November 2020 – Page 2

Import of sesame and raw peanuts threatens domestic prices

Mandalay wholesales of sesame seeds and raw peanuts have raised objections to a company’s application for a permit to import these two products, saying this must not be allowed since it will place downward pressure on domestic prices and impact local farmers. U Chun, Chair of the Mandalay Wholesale Center, met with executive members, merchants dealing in sesame seeds, beans and pulses, and edible oil millers on November 16 to discuss the issue of import and re-export of sesame seeds and raw peanuts on CMP (cut, make, pack) basis by the company in question.

The imports and re-exports under CMP will be tax exempt and prices will therefore, be cheap. Myanmar peanuts are mostly exported to China and with competition from cheap imports, the local prices will drop. If this happens, the farmers will be badly affected. However, should they export to other countries, then there is no problem. Sesame seeds and raw peanuts from China, India, Vietnam and Africa are already cheap, and with no taxes, the prices will be even lower, and hence, capture market share from local producers. Myanmar’s sesame seeds are pricier because of their superior quality, being organically produced with natural fertilizers, with good potential of higher demand and better prices in international markets. The country’s produce is exported to niche markets like Japan and the EU.

Local peanuts have a better taste and prices are 100 Yuan more than peanuts from China, and 200 Yuan more than Indian peanuts. Current prices of sesame seeds have dropped by K20,000 per bag of 45 viss, and peanut prices by K300 per viss, during this week. Such price fluctuations can be damaging for local growers. Past experience has shown how re-exports adversely impact domestic prices. The re-export of sugar had led to a drop in its price from K1400 per viss to K800. Zero taxes for imports, if they are re-exported, makes this option lucrative though it harms local growers’ interests. At this stage it is important to protect local farms and ensure price stability.

Source: Myanmar Times

SMEs will be able to connect to the global manufacturing network

The 15 members of the RCEP will have more business opportunities, and Myanmar’s small and medium enterprises will be able to connect to the global manufacturing network, according to the Ministry of Investment and Foreign Trade. Than Aung Kyaw, Director-General of the Department of Foreign Economic Relations said. The Regional Comprehensive Economic Partnership (RCEP) is for the 10 ASEAN members and its six dialogue partners: China, Japan Korea India It is a free trade agreement between Australia and New Zealand. The agreement, which includes developed countries, will provide better trade and investment opportunities for Myanmar’s exports as it seeks to revive Myanmar’s economy beyond COVID-19.

According to state-run newspapers, the technology and assistance required for the transition to a technology-based digital economy, especially in the post-COVID-19 period, will be available in accordance with the terms of the Economic and Technological Cooperation Chapter of the Convention. The RCEP is comprised of 10 ASEAN member states and six dialogue partners: Australia, China, India, Japan, South Korea and New Zealand are negotiating a Regional Comprehensive Economic Partnership (RCEP) agreement, which began in 2013. RCEP accounts for almost half of the world’s population, accounting for 42.2% of the global economy; It is expected to become one of the world’s largest trade groups, accounting for 29.1 percent of world trade and 32.5 percent of global foreign investment.

According to the Ministry of Investment and Foreign Trade, Myanmar’s participation in the RCEP will increase Myanmar’s exports to a market that accounts for about half of the world’s population with duty-free access. The RCEP is intended to be a more modern, comprehensive, high-quality and mutually beneficial free trade agreement than the current ASEAN Free Trade Agreement. Myanmar’s participation in the Regional Comprehensive Economic Partnership (RCEP) will provide opportunities for Myanmar’s exports to more than half of the world’s population with duty-free access, and the agreement will also increase investment from signatories to Myanmar.

Source: Daily Eleven

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Going Digital Webinar

Date: 22 November 2020 ( Sunday), 10 A.M

Panelists:

U Thaung Tin ( Founder & Chairman, Knowledge Management Dedication (KMD)Co.,Ltd, Vice President, UMFCCI)
Dr. Tun Thura Thet (Founder & CEO Myanmar Information Technology Co. Ltd Vice President Myanmar Computer Federation)
U Aung Kyaw Moe (Founder & Group CEO , 2c2p)

Moderator: Daw Thiri Yadanar Kyaw (Founder & CEO, T Capital Limited
Executive Member, YRYEA)

Contact address: MYEA and YRYEA Facebook Live

Organizer: YRYEA- Yangon Region Young Entrepreneurs Association

Myanmar exports over 160,000 tonnes of rice as of 6 November

THE volume of rice and broken rice exported between 1 October and 6 November in the current financial year 2020-2021 reached 163,413 metric tons, worth over US$60.67 million, according to an announcement from the Myanmar Rice Federation (MRF). Maritime trade constitutes 54.9 per cent of rice exports, generating $33 million from over 89,764 tonnes of rice, while border trade accounts for around 45 per cent of the total rice exports. Rice
exports through the land border have generated an estimated income of $27.55 million from over 73,649 tonnes of rice. Myanmar’s rice is shipped
to 26 foreign countries in October 2020. MRF expected to ship 2.4 million tonnes of rice, and broken rice in the last FY ended 30 September 2020.

