Posts in category: TRADING

Myanmar’s trade gap has significantly narrowed to US$237.385 million in the financial year 2020-2021 from just $698.157 million registered in the corresponding period of the 2019-2020FY, according to the commerce data.
Between 1 October and 22 January in the current FY, Myanmar’s external trade drastically plunged to $9.7 billion from $12 billion recorded in the year-ago period. While exports were estimated at $4.7 billion, imports were valued at $4.768 billion this FY. Compared to the FY2019-2020, exports showed a drop of over $1 billion, while imports fell by $1.47 billion. Myanmar witnessed a slump in exports triggered by the coronavirus pandemic. Moreover, the country cannot hold jade emporiums.

As a result of this, export income plummeted, according to Myanmar Trade Promotion Organization. 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. Myanmar exports agricultural products, animal products, minerals, forest products, and finished industrial goods, while it imports capital goods, raw industrial materials, and consumer goods. The country’s export sector relies more on the agricultural and manufacturing sectors.

The country mainly imports essential goods, construction materials, capital goods, hygienic material and supporting products for export promotion and the import substitution. Myanmar’s trade deficit was pegged at $1.3 billion in the 2019-2020FY, $1.14 billion in the 2018-2019FY, $1.3 billion in the previous mini-budget period (April-September, 2018), $3.9 billion in the 2017-2018FY, $5.3 billion in the 2016-2017FY, and $5.4 billion in the 2015-2016FY, according to statistics released by the Central Statistical Organization. Under the National Planning Law for the Financial Year 2020-2021, Myanmar intends to reach an export target at US$16 billion and import at $18 billion. Moreover, a series of trade liberalization and openness for policy development have been introduced for enhancing a more viable trade environment. The private sector plays a prominent role in Myanmar’s market-oriented economic system. The ministry is highlighting free and fair trade, ensuring product safety and quality goods and services.

Source: The Global New Light of Myanmar

Kalay-Tamu border between Myanmar and India has not lifted its restriction yet amid the coronavirus impacts, said Chairperson U Hla Maung of Kalay-Tamu Border Chamber of Commerce. The cross-border trade between Myanmar and India has stopped since 10 March 2020. The Tamu border trade was supposed to resume in January, and however, in fact, it is still not back to normal due to the travel difficulties caused by the pandemic. The reopening of the border post would depend on the spread of the virus, and border crossing will be allowed in line with health guidelines.

Myanmar conducts border trade with neighbouring India through Tamu, Reed, and Htantlang land border crossings. Border trade via Tamu is estimated at US$60 million per year. India closed the border checkpoints in Mizoram and Manipur on account of COVID-19, and traders were reeling under the outbreak’s negative impact. Now, the exports through Reed border dramatically soared despite the slump in Tamu border trade. Between 1 October and 22 January in the current financial year, trade values were registered at over $19.44 million at Tamu post and $73.897 million at Reed.

There was no trade recorded at the Htantlang border. According to data, over the past three and half months since October, the India-Myanmar trade jumped to $93.337 million from $44.98 million recorded in the year-ago period on account of a strong export figure at Reed post released by the Ministry of Commerce. Myanmar exports mung beans, pigeon peas, green grams, areca nuts, ginger, saffron, turmeric, bay leaves, fishery products, fruits, and vegetables to India. At the same time, it imports pharmaceuticals, oil cakes, electronic appliances, motorbikes, steel and other construction machines and building materials from the neighbouring country.

Source: The Global New Light of Myanmar

Myanmar is preparing for 800 tonnes of honey export to the European Union market in the current financial year 2021-2022, according to the Ministry of Commerce. EU traders proposed Myanmar’s honey due to its organic production. Myanmar started to adopt Good Beekeeping Practices (GBP) in 2016. The EU gave the go-ahead to Myanmar’s honey to penetrate its market. Arise Plus Myanmar Trade-Related Assistance project implemented by the International Trade Centre and the Department of Consumer Affairs Department under the Ministry of Commerce are contributing to the sustainable growth of the honey market, suggestions to penetrate EU market and implementation of GBP, Hazard Analysis and Critical Control Point (HACCP) and Good Manufacturing Practices (GMP).

The project covers eight honey purifying factories and provides the know-how of food safety systems. Additionally, it also helps improve manufacturing quality control in production stages, ensure the honey is free from pests, pesticide and chemical residues, improve GMP in a value-adding chain, link with international buyers and upgrading the laboratory with the assistance of EU. Myanmar’s honey is exported annually to the United States, Canada, South Korea, Singapore, Malaysia, Thailand, China and Japan. The beekeeping business could help reduce the poverty rate in rural areas by creating more job opportunities, officials said. There are over 900 registered beekeepers in Myanmar.

The country produces over 7,000 tonnes a year and yearly ships 30,000 tonnes to foreign markets. A tonne of honey fetches US$1,700-1,900, said the beekeepers. Myanmar’s honey is required to be extracted by the European honey bee (Apis.mellifera) for exports to the EU. It is sent to both domestic laboratory and international laboratories to test pesticide and chemical residue if needed. Myanmar has nine processing factories in Nay Pyi Taw, Mandalay, Yangon and Sagaing regions and Shan State. Of them, a state-owned factory is offering purifying and packaging service for the small-scale honey traders, and the remaining eight factories are processing honey for the domestic market as well as exports. Myanmar produced 10,875.81 tonnes of honey during the past three financial years from 2013- 2014 to 2015-2016, of which 8,471.24 tonnes were exported.

