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Myanmar rice exports to China strong as Yuan gains

by TRADING

With the Chinese Yuan appreciating, Myanmar’s exports of rice
and broken rice are so strong that the exporters are receiving
handsome benefits, said U Min Thein, vice-chair of Muse Rice Wholesale Centre. At present, the Chinese Yuan is gaining, and a Yuan is over K200. As a result of this, the exporters are financially doing well. The stronger the Chinese Yuan, the better the exporters earn. There is good potential for rice and broken rice among the goods exported to China. The rice prices stand at 129 Yuan per bag for broken rice, 133 Yuan for Ngasein rice variety, 135 Yuan for Thuka variety and 142 Yuan for Htonepu variety, Muse rice
depot stated. Last 26 February, China gave green lights to some Myanmar export companies to deliver the rice to China through the Muse land border.

It is also said that the authorized companies for rice export to China have increased this year as against last year. Myanmar traders have
started shipping rice to China under new permits through the Muse border.
Nevertheless, the private banks’ closure disrupted the transaction problem in the rice trade, he elaborated. Myanmar shipped more than 720,000 tonnes of rice and broken rice to foreign countries between 1 October and 15 January of the current financial year, earning over US$275 million, Myanmar Rice Federation stated. The country sent over 308,000 tons to neighbouring countries via border trade, and maritime trade saw over 418,000 tonnes. Myanmar has exported rice to 31 foreign markets so far. China is the main buyer of Myanmar rice with over 340,000 tonnes, followed by the Philippines (36,000 tonnes) and Poland (14,000 tonnes).

Meanwhile, Myanmar sent broken rice mostly to China (over 210,000 tonnes), followed by Belgium (46,000 tonnes) and Thailand (over 6,300 tonnes). Broken rice was placed in 16 foreign markets. Myanmar set the rice export target at only 2 million tonnes in the current FY as summer paddy growing acreage drops, said the Chair of Myanmar Rice Federation (MRF). Weather changes affected irrigation water resource availability in agriculture. Consequently, the export figures showed a drop of 300,000 tonnes of rice in exports this year. Myanmar generated over $800 million from rice exports in the previous FY2019-2020 ended 30 September, with an estimated volume of over 2.5 million tonnes.

Source: The Global New Light of Myanmar

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Export of cattle, animal products dives by $35.84 mln this FY

by TRADING

MYANMAR’S export of animal products between 1 October and 19 February in the current financial year 2020-2021 touched a low of US$15.857 million, a sharp drop of $35.8 million compared with the corresponding period of the 2019-2020 FY since China suspended livestock trading. In the previous FY, animal products export has registered at $51.69 million. The private sector solely drives animal products export. About 10,000 heads of cattle, owned by 150 companies, are now stranded in the Muse border as China stopped purchasing cattle. The labour wages and feedstuff cost burden
them. It costs K400,000-600,000 to take care of 100 heads of cattle every day.

Some traders brought the cattle from Muse back to their home owing to the burden of high feedstuff cost and labour wages. Some intentionally stated that they would return to the originally-designated place but conduct illegal trade in border areas. 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. Therefore, the officials concerned from the two countries are negotiating the matter.

Earlier, 1,500-2,000 heads of cattle were daily traded through the Muse border. Chinese New Year holidays, preventive measures for the COVID-19, and other reasons contribute to the cattle trade suspension. Additionally, Myanmar’s live cattle export heavily relies on the China market due to a
reasonable 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 actions if they
do not sell the cattle during the three-month period.

Next, the officials from the Livestock Breeding and Veterinary Department (LBVD) under the Ministry of Agriculture, Livestock and Irrigation signed with China’s counterparts regarding cattle surveillance and health projects for live cattle export on 18 January 2021, intending to enhance livestock trading and ensure regular border trade through legitimate channel. The LBVD has been implementing the establishment of a foot-and-mouth-disease free zone, control zone and vaccination areas since 14 July 2020 to export live cattle to China through the land border.

