at present. The factory is started to be developed on 28 December 2018, under the endorsement of the Sagaing Region Investment Committee, said managing director U Aung Naing Oo of Aung Nagani Co., Ltd. The dehydration factory is aimed at fetching a good price in the export market. It will export quality vegetable to foreign countries.

About 30 people will be employed upon the completion of the factory. The crop processing was earlier delayed due to the lack of dehydration factory. They faced market loss owing to the inferior quality then. The dehydration factory is set up to enhance the socio-economy of the farmers and explore more potential markets. Sagaing Region Investment Committee endorsed Aung Nagani Co., Ltd to execute crops drying, categorizing and rice milling and processing activities on 28 December 2018, bringing in the capital of K726.44 million (including US$ 0.113 million).

The factory is located at No. 2038, Kywalkyayoe yard, Ngaya n village-tract, ChaungU Township, Sagaing Region, according to the Directorate of Investment and Company Administration. 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.

Source: The Global New Light of Myanmar

Greenback-Kyat exchange rate drops over K20 per dollar in over 2 weeks

The exchange rate of the US dollar has been on the decline against Myanmar Kyat in the domestic currency market, a dropping by over K20 in over two weeks, according to the Central Bank of Myanmar. The rate went down from K1,447 per dollar on 22 February to K1,423 per dollar on 10 March in the domestic exchange market.

Similarly, the domestic gold price is also dropping in the market. The price per tical (0.578 ounces, or 0.016 kilograms) of gold was around K1,410.000 on 3 February but had dropped to K1,325,000 by 10 March. In the domestic market in 2021, the highest and lowest exchange rate is currently fixed around K1,327-1,345 in January and K1,330-1,447 in February.

This year, 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 the last six months in 2019, the rates were fixed 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 a record high of K1,650 in the local exchange market. 

Source: The Global New Light of Myanmar