Posts in category: TRADING

With the rising dollar exchange rate, the price of black beans has soared by K54,000 per tonne in the domestic market in two weeks, according to Yangon Region Chambers of Commerce and Industry (Bayint Naung Brokerage). Although the black bean price on 1 May was K888,500 per tonne, the price grew to about K942,500 per tonne on 14 May, which is an increase of K54,000 per tonne in only two weeks, according to the bean market data.

Presently, the local dollar exchange rate was at K 1,595 per dollar on 1 May, but it upturned to K1,675 per dollar on 14 May. Myanmar yields around 400,000 tonnes of black bean annually, and the bean is primarily exported to India. Similarly, about 50,000 tonnes of pigeon peas are produced yearly and exported to India as well.

Since 2017, India has been setting the import quota on beans, including black beans and pigeon peas. Myanmar has to export black beans and pigeon peas under a quota system and limit period. Consequently, according to market observers, there is no guarantee that we could get the prevailing market price this year. Following no assurance of black beans and pigeon peas in the market, the association suggested at the end-October 2020 that the local farmers grow the black-eyed beans more.

Source: The Global New Light of Myanmar

In the first seven months of the current fiscal year, Myanmar’s foreign trade fell by almost 30 percent (over $ 5 billion) from the same period last year, and exports fell by more than $ 2.2 billion, according to figures released by the Ministry of Commerce. From October 1 to May 7 of the 2020-2021 fiscal year, the trade volume was only $ 18.086 billion, up from $ 23.428 billion in the same period last year. In the first seven months of the current fiscal year, Myanmar’s foreign trade fell to $ 5.342 billion from the same period last year. The percentage has dropped to almost 30 percent.

During that period, Myanmar’s exports were only $ 8.970 billion, down $ 2.264 billion from the same period last year. Imports were only $ 9.115 billion, down more than $ 3 billion from the same period last year. Myanmar trades with both foreign and maritime trade routes. During the period, maritime trade amounted to $ 11.726 billion, down $ 4.488 billion from the same period last year. Border trade amounted to $ 6.360 billion, down from $ 853.918 million in the same period last year. Animal products Fishery products; Mining products; Forest products; Finished CMP; Other exports are being exported. Imports include investment goods; Industrial raw materials; Consumer goods It is mainly importing CMP raw materials.

Myanmar’s foreign trade in the last fiscal year 2019-2020 was $ 36.731 billion, according to the Ministry of Commerce. In the 2018-2019 fiscal year, the foreign trade volume was $ 35.147 billion. In the first six months of 2018, foreign trade amounted to $ 18.728 billion. In the 2017-2018 fiscal year, the trade volume was $ 33.578 billion. In the 2016-2017 fiscal year, the trade volume was $ 29.209 billion. The main priority areas of the National Export Strategy 2020-2025 to implement export promotion are agro-based food production; Textile and clothing sector; Industry and electronics, fisheries sector, forest products, digital products and services, logistics services, quality management sector, trade Information Services; and innovation and entrepreneurship.

Source: Daily Eleven

The trade between Myanmar and China through the Muse land border in the past seven months (Oct-Apr) plummet to US$2.6 billion from $2.94 billion registered in the year-ago period. The cross-border trade via Muse ground to a halt after China tightened the border security and made policy changes in light of the COVID-19. China temporarily shut down Mang Wein and Chinshwehaw checkpoints in early April. According to Muse Rice Wholesale Centre, Myanmar’s Muse border trade came to a standstill following the closure of Mang Wein border checkpoint triggered by the detection of the coronavirus cases in the border area.

A Myanmar citizen who tested positive for COVID-19 was found in Kyalgaung precious stone market on 29 March. It prompted China to restrict border access at the Mang Wein checkpoint, a major border crossing between Muse and Kyalgaung areas. Consequently, there is no trade flowing in and out of the country via the Muse-Mang Wein border. Furthermore, trade through the Kyinsankyawt border, a major checkpoint for fruit exports, is down by 80 per cent, traders said. The closure of the Mang Wein checkpoint wreaked havoc on the Muse trade. The trade value through Muse land border was down by $337 million compared to the corresponding period of last FY, the Ministry of Commerce’s data showed. Suspension in border trade harmed perishable fruits.

The policy changes in China’s border exacerbated Myanmar’s exports amid the COVID-19 resurgences, said a Muse trader. Prior to the Mang Wein checkpoint closure, Myanmar daily sent about 2,000 tonnes of rice and 40,000 broken rice bags to China. At present, Myanmar’s rice export to China through the Muse land border has stalled amidst the coronavirus concerns. Moreover, the exports of seasonal fruits such as watermelon, muskmelon and mango are declining. This Man Wein post plays a pivotal role in trading between Myanmar and China. Myanmar exports rice, broken rice, onion, chilli pepper, pulses and beans, food commodities and fishery products to China. In contrast, electrical appliance, equipment, medical device, household goods, construction materials and food products are imported into the country via Mang Wein. 