Source: The Global New Light of Myanmar

Naungtayar potato association imported 25 tonnes of Mar potato species which is suited to the region. The Naungtayar potato association was formed by the potato growers from Naungtayar town, Pinlaung township, Pa-O Self-Administered Zone, Shan State (South). This year, the Naungtayar potato association imported 25 tonnes of Mar potato species from aboard. Last year, they bought from other companies.

In 2015-2016 financial year, the association got tax exemption, and it cost only K1,700 to reach Naungtayar. The association has to pay 15 per cent tax, and it costs K2,500 to reach Naungtayar. The local farmers will grow new species of potato. Then, they will distribute to the local farmers by keeping produced potato in the refrigerator, said Chairman U Khun San Oo of the Naungtayar potato association.

The association imported the new Mar species aimed for the local farmers to grow the potato at a lower cost, to get the good species of potato which is also suited to the weather condition, to yield higher, to produce good delicious potato and to ensure good quality of potato for the fried potato businesses. Naungtayar potato association is constructing a potato cold storage building and is targeted to complete in March. Upon completing the construction project, there will be a good advantage as the good quality potato can be exported. The potato could be stored longer. We will reduce the import of potato, and the local farmers could grow the potato at an affordable cost.

Source: The Global New Light of Myanmar

According to Myanmar Corn Industrial Association (MCIA), the demand for Myanmar corn from foreign countries is on the rise. With the rising demand for Myanmar corn, the price of corn is likely to increase this year, said an official from MCIA. Last year, Myanmar corn was demanded a bit from the foreign market. But this year, three countries have enquired Myanmar corn in a single day. True, last year saw Myanmar corn having demand, but it was only a small volume.

This year, Thailand is preparing to buy corn from Myanmar. At the same time, the demand from Viet Nam is on the rise to buy Myanmar corn.
Yearly, Thailand, Viet Nam and Laos are buying Myanmar corn as they do annually have a high requirement of corn in their countries. This year too, these countries are demanding Myanmar corn as in the previous years.
Myanmar annually produces around 3 million tonnes of corn from 607,000 hectares of land.

It is grown in all regions and states but especially in Shan State, and Sagaing and Magway regions. Myawady corn commodity depot has planned to open in the third week of January in 2021. The depot will be opened to ensure fair trade of corn on the Myawady border and for the greater convenience of the trading. This year, the association targeted to export 1.6 million tonnes of corn. Last year, Myanmar exported over 2.2 million tonnes of corn to the foreign market, with an estimated value of over US$360 million, according to the data of the Ministry of Commerce.

Source: The Global New Light of Myanmar

The work coordination meeting regarding gold exports to Japan and appraisal was inaugurated at the One-Stop Service Centre (OSSC) on 5th floor of UMFCCI on 28 January, Yangon Region Gold Entrepreneurs Association (YGEA) stated. At the coordination meeting, Taw Win Myint Company conducted appraisals of the gold and jewellery which are designated for exports to Japan via air freight. The appraisal team assessed 13 gold items including earrings, rings, pendants and other designs at the OSSC. Myanmar’s gold export paused after a change in the payment system, and now it has returned to normal from July 2020.

As per the notification released by the Ministry of Commerce, starting from April, the international remittance for gold purchase has changed from Telegraph Transfer (TT) to Letter of Credit (LC). As a result of this, payment can take about two months, cost banking service changes by two sides, and increase the charges for security matter in transportation. Meanwhile, gold trading in the international market has also come to a stop due to volatile prices. The YGEA have already submitted a request for the resumption of the TT payment system to the Ministry of Commerce. Gold and other pieces of jewellery are primarily purchased by Japan and the ROK, and other tourists also buy them.

Myanmar gave greenlight to gold exports and imports in January 2018, with the aims to eradicate illegal trade, earn revenue for the country and maintain the market’s stability. The local gold market has become sluggish as the pandemic shut down the events like wedding and traditional festivals, gold traders pointed out. As the gold price is fast to spike yet slow to fall in the domestic market, the sellers exceed the buyers in the domestic gold market, traders said. At present, the old gold scrap and jewellery are refined into the pure gold bar. The raw material has not come from gold mining as the transportation restriction halted gold mining. Myanmar’s gold price is related to global rates. The domestic gold price rose to K1,336,000 per tical (0.578 ounces, or 0.016 kilogrammes) on 6 January 2021 when the gold price rallied to US$1,944 per ounce.

On 28 January 2021, the price showed downtick with K1,316,600 per tical while gold price slid into $1,837 per ounce in the global market. The daily transaction of 50 visses (a viss equals 1.6kg) of gold were earlier seen in the market. Now, about 5-10 visses are rarely traded per day, according to YGEA. According to gold traders, the domestic gold was priced with the minimum rate of K1,216,500 (1 July) and the maximum rate of K1,296,500 (27 July). The price moved in the range of, K1,286,500 on 13 August and K1,332,500 on 7 August. The local gold reached the lowest level of 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 1,275,000 (1 December) and 1,333,000 (28 December).

