Monthly Business Brief, April 2024

by Business Article

Economy

Gold price records hike up to K.4.8 million per tical

Domestic gold price persistently surged to K 4.8 million per tical (0.578 ounce or 0.016 kilogramme). Discussions are underway by Monitoring and Steering Committee on Gold and Currency Market to establish quality criteria and base prices for gold to ensure systematic trading in the gold market. The Committee comprises authorities from The Central Bank of Myanmar (CBM), Yangon City Development Committee, the Department of General Administration and law enforcement agencies.

Banking and finance

Kyat depreciates to K 3,900 against US dollar and CBM interventions

 Kyat weakened to K 3,900 against US dollar at end March at the over the counter market.  The Central Bank of Myanmar (CBM) sold a total of 14 million baht to the export and import businesses via an online trading platform on 27 April. Likewise, the CBM has also sold US$3 million, 2 million yuan and 40 million baht to the export and import businesses on 3 April. CBM revoked the licences of seven money changers and suspended those of 19 money changers for six months in April as they failed to comply with the rules, guidelines and directives.

Trade

Myanmar foreign trade at US$30 billion in FY 2023-2024, $4 billion less than last year

Myanmar total foreign trade in 2023-2024 (April- March) was $30 billion in which $ 14.6 billion for export and $ 15.4 billion import. The trade was $ 4 billion less than $ 34 billion in 2022-23. Share of overseas and border trade in 2023-24 stood 74:26 ratios. Myanmar exported $ 8.8 billion manufacturing goods and $ 3.8 billion agricultural products. Myanmar bagged US$1.48 billion from over 1.76 million tonnes of pulse exports in year 2023-2024. Myanmar’s seaborne trade registered over 1.6 million tonnes of pulse exports worth $1.34 billion, whereas over 157,409 tonnes of pulses worth $141.38 million were sent to the neighbouring countries through border trade. Myanmar shipped fishery products worth US$714.89 million to foreign trade partners in 2023-2024, although it was shrank from $765.94 million registered in the FY 2022-2023. Myanmar exports fishery products to Japan, European countries, China and Thailand through maritime trade channels and also delivers fish, shrimp, prawns, crab and other seafood to neighbouring countries via border posts.

Trade Dept approves container shipping for Myanmar-Thailand border trade

The Trade Department under the Ministry of Commerce released a news bulletin 1/2024 on 11 April that it allows to container shipping to and from Yangon-Kawthoung-Ranong for Myanmar-Thailand border trade. Two jetties in Shwe Pyi Tha Township in Yangon are allowed to provide temporarily for international cargo port services in order to ensure a fast and smooth trade flow.

Investment

Almost US$ 661 million of FDI with 71 projects entered to Myanmar in FY 2023-24 in which power sector shared the top position at $ 375 million with 3 projects followed by manufacturing sector at $ 151 million with 60 projects.

According to PTTEP’s announcement, Chevron, a US company officially withdrew from Yadana Gas project in early April. Chevron share was moved to PTTEP (63% share) and MOGE. Axiata, a Malaysian telecom company sold its shares to  EDOTCO Myanmar with $ 150 million and left from Myanmar. EDOTCO Myanmar is a major business which implements over 3,000 telecommunication towers in Myanmar.

Manufacturing

11 factories produce 8 million tonnes of cement annually

Eleven cement factories produce over eight million tonnes of cement annually. The private sector operates 16 cement factories, while the State sector occupied three. If all factories are operational in full capacity, they can collectively produce over 16 million tonnes of cement a year. Annual local consumption stands at approximately 10-11 million tonnes so that local production can meet two-thirds of the local demand.

Downturn in production eases across Myanmar, but outlook worsens according to PMI

According to Myanmar Purchasing Manager Index (PMI) , the first quarter of 2024 ended with a further deterioration in operating conditions across Myanmar’s manufacturing sector.  However, the downturn across the sector moderated further, as the latest rates of contraction for output and new orders continued to weaken since last December.   As a result, while buying activity remained in retrenchment mode, the downturn here also moderated. AlthoughPMI index in March was 48.3, the highest in last 5 month period, the manufacturing sector is a weaker deterioration due to weak output and falling employment. It is worsen in April due to electricity shortage especially in industrial zones in Yangon where electricity is available only 4 hours a day. Manufacturing firms face high operation cost with generator and are difficult to run the business.