Source: The Global New Light of Myanmar

The Trade Department under the Ministry of Commerce extended the licence exemption deadline for 99 exports and imports until 7 June 2021, according to the MOC’s notification dated 4 May. The department has notified that exporters and importers do not require to seek licences for 37 HS code lines for exports and 62 lines for imports by 7 May 2021 to facilitate the trade.

Export items with licence exemption include onion, garlic, rice, broken rice, raw sugar, refined sugar, natural rubber and cotton. The exemption covers the following import goods; flour, soybean seed, palm oil, food commodity, cement, gasoline, diesel, pharmaceuticals, fertilizer and lubricant. Previously, a two per cent withholding tax on exports and imports was temporarily exempted in border trade, owing to the difficulties to pay tax amid the closure of private banks.

At present, the exempt status is revoked starting from 1 May. Next, the department cut the red tape for imports of CMP raw materials and some previously imported pharmaceuticals. However, tax cut and licence exemption tackle the trade slowdown amid the heightened border security measure triggered by the new wave of the coronavirus and the lack of money in circulation, an exporter shared his opinion.

Source: The Global New Light of Myanmar

The prices of rice and rice crops have modestly increased in the domestic market on the back of strong demand, traders from the Bayintnaung wholesale market said. Following the coronavirus resurgence in Myanmar, rice was highly demanded in the domestic market. The domestic retail market saw a rise of K700-3,000 per 108-pound bag in early May. At present, the rice prices moved in the range of K22,500 to K50,000 per bag depending on the quality and varieties, as per the Bayintnaung market. Similarly, rice crops fetched K506,000-K524,000 per 100-basket, with a remarkable rise of K20,000-33,000.

Additionally, Myanmar regained rice market shares from certain countries on account of its high quality. The price also increased, Myanmar Rice Federation stated. The export price of Myanmar’s rice is relatively lower than the rates of Thailand and Viet Nam. Yet, the prices are higher than those market prices of India and Pakistan, MRF’s data showed. Myanmar has shipped more than 720,000 tonnes of rice and broken rice to foreign countries over the Q1 (1 October and 15 January) of the current financial year 2020-2021, earning over US$275 million, Myanmar Rice Federation stated. The border trade handled over 308,000 rice tonnes, while maritime trade covered over 418,000 tonnes in Q1.

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. Last year, Myanmar shipped rice to 66 foreign markets. China is the main buyer of Myanmar rice, followed by the Philippines and Malaysia. Madagascar is the fourth-largest buyer, and Poland, the fifth-largest buyer of Myanmar rice. Meanwhile, Myanmar exported broken rice mostly to Belgium, followed by China, Senegal, Indonesia and the Netherlands. Broken rice was placed in 60 foreign markets. Myanmar shipped 3.6 million tonnes of rice in the FY2017-2018, which was an all-time record in rice exports. The export volume plunged to 2.3 million tonnes in the FY2018-2019.

Source: The Global New Light of Myanmar

Currently, motorcycle importers are facing difficulties due to the announcement of the temporary suspension of the import of official motorcycles through the Myawaddy border. The Ministry of Commerce has sent a letter of notification to Myawaddy border traders on May 8 and is inspecting motorcycle showrooms.

The statement said that the import of motorcycles, including the ITC Card, would be suspended from May 8, 2021, until further notice. Currently, there are no losses, but the work has stopped. When businesses stop, there are job losses. Some of them are buying in advance, and most traders are losing money when the import ban on foodstuffs, including soft drinks, has recently been suspended from the border.

Thailand Vietnam Motorcycles made in Laos are officially imported by motorcycle dealers, as well as from Thailand and Vietnam. Japanese used motorcycles were also imported by private entrepreneurs.  The sudden ban on motorcycle imports has hurt Myawaddy border businesses and local motorcycle dealers. Motorcycles imported from Myawaddy border; Border traders warn that the suspension of official imports of soft drinks and four foodstuffs could reduce trade volume significantly.

Source: Daily Eleven

According to the Myanmar Corn Industrial Association, Myanmar revoked a two per cent withholding tax exemption on corn exports during the new wave of coronavirus, and so the corn price is expected to fall. The withholding tax exemption status for corn exports to Thailand duly expired amid the pandemic. The two per cent WHT had to be paid starting from 1 May. The two per cent WHT was levied on corn exports through the land border. During the pandemic, the tax was temporarily exempted.

At present, the exempt status is revoked. Consequently, the lower commodity price is likely to happen. Myanmar is conveying corns to Thailand through the land border, with a tonne of corn fetching up about 8,000 baht.
Myanmar intends to ship 1 million tonnes of corn to Thailand this year. About 600,000 tonnes of corn have been delivered so far, the association stated. Thailand gives the green light to corn imports through Maesot under zero tariff (with Form-D) between 1 February and 31 August. Thailand has granted tax exemption on corn imports between February and August.