The country surpassed the export target, sending over 426,611 metric tons to neighbouring countries through border trade and over 2.15 million tonnes of rice and broken rice to foreign trade partners via maritime trade, totalling over 2.58 million tonnes. A surge in rice export through sea trade was contributed to meeting year’s export target, MRF stated. Myanmar targets to export 4 million tonnes of rice and broken rice in the current financial year 2020-2021, said U Aung Than Oo, vice president of Myanmar Rice Federation (MRF). 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. Yangon gold merchants seek large-scale trading permit around 100 trucks of watermelons and muskmelons could pass through Kyin San Kyawt border checkpoint. The inspection at China’s checkpoint takes longer for drivers beginning from 16 November, and only 50 trucks can enter border crossing. If around 200 watermelon/muskmelon trucks enter the Muse land border, the traffic congestion will worsen.

Muse depot traffic control is monitoring the trucks at its upmost, said the owner of Khwar Nyo Fruit Depot. The prices of watermelon move in the range of 4,500-6,000 Yuan per tonne on 17 November, while muskmelon is priced 4,000-5,800 Yuan per tonne. The COVID-19 resurgence in Myanmar directly affected the border trade, and some truck drivers have tested positive for the coronavirus. As China is tightening the border security to contain the spread of COVID-19, it caused the delay in trade. Earlier, trading was conducted in Muse border. The COVID-19 conditions blocked Chinese traders to come. As China has been stepping up border control measures to contain the spread of the COVID-19, the driver substitution policy has been exercised on Muse, Mang Weing and Kyalgaung border route, said chair of Muse-Namkham Chamber of Commerce. Myanmar exports more than 800,000 tonnes of watermelons and 150,000 tonnes of muskmelons every year. Workers load sacks of rice onto a truck in Yangon.

Source: The Global New Light of Myanmar

Myanmar will strive to implement RCEP trade deal, says State Counsellor

The Regional Comprehensive Economic Partnership (RCEP) agreement will bring investments into Myanmar and create jobs but is expected to heighten competition for small enterprise, business people say. The RECP, the world’s largest free trade agreement, was signed by Myanmar and 14 other Asia-Pacific countries on Sunday. It covers the 10 member states of the Association of Southeast Asian Nations (ASEAN), of which Myanmar is part of, as well as the People’s Republic of China, Japan, South Korea, Australia and New Zealand. The deal represents around 30 percent of the world’s population, 30pc of global GDP and about 28pc of international trade.

Myanmar will try its best to implement the RECP provisions, said State Counsellor Daw Aung San Suu Kyi. U Than Aung Kyaw, director genereal of Foreign Economic Relations Department, said the RECP will play a key role in establishing free trade areas and will boost reforms in e-commerce, government procurement and intellectual property rights. The Union of Myanmar Federation of Chambers of Commerce and Industry’s (UMFCCI) vice president U Maung Maung Lay said the deal will bring about more attractive tax rates for businesses, benefit consumers and pave the way for globalization. Living standards will improve and there will be more competitive measures. It will reduce corruption and create more job opportunity. There will be a better supply chain and prices of products will be cheaper for high import volume. Myanmar needs to support small enterprises to develop and become more competitive, or else outside players will dominate the local market.

Myanmar’s manufacturing capacity and worker skills need to improve and have a good environment. Get rid of red tapes and welcome businesses with red carpet. The RECP programme could also be a timely remedy to support Myanmar’s recovery from the COVID-19 shock next year, facilitating trade and investments. The economics shock from COVID-19 has dealt a heavy blow to an already difficult situation for tourism, food and beverage and retail businesses, which had been hit by lower tourist arrivals caused by the northern Rakhine crisis. But foreign investment approvals in the fiscal year ending September 30 recorded the highest amount over the past five years.

Producers in Myanmar will also have access to bigger markets under the RCEP deal. But the business environment and e-services need to catch up. The government’s special car import licenses for officials, announced in September, has come under attack by business groups and opposition politicians for undermining Myanmar’s FDI environment and hurting automotive investors. According to the RCEP, Cambodia, Laos and Myanmar will enjoy special arrangements regarding tax and customs reductions. Member countries covered by RCEP will have to reduce 65pc of customs for all goods, but the three frontier economies will only need to lower 30pc. After 10 years, the other countries will have to reduce customs taxes to 80pc in total but it will only apply to Myanmar in 15 years’ time.