Live cattle export was allowed in late 2017 to eradicate illegal exports, creating more opportunities for breeders and promoting their interests.
The country exports cattle above five years old, including
vaccination certificates, health certificates, and farming registration certificates. According to the 2018 cattle census, there are 11.5 million heads of cattle in the country. The authorities have issued cattle export licences to more than 300 companies in the Magway region. There are around 5,000 companies holding cattle export licences across the country. Myanmar can yearly export around 500,000 heads of cattle beyond domestic consumption, the association stated.

Source: The Global New Light of Myanmar

Domestic gold prices fall by over K100,000 in half month

by ECONOMY

ACCORDING to the domestic gold market, the gold market prices in Myanmar dropped by over K100,000 in half a month. Although pure gold reached the highest price of over K1,4000,000 per tical on 17 February, the price dropped to K1,302,000 per tical after 15 days on 4 March. Recent days saw the gold price unstable in the domestic market. That is the reason why the Yangon gold market halted on 5 February. But, the market reopened on 10 February. Consequently, Yangon Region Gold Entrepreneurs Association called an emergency meeting on 4 February before the gold market started. Then, the association made four decisions.

They are to use the cash down payment system and encourage people who are trading with fear and trading with restraint. Similarly, the international gold price is also on the decline. The gold price was only around US$1,788 per ounce on 17 February but had dropped to $1,713 on 4 March 2021, a decline of $75 in 15 days. In January 2021, the domestic gold fetched the highest price of K1,336,000 per tical on 6 January. It reached the lowest price of K1,316,000 per tical on 28 January. The lowest level of K1,340,000 came from 2 February, and the highest level of K1,410,000 (3 February), the gold traders said.

The local gold price reached the lowest K1,310,500 (2 September) and the highest level of K1,314,000 (1 September). In October, the rate ranged between K1,307,800 (30 October) and K1,316,500 (21 October). The rate fluctuated between the highest of K1,312,000 (16 November) and the lowest of K1,278,000 (28 November). In December, the pure yellow metal priced moved in the range of Ks 1,275,000 (1 December) and K1,333,000 (28 December). With the global gold prices on the uptick, the domestic price hit fresh highs in 2019, reaching K1,000,000 per tical between 17 January and 21 February, crossing K1,100,000 (22 June to 5 August), climbing to K1,200,000 (7 August-4 September), and then reaching a fresh peak of K1,300,000 on 5 September, according to the gold traders.

Source: The Global New Light of Myanmar

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Myanmar’s manufacturing sector hit record high in February due to political instability

by MANUFACTURING

According to the Index Purchasing Manager of Nikkei Myanmar Manufacturing PMI (Manufacturing Purchasing Managers’ Index for February 2021), Myanmar’s manufacturing sector hit a record high with production and new orders. Due to the political events that took place on 1 February, political instability in Myanmar following the closure of factories and the manufacturing sector recorded a rapid decline. Due to the low demand, the number of new orders, purchases, imports and stocks set new records. According to the state of emergency declared on 1 February, workers return to their homes and transportation conditions became more difficult. Although the outlook for the future is positive, the optimism level is from the highest in the 11th month of January to fell moderate.

When it comes to prices, commodity prices from the burden of expenses rise sharply due to foreign exchange speculation. Myanmar’s PMI for February is 27.7 and manufacturing conditions signal a sharp decline since it fell from the January index of 47.8. Decline of 20.1 within one month is the strongest from the beginning of the survey five years ago to the present day. Due to the state of emergency declared on 1 February, factories and demand were shut down. In the calculation of the main index production, up to 65% of all indicators for new orders and imports hit a low record in February while 20% recorded employment rate was the third-largest drop in record number.

The 15% supply delivery period continued to grow (as supply chain pressures were always associated with increasing demand), allowing the PMI to depreciate as a whole. Companies reported lower orders received this month, while others reported customer closures. As a result, the rate of decline was the highest in the five-year period of the survey, higher than the highest decline last October. About 70 percent of companies reported a drop in production this month as factories shut down. As a result of declining productivity, companies cut staff in the last month. Respondents also reported that the workers had returned to their homes. Overall, there is a fair amount of surplus work due to weak demand and a shortage of manpower.