Source: The Global New Light of Myanmar

Myanmar has targeted to export 2 million tonnes of rice in 2020-2021 (Oct/Sept) fiscal year, down from 2.5 million tonnes last fiscal year as summer paddy cultivation drops, said U Ye Min Aung, Chairman of Myanmar Rice Federation (MRF). Weather changes affected irrigation water resource availability on agriculture. The water resource in reservoirs and lakes sharply dropped because of weather changes. Consequently, the decrease in irrigation water availability scaled-down the acreage of summer paddy. Last FY, Myanmar shipped about 2.5 million tonnes of rice to external markets.

This year, Myanmar expect approximately only 2 million tonnes in exports. During Q1 of the present FY (1 October to 31 December 2020), Myanmar exported over 270,000 tonnes of rice via a border and over 370,000 tonnes through sea trade to the foreign markets, totalling about 600,000 tonnes of rice. The country shipped over 800,000 tonnes through maritime trade and over 130,000 tonnes via border to foreign trade partners in the corresponding period of last FY, with an estimated volume of 900,000 tonnes. As a result of this, the figures showed a drop of 300,000 tonnes of rice in exports.

Additionally, the high price in the domestic market and instability of foreign exchange rates are contributing factors to the slump in exports, MRF Chair U Ye Min Aung continued. The main reason why Myanmar’s rice export falls is the price gain in the domestic market and forex trading. A US dollar has pegged at around K1,300 in recent days. The instability in the forex market affects the export sector. That could pose difficulties to the exporters. The federation has also reported this to the government. The instability in the exchange rate is the important factor of the trade balance of the country. It also has direct impacts on all the export sector, including livestock and fishery products beyond agricultural export. 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

The value of Myanmar’s mineral exports has drastically fallen to US$352.6 million as of 15 January in the current financial year 2020-2021 since 1 October, reflecting a tremendous drop of $500.5 million compared to a year-ago period, the Ministry of Commerce’s data indicated. The mineral exports hit 853.13 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. At present, evaluation teams in Kachin, Kayah, Shan, and Kayin states and Sagaing, Taninthayi, and Magway regions are screening mining applications, based on the opinions of the respective departments and the state/regional governments. 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 covering 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 for 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 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

Bangladesh has reopened negotiations with Myanmar to purchase 100,000 tonnes of rice, said the chair of Myanmar Rice Federation (MRF). Bangladesh signed a Memorandum of Understanding with Myanmar for its self-sufficiency of foodstuffs and cooperation in the rice sector in 2017. Myanmar exported 100,000 tonnes of rice to Bangladesh in the 2017-2018 financial year. Later, Bangladesh stopped importing rice from external markets as they do not have staple food. However, Bangladesh’s government called for a tender to purchase rice again to control the market’s rise amid the COVID-19 pandemic.

The two countries’ counterparts are under negotiations for the purchase of 100,000 tonnes of rice. They get back on track, and the negotiations are still underway. It has not reached any agreement yet, the MRF chair affirmed. Myanmar rice’s export price hit a record high in 2020 as the local and foreign demand picked up, MRF stated. Myanmar shipped over 648,158 metric tons of rice and broken rice to foreign trade partners between 1 October and 1 January this FY, generating an income of over US$245.096 million, as per MRF’s data.

Moreover, Myanmar regained rice market shares from certain countries on account of high quality. The price also remarkably increased in November and December 2020. In 2020, the export prices of Myanmar white rice (low quality), broken rice and parboiled rice significantly rose compared to the previous years’ rates. The prices move in the range of US$375-485 per metric ton depending on different varieties. 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 of India and Pakistan’s market prices, MRF’s data indicated.

Source: The Global New Light of Myanmar

The price of Myanmar oil crop peanuts in the Mandalay pulses and beans market is significantly rising due to a sudden spike in demand by China, Mandalay bean traders said. During the previous years, the market used to cool down when Chinese New Year was approaching. This year, they are steadily purchasing the varieties of peanuts and hikes up the price, said the owner of Soe Win Myint depot in Mandalay.

The bean market used to suspend during Chinese New Year. Surprisingly, oil crop peanuts are highly demanded. The price consequently gains on the strong demand. Local millers cannot keep up with Chinese buyers, and so, they are forced to stop running the mills for now. The peanut prices have recently risen, moving in the ranges of K2,200-K3,500 per viss depending on varieties, showing a rise of K200-500 per viss for two weeks.

The price is likely to remain high, the traders guessed. The peanuts from Nay Pyi Taw, Tatkon, Pyinmana, Myinmu and Pakokku areas are abundantly flowing into Mandalay market in the recent days. Mandalay wholesale centre, which has been suspended for four months due to the COVID-19 resurgence, was reopened starting from 21 January 2021, in line with health guidelines on coronavirus issued by the Ministry of Health and Sports.

Source: The Global New Light of Myanmar