Source: Myanmar Times

UK opens door to Myanmar avocado

MYANMAR has successfully delivered avocado to the UK’s market on trial, according to the press statement issued by the Embassy of the Republic of the Union of Myanmar in London on 14 November. Amara Variety (local variety), Hass and Buccaneer varieties were placed on the UK’s market in the previous week, under the programme of Myanmar Fruit, Flower and Vegetable Producers and Exporters Association (MFVP). Freshpro Imports Limited distributed them through the wholesalers of London and Sheffield cities. It has earned good reviews from the consumers. Myanmar Embassy in London has been exploring the markets for potential Myanmar products in the UK in line with the government’s policy, especially prioritizing the agricultural products and new local products. Additionally, Myanmar Embassy, in coordination with the British Chamber of Commerce, will hold a webinar on 19 November for Myanmar exporters regarding the agricultural exports to the UK.

Myanmar is exporting the avocado to China and Thailand through the land border. However, there is no guarantee, and the price is relatively low. Therefore, official trade pacts with China and Thailand are required for Myanmar’s avocado exports, said U Lin Thant Aung, secretary of MFVP. Furthermore, he suggested that the government form a committee including all the stakeholders such as the growers, processors, exporters in the supply chain, intending to facilitate the trading. He also made a further request for the high government officials to suggest Myanmar’s avocado during their foreign visits. Myanmar currently exports 5,000-10,000 tonnes of local avocado varieties to Thailand and China through the land border. Those varieties fetch between K800 and K1,000 per kg, MFVP stated. Meanwhile, around 3,000 tonnes are yearly sold in the domestic market. The demand is high when there is an increase in tourist arrivals. The avocado is primarily grown in Chin Hills, Shan highland, Nawnghkio and PyinOoLwin areas, having around 25,000 acres.

There are thousands of Myanmar avocado varieties, and the avocado of foreign origins are also found. Myanmar’s avocado is abundant in October and the harvest season extends up to April. Myanmar prioritizes the fruit quality that meets international market standards for market potentials. Efforts are being undertaken to legally export Myanmar’s avocado to more foreign UK opens door to Myanmar avocado. A woman grower is picking Myanmar avocado. The peanut from India is about US$100 cheaper than those in China. Furthermore, as it will be produced on a CMP basis, the tax exemption is also requested. Myanmar grants tax-exempt on raw material import if the goods are exported with a few exceptions. Myanmar’s peanut is priced K3,200 per viss (a viss equals to 1.6 kg), while the peanuts from China fetches K2,400 per viss. Myanmar’s peanut is of high quality with the use of natural fertilizer. Myanmar peanuts are offered 200 Yuan higher than those produced in China.

The import news drove the price cool, and the buyers are closely
observing the market. Myanmar shipped over 150,000 tonnes of sesame in the previous financial year 2019-2020, generating an export value of US$240 million, the Commerce Ministry’s data showed. Typically, Myanmar exports about 80 per cent of sesame production to foreign markets. China is the primary buyer of Myanmar sesame, which is also shipped to markets in Japan, South Korea, China (Taipei), UK, Germany, the Netherlands, Greece, and Poland among the EU countries. The EU markets prefer organic-farming sesame seeds from Myanmar, said an official from the Trade Promotion Department. Japan prefers Myanmar black sesame seeds, cultivated under good agricultural practices (GAP), and purchases them after a quality assessment. Black sesame seeds from Myanmar are also exported to South Korea and Japan. Meanwhile, China buys various coloured sesame seeds from the country. This year, Japan has not purchased Myanmar’s sesame yet. For the current budget year 2020-2021, Myanmar traders target to export over 130,000 tonnes to foreign partners, traders from Mandalay market said. Sesame is cultivated in the country throughout the year. Magway Region, which has gained a reputation as the oil pot of Myanmar, is the leading producer of sesame seeds. The seeds are also grown in Mandalay and Sagaing regions. Of the cooking oil crops grown in Myanmar, the acreage under sesame is the highest, accounting for 51.3 per cent of the overall oil crop plantation. The volume of sesame exports was registered at over 96,000 metric tons, worth $130 million, in the financial year 2015-2016; 100,000 tonnes, worth $145 million, in the 2016-2017FY; 120,000 tonnes, worth $147 million, in the 2017-2018FY; 33,900 tonnes valued $43.8 million in the 2018 mini-budget period, and 125,800 tonnes, worth $212.5 million in the 2018-2019FY, the trade data of Central Statistical Organization indicated markets in 2023. Myanmar Avocado Producers and Exporters Association was established in 2018, with 800 members.

