Business Article


Monthly Business Brief, May 2024

June 1, 2024

Economy

Replacement of FESC Chair and Retirement of two key ministers

The State Administration Council (SAC) replaced Chairman of Foreign Exchange Supervisory Committee (FESC) from Gen. Mya Tun Oo to Lt. Gen Nyo Saw on 28 May 2024. The State Administration Council (SAC) has allowed retirements of U Aung Naing Oo, Union Minister of Ministry 3 of SAC office and U Maung Maung Win, Deputy Minister of the Ministry of Planning and Finance on 27 May 2024.

Domestic gold price persistently surged to K 5 million in line with gold price at the highest at $ 2,450 per oz in world gold market on 20 May. Local gold price was continued to surge to K 5.2 million per tical (0.578 ounce or 0.016 kilogramme) at the end of May.

Banking and finance

Kyat depreciates to K 4,450 against US dollar and CBM interventions

 Kyat weakened to K 4,450 against US dollar at end May at the over the counter market.  The Central Bank of Myanmar (CBM) sold US$10 million, 22.5 million yuan, and 30 mllion Thai baht in May. The CBM injected a total of  US$176.71 million, 32.7 million yuan, and 1.8 billion Thai baht for exporters and importers and market in the past five months (January-May) 2024, with a view to curbing the volatile exchange rate in the local forex market. CBM took actions to 16 unauthorized money changers for making FE transactions using Facebook pages and internet websites without holding FE changer licences. In addition, 12 hundi players were taken action and 36 bank accounts and 38 pay accounts were closed in May.

Trade

Illicit trade harms both consumers and businesses

Seizures of illegal trade volume approximately amounted to K 250 billion in 12,430 cases up to April 2024 announced in Illicit Trade Eradication Steering Committee meeting held on 15 May. The committee highlighted that the International Trade Centre (ITC) showed a trade difference worth US$6 to 12 billion per year between Myanmar and its trade partners China, Thailand, India, and Japan, proving illegal trade between them. The illicit trade caused a decline in legal export volume and foreign exchange income. Moreover, the payment of illicit routes caused black markets, causing difficulties in calculating the income and expense of the State and obstacles to adopting the financial and monetary policies. The steering committee and special task forces from regions and states need to join hands for eradicating illicit trade which brings direct loss to consumers as well as businesses.

 

Trade Dept warns imports without licenses

The Department of Trade under the Ministry of Commerce released a news bulletin on 30 May that imports arrived at ports and airports without licenses will be taken actions. DOT warned for imports without licenses except essential goods allowed for Customs Bonded Warehouses for health and manufacturing sectors.

 

Over 1,500 food companies and factories apply for GACC in two and half years

A total of 1,550 Myanmar food processing companies and factories submitted over 3,000 applications to the General Administration of Customs of the People’s Republic of China (GACC) over the past two and half years, according to the Ministry of Commerce. According to GACC Decree 248 and 249, GACC registration is mandatory for food exporters starting from 1 January 2022.

Those individuals executing edible oil, oilseeds, stuffed pastry products, edible bird’s nest and related products, edible grains, grains milling industrial products and malt, fresh and dehydrated vegetables, dried beans, plant species, nuts and seeds, dried fruits, unroasted coffee and cocoa bean, special dietary food excluding milk-based formula, functional foods, bee products, aquatic products including farm products, animal products and animal feed and livestock animal businesses need to apply for GACC license in order to place their goods in China’s market.

 

Investment

CJ Feed Myanmar temporarily stopped operation

US $ 20 million Korean investment CJ Feed Myanmar which produced chicken feed and DOC chicken temporarily stopped operation. The factory is set up in Myaung Daga Industrial zone in Hmaw Bi Township that produced animal feeds for chickens, ducks, pigs and fish meals as well as day old chickens and distributed to various states and regions.

 

Manufacturing

Private industries registered with DISI reach nearly 48,000 as of end-April

A total of 47,789 private industries have been registered with the Directorate of Industrial Supervision and Inspection so far. The registered private industries grew to 47,609 in the previous financial year 2023-2024 from 43,359 in the 2013- 2014 FY, showing of 4,250 increases in a decade. A total of new 180 industries were officially listed in April of the current FY 2024-2025.

With the private industries growing domestically, the DISI is providing services for small and medium enterprises to get access to technical assistance and funding, explore markets, register the private industrial enterprises in accordance with existing laws and conduct safety inspections of boiler and electrical usage at worksites and environmental impact assessment. Yangon Region, a commercial hub of Myanmar, is home to the private industries with 7,972, followed by Mandalay Region with 6,710 and Ayeyawady Region with 5,565.

The industries were struggled their operations with limited electricity supply by four hours a day in April and only two hours a day in May. Electricity supply is improving at end of June due to Cyclone and monsoon rainfalls.

 

 

COVID

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

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