COVID

  • In order to continuously control the infection of COVID-19, the rules and restrictions have been extended until the end of May 2024.

Tender invitation for cateringservices on Yangon-Mandalay trains

by SERVICES

According to Myanma Railways, under the Ministry of Transport and Communications, tenders will be invited for catering services for a one-year contract (from 1 May 2024 to 30 April 2025) for the restaurant cars on trains running between Yangon and Mandalay.
Tender proposal forms and terms and conditions can be obtained from the business manager’s office in Mandalay (Region 3) and Yangon (Region 7) from 4 to 26 April.
An open tender will be held at the meeting hall of the Myanmar Railways head office, located on the first floor of the Nay Pyi Taw Railways Station, at 1 pm on 29 April.

Source: The Global New Light of Myanmar

Manufacturing sector exports surpass US$8.8 bln in FY2023-2024

by MANUFACTURING

The export value from the manufacturing sector crossed US$8.8 billion in the financial year 2023-2024, indicating a drop of $2.09 billion compared with that of the FY 2022-2023, the Ministry of Commerce’s statistics showed.
The finished industrial goods export amounted to $10.9 billion in the FY 2022-2023.
By two modes of transport (sea and land border), Myanmar delivers manufacturing goods to foreign markets.
Myanmar exports agricultural products, livestock products, fisheries, minerals, forest products, finished industrial goods, and other goods, while it imports capital goods, intermediate goods, raw materials from CMP garment factories, and consumer goods.
Myanmar has been implementing the National Export Strategy (NES) 2020-2025 in order to bolster exports. The priority sectors of the NES comprise agricultural production, garment and apparel, industrial and electronic device, fishery business, forest product, digital manufacturing and service, logistic service, quality management, trade information service, innovation and entrepreneurship sectors. 

Source: The Global New Light of Myanmar

Monthly Business Brief, March 2024

by Business Article

Economy

National Planning Law and Union Tax Law released

At the end of March, National Planning Law and Union Tax Law were released by the Government. The FY 2024-2025 National Planning Law promulgated on 29th March 2024, the country achieved GDP growth by 3.5% in 2024-24 FY and the growth target will be at 3.8% in FY 2024-25. GDP by composition, the service sector has been the highest composition with 43.5%, and followed Industry Sector by 33.4% and Agriculture Sector by 23.1%. It is targeted to grow 5% in Service Sector, 3.5% in Industry Sector and 1.9% in Agriculture in FY 2024-25.  Tax rates on Special Goods Tax, Commercial Tax and Income Tax are merely as same as last year.

Gold price records hike up to K.4.4 million per tical

With spot gold price climbing over US$ 2,190 per ounce and kyat depreciation to over K 3,900 against the US dollar at end of March, domestic gold price persistently surged to K 4.4 million per tical (0.578 ounce or 0.016 kilogramme).

Banking and finance

Kyat depreciates to K 3,900 against US dollar and CBM interventions

 Kyat weakened to  K 3,900 against US dollar at end March at the over the counter market although The Central Bank of Myanmar (CBM) intervened in the currency market by selling dollar. CBM pumped US$ 18 million, 12 million yuan and 312 million Thai bahts in March. CBM reference exchange rate is still set K 2,100 to a UD dollar. CBM revoked the licenses of six money changers and suspended four money changers to six months as they failed to comply with rules, regulations and directives.

The Central Bank of Myanmar sells foreign currencies to importers via an Online Trading Platform. It allows private banks to sell foreign currencies for petty cash at their exchange counters for people who go abroad to undergo medical treatment, study, and work, aiming at stabilizing currency exchange rates and preventing price manipulation. The dollar transaction was K3,375 per dollar at the Online Trading Platform between the banks and importers/exporters, and the three private banks under the guidance of CBM are selling between US$300 and $500 at K3,100 per dollar as a special plan. CBM warned that some Facebook pages, groups, Apps and websites intentionally spread misinformation and false news and conduct Forex trading without possessing any work licences and action will be taken.

Trade

Implementation of MACCS for Cargo Clearance Processes at Tachilek Border on 22 March 2024

The Customs Department has extended the Myanmar Automated Cargo Clearance System (MACCS) to the Tachilek (Myanmar -Thai border) area on 22 March 2024. This system is currently operational in Yangon and the Myawady border trade. Although MACCS system was practiced in Muse and Chinshwehaw (Myanmar -China border) areas, all border trade activities are suspended in those areas.