Source: The Global New Night of Myanmar

China forecast to be top Myanmar investor this fiscal year: UMFCCI

With the bulk of Chinese capital invested in the infrastructure sector, China is likely to be the top foreign investor in Myanmar in fiscal 2020-21, according to the Union of Myanmar Federation of Chamber of Commerce and Industries (UMFCCI). Investments are also likely to come from China as the country has already started to recover from COVID-19.

Myanmar can expect Chinese funds to flow into strategic infrastructure projects that support its Belt and Road Initiative. China invested over US%3.47 billion in 375 businesses in Myanmar since fiscal 2016-17, according to the Directorate of Investment and Company Administration (DICA). Besides China, another potential investor is likely to be the US.

The US appears keen to accelerate its investments in Myanmar and it could seek to offset some of China’s current projects in the country beyond COVID-19. The US may increase its investments in energy, telecommunications, tourism, and natural gas production sectors. Myanmar is targeting US$5.8 billion in foreign investments in 2020-21 and US$ 8.5 billion in 2021-22. It is aiming to promote and draw investments into the agriculture, fisheries, industrial and technology sectors this year.

Source: Myanmar Times

DHL Express raises investment in Asia as e-commerce expands

DHL Express will spend close to EUR 750 million to expand its global infrastructure and network over the next two years, the company said this month. Around EUR 60 million to expand its air network in Asia Pacific by introducing new direct flight routes connecting its logistics hubs in the region to Yangon and Vientiane in Laos. DHL Express said it expects shipment volumes in Asia Pacific to be 30percent-40pc larger than last year’s peak season, which typically starts around November and lasts until the Lunar New Year.

Ken Lee, CEO of DHL Express Asia Pacific, said the investment are “crucial” as the company is anticipating an “usually strong peak season.” The expanded infrastructure and new flight routes across Asia Pacific will also position the company to benefit from a growing e-commerce market and cross- border trade in the longer run, he said. Since the start of 2020, DHL Express has experienced a 50 pc surge in e-commerce shipments in Asia Pacific (excluding China), the company said. DHL Express will invest EUR 25 million to build a new facility in Bangladesh that will combine its country office and service center into a 10,000 sqm site.

The new facility will bring about an approximate 35pc increase in shipment processing capacity, and is expected to be opened in 2022. Meanwhile, the company will triple its capacity in Malaysia, with a new EUR39.4 million facility enabling it to increase its processing capacity by more than 200pc in the region. This, too, is scheduled to be completed by 2022. At the same time, construction of a new gateway facility in Bangalore, India is underway, slated to be ready by 2021. The company will also build new facilities in Australia, Japan, Hong Kong, South Korea countries and new airline networks will be expanded to Beijing and Yangon.

Source: Myanmar Times

Muse trade dives by $353 mln amid COVID-19 resurgence

The value of Myanmar-China border trade through Muse land border plunged to US$264.46 million over the first months of the current financial year 2020-2021 owing to the impacts caused by the COVID-19 resurgence. The figures reflect a decrease of $353.5 million compared to the corresponding period of the previous budget year, according to the Ministry of Commerce. Exports through Muse border were worth $126.136 million, while imports were valued at $138.32 million between 1 October and 6 November 2020. During a-year ago period, Muse border post witnessed trade worth $617.976 million.

Muse border checkpoint is an essential one in Myanmar and handles an enormous volume of trade. But at times, it has experienced a sharp drop in business on account of China clamping down on illegal goods, resulting in a halt in trading of agricultural products. Moreover, the COVID-19 impacts slow the trade this year. Following the COVID-19 consequences, trading via Muse did not reach a monthly target of above $400 million in the previous months this year. Myanmar intended to reach the trade target of over $5 billion through Muse for the last FY. However, only $4.8 billion worth goods were traded. Border trade values at Muse stood at $5.4 billion in the 2016-2017FY, $5.8 billion in the 2017-2018FY and $4.9 billion in the 2018-2019FY respectively, as per data of the Commerce’s Ministry. At present, China has been stepping up border control measures to contain the spread of the Covid-19. Therefore, Chinese buyers do not come to Myanmar border crossings in light of COVID-19 fears, forcing Myanmar truck drivers to leave for Wanding area to sell the goods.

Following the detection of COVID-19 cases in Ruili (Shweli), China shut down its Customs office from 15 September, and it was reopened on 22 September, said U Min Thein, vice-president of Muse rice depot. On 9 November, some people tested positive for COVID-19 were found. The traders are worried about the possible lockdown and the closure of crucial Customs office in China like before. The trading is still open for now. Yet, the temporary trade suspension will harm the traders a lot during the meantime, the traders stressed. Myanmar exports agricultural products, including rice, beans and corns, and fishery products such as crab, prawn, etc. Furthermore, Myanmar’s natural gas export to China is also conducted through Muse-Ruili border. The raw CMP materials, electrical appliance and consumer goods are imported into the country.

Source- The Global New light of Myanmar