Purchases of imports fell sharply due to a record drop in new employment. Market research has pushed up commodity prices due to scarcity of raw materials and worsening exchange rates. Companies have tried to shift the burden of costs by slightly raising their selling prices. Procurement conditions declined in the worst case scenario due to shortages of raw materials and blockades of shipments. Over the next 12 months, the level of productivity optimism fell to a five-month low. Shreeya Patel, an economist at IHS Markit who conducted the survey, said the declaration of a state of emergency on February 1 only exacerbated the challenges facing Myanmar’s manufacturing sector. The survey is based on original data collected from industry by HIS Markit and sponsored by Japan-based Nikkei Media Group.

Source: Daily Eleven

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Investments from Hong Kong SAR top $87 mln in 4 months (Oct-Jan)

by INVESTMENT

Hong Kong SAR, the third-largest investor in Myanmar, pumped in US$87 million with five projects as of January-end, according to the Directorate of Investment and Company Administration (DICA). Hong Kong puts investment in real estate development, electricity, and garment businesses. Singapore is the top source of foreign direct investments into Myanmar in the first four months of the current financial year 2020-2021, bringing in $378 million under 12 projects.

China stood as the second-largest investors this FY, with an estimated capital of $139.354 million from 10 enterprises. Those enterprises listed from Thailand, India, Japan, Malaysia, the Republic of Korea, the UK, Viet Nam, Marshall Island and China (Taipei) also made investments this year. Myanmar has attracted foreign direct investments of more than US$672.59 million in Oct-Jan of the current FY. They include expanding capital by existing enterprises and acquisitions in the Special Economic Zones, DICA’s statistics indicated. MIC intends to reach an FDI target of $5.8 billion for the current FY2020-2021.

Myanmar is trying to attract foreign investment by providing tax relief, tax incentives, investment opportunities, and fast processing proposals. However, the Ministry of Investment and Foreign Economic Relations is inviting only responsible businesses to the country. The economic interaction between Myanmar and Hong Kong SAR has been increasing rapidly. Hong Kong emerged as the third-largest investor in Myanmar after Singapore and China. Between FY2016-2017 and January 2021, 144 enterprises from Hong Kong brought in foreign direct investment of $2.5 billion into Myanmar, according to an official data on permitted enterprises released by the DICA.

Source: The Global New Light of Myanmar

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Myanmar mineral exports plunge by $521 mln as of 19 February

by TRADING

The value of Myanmar’s mineral exports has drastically fallen to US$447 million as of 19 February in the current financial year 2020-2021 since 1 October, reflecting a severe drop of $521 million as against a year-ago period, the Ministry of Commerce data indicated. The mineral exports hit 968.6 million in the corresponding period of last FY. The coronavirus impacts led to the slump in mineral exports this FY. The heightened COVID-19 measures also shut down the events like gem emporium and expo, a trader said. So far, excavation of over 1,250 mining blocks has been permitted on a manageable, small, medium, and large scale, according to the Ministry of Natural Resources and Environmental Conservation. Due to the limited extraction of natural resources, exports of forest products and minerals had dropped significantly in the previous years. Permits for mining blocks were suspended in 2016.

However, after two years, Myanmar’s mining sector has now been opened to local and foreign investors, according to the ministry. Within two years of implementing the Myanmar Mines Law, the Mines Department has approved more than 140 out of 3,000 proposed mining blocks. Many more blocks are to be granted the permit. The Myanmar Mines Law was enacted on 24 December 2015. However, the law came into force when the rules were issued on 13 February 2018. The ministry undertakes the screening process of the proposals for medium and large-scale mining blocks. As per the regulatory changes in 2018, regional and state governments are given the power to process applications for artisanal and small-scale mining blocks.