However, Thailand imposed a maximum tax rate of 73 per cent on corn import in order to protect the rights of their growers for the corns are imported during the corn season of Thailand as per the notification of the World Trade Organization regarding corn import of Thailand, a corn exporter said. Myanmar exported 2.2 million tonnes of corns to the external market in the past financial year 2019-2020 with an estimated value of $360 million, the Ministry of Commerce’s data indicated. Corn is cultivated in Shan, Kachin, Kayah and Kayin states and Mandalay, Sagaing and Magway regions. Myanmar has three corn seasons—winter, summer and monsoon. The country yearly produces 2.5-3 million tonnes of corns.

Source: The Global New Light of Myanmar

Yangon Region Gold Entrepreneurs Association (YGEA) has requested the State Administration Council (SAC) to resume the Telegraph Transfer (TT) system for gold export and import transaction, said U Myo Myint, chair of YGEA. At the present time, gold export has come to a stop after the international remittance for a gold transaction was changed from Telegraph Transfer (TT) to Letter of Credit (LC), he added. Gold export is not going well. Only through the TT system, the trade will go smooth.

If the transaction is permitted only with LC, the trade will completely halt. The YGEA has recently submitted a request for the resumption of TT payment system to the SAC. As per the notification released by the Ministry of Commerce on 12 August 2020, the transaction for gold export and import can be done only with the LC system. Myanmar is placed on the Grey List by the Financial Action Task Force (FATF). This inter-governmental body sets anti-money laundering standards. Therefore, the country needs to monitor the gold and jewellery exports and imports in order to ensure there is no illegal income.

According to Trade Department, the payment method was changed to LC as per the notification released by the Commission. The payment using LC can take about two months, cost banking service changes by two sides, and increase the charges for security matter in transport. Consequently, gold trading in the international market has also stalled due to volatile prices, YGEA stated. The domestic gold market might recover if the resumption of the TT system is allowed. Japan and the Republic of Korea primarily purchase gold and other jewellery pieces, and other tourists also buy them, the YGEA stated. Myanmar gave the green light to gold exports and imports in January 2018, with the aims of eradicating illegal trade, earn revenue for the country and maintaining the market’s stability. 

Source: The Global New Light of Myanmar

According to the estimation of the onion traders, the acres of onion plantations are expected to drop down in the next cultivation season because of the plunging onion price this year.The onions are primarily grown in Myittha, Myingyan and Natogyi townships in the Mandalay region. Earlier, the onion seeds fetched K40,000, but the growers bought and planted the seeds until they run out.

But this year, the seeds of onion fetched K30,000 and there is no buyer. Some of the farmers are still growing the onion. But in this situation, there will be only a few growers of onion. Now, the onion seeds are selling for K30,000, but there is no buyer. The farmers could not afford to buy the seeds, and they are not planting the onion yet. But they will grow the onion this year, I think.

But this year, the growers will not get a good price despite the high yield. However, the onion production has improved to 3,500 visses per acre from 2,500 visses per acre, according to the onion growers. In the first week of May last year, the onion price was K500 per viss. But this year, the price of the onion is only K250 per viss. This year, the farmers suffer losses because of high yield and no export to foreign countries. 

Source: The Global New Light of Myanmar

Traders are using the Hundi system for the convenient cash flow of border trading due to restrictions imposed on the limit of cash withdrawal from the bank, Chairman U Min Khaing of the Myanmar Corn Industrial Association said. Currently, the entrepreneurs are only allowed to withdraw K 20 million per week from the bank. That is the reason why the Hundi system is in practice in order to transfer the money. Most of the businessmen are using the Hundi system. The government authorities have said that they will take legal action against practising the Hundi system. They said that it is an illegal cash flow system. The bank has also lowered the weekly withdrawal limit to K20 million for company accounts currently.

The amount is minimal for big companies because, with this amount of money, they can only buy a vehicle. The companies are transferring the amount of money equal to the value of 20 to 50 vehicles. So, it is not convenient for the companies, and they are forced to use the Hundi system. However, the Hundi business is weak to protect transactions because it is less secure. Besides, they charge too much for services, he added. At present, Myanmar exports products including corn to Thailand through the Myawady border trade. And, the price of a tonne of corn is about 8,000 Bahts. Myanmar is set to reach an export target of one million tonnes of corn to Thailand this year with Form-D. So far, the country has already exported 600,000 tonnes of corn, said Myanmar Corn Industrial Association.

Myanmar is allowed to export corn to Mae Sot, Thailand through Myawady border trade between 1 February and 31 August with Form-D, under zero tariff. Myanmar corn exports were exempted from tax between February and August. Thailand imposed a 73 per cent tax on corn imports to protect the rights of their growers if the corn is imported during the corn season of Thailand. The maximum tax rate of 73 per cent is put under the notification of the World Trade Organization regarding corn import of Thailand. In the 2019-2020 financial year, Myanmar exported 2.2 million tonnes of corn to the foreign market, with an estimated value of US$360 million, according to the Ministry of Commerce’s data. Presently, corn is cultivated in Shan, Kachin, Kayah and Kayin states and Mandalay, Sagaing and Magway regions. Myanmar has three corn seasons — winter, summer and monsoon. The country yearly produces 2.5-3 million tonnes of corns. 

Source: The Global New Light of Myanmar