Energy

Installation of 14MW solar power system planned for Thilawa SEZ

The Ministry of Electric Power (MoEP) has announced plans to install a solar power system with a capacity of up to 14 megawatts in the Thilawa Special Economic Zone (SEZ) in Thanlyin Township, Yangon Region. Currently, three plants within the Thilawa SEZ have already installed solar systems, generating approximately two megawatts of power. Covering an area of 667.275 hectares (approximately 1650 acres), Thilawa SEZ has attracted investment from 114 companies across 21 countries.

Workshop on Improved Cook Stove Distribution Monitoring held

“Project Monitoring and Evaluation Workshop” under “The Project of CCC Program of Activities for Distribution of Improved Cook Stoves in Developing South and Southeast Asian Countries (Myanmar)” co-organized by the Dry Zone Greening Department of the Ministry of Natural Resources and Environmental Conservation of Myanmar and the Climate Change Centre (CCC) of the Republic of Korea, at Thingaha Hotel in Nay Pyi Taw. During the six year project period in Sagaing, Mandalay and Magwe Regions, it is estimated to distribute 500,000 improved cook stoves, which can save 40 per cent of fuel wood, to 218,678 households in 1,109 villages in six districts. It has already distributed over 438,000 stoves to date and could help reduce over 485,000 tonnes of carbon emission.

COVID

  • In order to continuously control the infection of COVID-19, the rules and restrictions have been extended until the end of April 2024.

Myanmar pockets over US$250M in mineral exports in 11 months

by ECONOMY

Myanmar bagged US$256.44 million from mineral exports as of 8 March in the current financial year 2023-2024, commencing 1 April, according to the Ministry of Commerce.
The mineral exports plunged from $323.366 million recorded in the corresponding period last FY, showing a drop of over $66 million.
The public sector performed mineral exports valued at over $33 million, whereas the private sector saw mineral exports worth over $220 million.
The export items are gems and jewellery, gold, jade, pearl, diamond, lead, tin, tungsten, silver, copper, zinc, charcoal and other minerals.
Myanmar’s external trade with foreign partners reached over $27.758 billion as of 1 March in the current Financial Year 2023-2024, beginning 1 April, comprising exports worth over $13.378 billion and imports worth $14.379 billion. Myanmar’s seaborne trade value crossed over $20.55 billion this FY, while border trade was valued at $7.207 billion, the Ministry of Commerce’s statistics indicated.

Source: The Global New Light of Myanmar

Private car sales, including EVs, stable; May forecasted improvement

by ENERGY

The sale of private cars, including EVs, has been regular, and it is expected to become active in May, said Myanmar Automobile Manufacturer and Distributor Association’s general secretary U Kyaw Swa Tun Myint.
Currently, commercial-use cars priced around K50 million, private cars priced between K50 million and K100 million and private cars priced between K100 million and K200 million are being sold regularly, he said.
“The sale has been regular. Those who need cars buy. Dealers also buy if they need. There are private car customers, and some buy cars for their business. It is not that the sale has completely stopped, but it runs regularly. No surge has been seen, though the sale has been normal. The sale of cars priced between K400 million and K500 million has been slow, but K100 million-K200 million cars have been sold regularly. EV is a part of the automobile industry, so there are buyers and sellers for EVs,” he said.
If no policy change happens in March and April after the Thingyan period, it is not likely to have an impact on the car market.
As of December 2023, automobile sales have been slowing. Around May after Thingyan, the car market is always lively every year, so there is also a possibility this year, he said.
“Every May, before monsoon season, the car market is always lively. Some buy for their business, such as school ferry services. In previous years, the sale used to be active again in around May. There is a 60 or 70 per cent possibility this year too. In Myanmar, there is a community that wants to enjoy luxury cars, and there is another community that wants to make profits from buying and reselling cars. Vehicles can easily be liquidated. So, people consider buying and reselling cars as a business-like making investment in property and gold,” said U Kyaw Swa Tun Myint.