Under the new regulations, foreign firms can invest in large blocks which cover up to 500,000 acres (about 202,000 hectares). In contrast, local firms can invest in all kinds of blocks. Investors can seek a permit to mine minerals such as gold, copper, lead and tin. The licences cover prospecting, exploration, and production. Myanmar’s mineral exports have shown a marked increase in the previous FY2019-2020, touching $1.87 billion, an increase of $405.48 million compared with the year-ago period, according to the data from the Ministry of Commerce. In the FY2018-2019, mineral exports were pegged at just $1.465 billion. Myanmar’s mineral products constitute 10 per cent of overall exports. About 80 per cent of mineral products are shipped to external markets through sea trade. At the same time, 20 of them are sent to neighbouring countries through border trade channels.

Source: The Global New Light of Myanmar

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Agro exports surge by $781 mln as of 19 February

by TRADING

The agricultural exports have touched a high of US$2.25 billion as of 19 February 2021 in the current financial year since 1 October 2020 on the back of strong global demand for agricultural products amid the coronavirus impacts. The figures reflect a significant rise of $781.5 million this FY. According to the trade figures released by the Ministry of Commerce, the ago exports soared from $1.47 billion in the corresponding period of the 2019-2020 FY. Myanmar’s agricultural exports rose regardless of the coronavirus’s impact on foreign demand for other export groups. However, 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 industry’s chief 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, the involvement of 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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Myanmar pulls $672.59 mln in 2020-2021FY

by INVESTMENT

Myanmar attracted foreign direct investment of more than US$672.59 million between 1 October and 31 January in the 2020-2021 budget year, including an expansion of capital by existing enterprises and investments in the Thilawa Special Economic Zone, according to the Directorate of Investment and Company Administration (DICA). MIC intends to reach an FDI target of $5.8 billion for the current FY2020-2021. The Ministry of Investment and Foreign Economic Relations has been inviting responsible businesses to benefit the country.

Myanmar Investment Commission (MIC) ensures to approve the responsible businesses by assessing environmental and social impacts. The commission is working together with the relevant departments to screen the projects. Singapore is the top source of foreign direct investments into Myanmar in the first four months of the current FY, DICA’s statistics indicated. China stood as the second-largest investors this FY with an estimated capital of $139.354 million from 10 enterprises, followed by Hong Kong SAR investing $87 million in Myanmar.

Those enterprises listed from Thailand, India, Japan, Malaysia, Republic of Korea, UK, Viet Nam, Marshall Island and China (Taipei) also made investments this year. Of 38 foreign enterprises permitted and endorsed by MIC and the respective investment committees between 1 October and 31 January of the current financial year, 20 enterprises pumped FDI into the manufacturing sector. The power sector received six projects, and the livestock and fisheries sector attracted five projects.

Other service sector drew four projects while the agriculture sector pulled two projects, and one foreign enterprise entered the hotel and tourism sector. The FDIs stood at $6.9 million from 158 enterprises in the FY2016-2017, $6.119 billion from 234 businesses in the FY2017-2018, $1.94 billion from 89 projects in the 2018 mini-budget year, $4.5 billion from 298 enterprises in the FY2018-2019 and $5.689 billion from 253 businesses in the FY2019-2020, respectively, the DICA’s data indicated. Those enterprises have created over 96,000 jobs in the FY2016-2017, 110,000 jobs in the FY2017-2018, over 53,000 jobs in the 2018 mini-budget period, over 180,000 jobs in the FY2018-2019 and 210,000 jobs in the FY2019-2020, respectively.

Source: The Global New Light of Myanmar

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Maritime trade decreases by $2.28 bln in 2020-2021FY

by TRADING

The value of Myanmar’s maritime trade for the period between 1 October and 12 February in the 2020-2021 financial year touched a low of US$7.997 billion, a drastic drop of over $2.28 billion compared to the year-ago period, according to the Ministry of Commerce. While maritime exports were valued at $3.28 billion, imports were registered at $4.7 billion. Compared to the same period in the 2019-2020 budget year, imports fell by $1.53 billion, while exports decreased by $751 million.