Source: The Global New Light of Myanmar

Installation of 14MW solar power system planned for Thilawa SEZ

by ENERGY

The Ministry of Electric Power (MoEP) has announced plans to install a solar power system with a capacity of up to 14 megawatts in the Thilawa Special Economic Zone (SEZ) in Thanlyin Township, Yangon Region.
Currently, three plants within the Thilawa SEZ have already installed solar systems, generating approximately two megawatts of power. Further studies conducted by companies in the zone suggest that the solar system has the potential to produce up to 14 megawatts of power.
Myanmar-Japan Thilawa Development Company Limited (MJTD) has confirmed that once the solar system is installed, surplus power will be transmitted and distributed to other factories within the special economic zone through the Ministry of Electric Power’s power lines.
Covering an area of 667.275 hectares (approximately 1650 acres), Thilawa SEZ has attracted investment from 114 companies across 21 countries. Among the economic zones currently being implemented in Myanmar, Thilawa SEZ stands out as the most successful. 

Source: The Global New Light of Myanmar

MoNREC authorizes essential mineral production for cement manufacturing

by MANUFACTURING

The Ministry of Natural Resources and Environmental Conservation (MoNREC) has announced the approval for the production of essential raw mineral resources required for manufacturing cement.
Across regions and states, there are allocated plots for various minerals: 29 for limestone, 13 for quartz and gypsum, 103 for charcoal, two for clay, and two for cast iron and bauxite.
During a coordinating meeting held on 21 February in Nay Pyi Taw, Union Minister for MoNREC, U Khin Maung Yi, stated that the production of necessary raw mineral resources essential for cement manufacturing, such as limestone, charcoal, gypsum, quartz, cast iron, bauxite, and clay, has been authorized.
Currently, there are a total of 19 cement factories across states and regions, including Nay Pyi Taw. Twelve of these are operational, while the remaining seven are temporarily suspended.
Charcoal produced by charcoal factories serves not only the cement industry but also acts as an alternative energy source in metal recycling, brick, cigarette, beverage, tissue, and rubber manufacturing. Additionally, gypsum and quartz find applications in fertilizer production.
Efforts by the ministry and relevant departments are focused on fully operating cement factories, sourcing input materials domestically, ensuring the availability of high-quality input materials and machinery, and improving operational efficiency. These efforts aim to reduce reliance on imports.

Source: The Global New Light of Myanmar

Myanmar foreign trade surpasses US$27B in 11 months

by TRADING

MYANMAR’s external trade with foreign partners reached over US$27.758 billion as of 1 March in the current financial year 2023-2024, beginning 1 April, according to the Ministry of Commerce.
Myanmar’s exports were worth over $13.378 billion, whereas the country’s imports were valued at $14.379 billion between 1 April 2023 and 1 March 2024.
Myanmar’s seaborne trade value crossed over $20.55 billion this FY, while border trade was valued at $7.207 billion.
The trade figure over the past 11 months shrank from $31.36 billion recorded in the corresponding period last FY, indicating a sharp drop of over $3.605 billion.
Myanmar exports agricultural products, animal products, minerals, forest products, and finished industrial goods, while it imports capital goods, intermediate goods, raw materials imported by the CMP enterprises and consumer goods.
Myanmar has been implementing the National Export Strategy (NES) 2020-2025 in order to bolster exports. The priority sectors of the NES comprise agricultural production, garment and apparel, industrial and electronic device, fishery business, forest product, digital manufacturing and service, logistic service, quality management, trade information service, innovation and entrepreneurship sectors.

Source: The Global New Light of Myanmar

1.5M visitors, including 60,000 foreign tourists, enter Shan State in 2023

by HOTEL & TOURISM

According to the Directorate of Hotels and Tourism, a total of 1.5 million travellers, including more than 60,000 foreigners, entered Shan State in 2023.
Most of the tourist arrivals in Shan State are in eastern Shan, southern Shan, and northern Shan areas. In 2023, a total of 1,413,015 domestic tourists and 68,317 overseas travellers, a total of nearly 1.5 million domestic and international tourists, arrived in Shan State.
Shan State has many places that can be visited all year round, besides the 12-month festivals and the plantations and natural scenery in the highland areas such as Pindaya and Ywangan, and the ethnic dress and lifestyle are attracting tourists.
Out of the 457 hotels and guesthouses licensed by the Ministry of Hotels and Tourism for the convenience of domestic and foreign tourists, 337 hotels and guesthouses are currently open and providing services.
In addition, Shan State’s famous Inlay Lake will host rowing competitions on Saturday and Sunday, according to the Directorate of Hotels and Tourism (Shan State). 

Source: The Global New Light of Myanmar