Meanwhile, the value of trade through the border this FY was estimated at $3.9 billion, a decrease of $56 million as against a year-ago period. Both sea trade and border trade dropped amid the coronavirus impacts. The neighbouring countries tightened border security and limited trading time to contain the virus’s spread. Pandemic-induced container shortage pushed up the freight rates to almost triple in Myanmar, causing delays for traders.

Additionally, according to the Myanmar Mercantile Marine Development Association, some ocean liners suspended cargo transport from Myanmar.
The halt of ocean liners will undoubtedly affect the maritime trade. The cargo transport will double or triple if we conduct the trade with small ships, said an official of the association. The country’s total external trade reached $11.987 billion, which plunged from $14.3 billion recorded in a year-ago period.

Myanmar’s sea trade generated $26 billion from 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. At the same time, 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

AMATA puts off listing date in equity market

by ECONOMY

The listing date, before scheduled, of Amata Holding Public Co., Ltd. (AMATA on Yangon Stock Exchange (YSX) would be postponed for a certain period. And the rescheduled listing date announced in due time, according to the YSX notification on 26 February 2021. After scrutinizing submitted application documents and a deliberate listing examination, YSX approved the Amata Holding Public Co., Ltd. (AMATA) to be listed on YSX under Section 41 (c) of the Securities Exchange Law and Section 7 and 8 of the Securities Listing Business Regulations, on 28 December 2020. Earlier, it was scheduled to debut on the exchange on 12 March.

AMATA is the very first hotels and tourism sector to be listed in the equity market. The base price of AMATA will be announced on the YSX website one working day before the listing date. On 18 July 2018, the company issued a prospectus in which 596 investors held 497,598 shares at an offering price of K5,000 per each unit. AMATA would be the seventh public company to list on the exchange. As per the company’s profile, AMATA is a public holding company and operates a resort in Ngapali Beach, Inle Lake and Bagan, and a hot-air ballooning business with 15 balloons in six cities. AMATA owns 99.99% share from United International Group Co., Ltd and 51% shares from Myanmar Ballooning Co., Ltd.

At present, shares of six listed companies — First Myanmar Investment (FMI), Myanmar Thilawa SEZ Holdings (MTSH), Myanmar Citizens Bank (MCB), First Private Bank (FPB), TMH Telecom Public Co. Ltd (TMH) and the Ever Flow River Group Public Co. Ltd (EFR) — are being traded on the exchange. On 26 February 2021, the share prices of FMI were closed at K9,300 per unit, MTSH at K3,500, MCB at K8,200, FPB at K22,000, TMH at K2,800 and EFR at K3,350, respectively. Usually, over K60 million worth of shares were traded on the exchange every day. The COVID-19 impacts cooled down the market. The stock markets worldwide have reported their largest declines since the 2008 financial crisis.

Similarly, the local equities market is also scared by the COVID-19 crash, a market observer points out. At present, people are keeping emergency savings rather than investing amid the COVID-19 crisis and current political conditions, he added. Next, the Securities and Exchange Commission of Myanmar (SECM) has allowed foreigners to invest in the local equity market from 20 March 2020. Furthermore, YSX launched a pre-listing board (PLB) on 28 September 2020 to provide unlisted public companies with fund-raising opportunities and build a bridge toward listing on YSX, YSX stated. The YSX was launched four years ago to improve the private business sector.

It disseminates rules and regulations regarding the stock exchange and knowledge of share trading through stock investment seminars. The stock exchange has also sought the government’s support to get more public companies to participate in the stock market and help more institutional investors, such as financing companies, investment banks, and insurance companies, to emerge. Amid the COVID-19 crisis, Myanmar’s securities market has been able to continue operating without stopping trading. According to the annual report released by the exchange, a total of K12.6 billion worth of 1.87 million shares by six listed companies were traded on the Yangon Stock Exchange (YSX) in 2020, a significant drop compared to 2019. Over 2.4 million shares from five listed companies, valued at K13.39 billion, were traded on the exchange in 2019. 

Source: The Global New Light of Myanmar