Sesame prices possibly remain higher amidst China’s strong demand

The prices of sesame seeds are expected to remain higher on the back of strong demand from China even when the fresh sesame will be harvested in September. The prevailing price of sesame is pegged at K160,000-210,000 per bag depending on quality. The price significantly rose as against that in early July. The price is likely to fluctuate around K200,000 per bag during the harvest time. As the sesame stockpile is thin, there is no way of the price drop in the coming weeks. This year, high sesame producing regions of Myanmar (Magway, Mandalay and Sagaing regions) experienced low yield due to drought impacts. During the meantime, China high demand hiked the prices.

Myanmar increasingly sends sesame seeds to China market. The price fluctuates a bit. The gradual increase in sesame prices since last week of July has been attributed to high demand by China when the drought reduced crop yield in the country. The various varieties of sesame are priced good, especially black and white sesame varieties. Myanmar exports 90 per cent of sesame production to foreign markets. China is the leading 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. 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 colored sesame seeds from the country.

The number of sesame acreages has increased in the country. Sesame is cultivated in the country throughout the year. Magway Region, which has gained a reputation as the oil pot of Myanmar, is the primary 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 tonnes, worth $130 million, in the 2015-2016 financial years, 100,000 tonnes, worth $145 million, in 2016-2017FY; and, 120,000 tonnes, worth $147 million, in 2017-2018FY.

Source: The Global New Light of Myanmar

Pressure eases on Myanmar inflation due to declining consumer demand

Declining consumer spending and demand as a result of COVID-19 has suppressed inflation levels in Myanmar. Inflationary pressure first showed signs of easing in March, after the first cases of the coronavirus were reported in Myanmar. Inflation has continued to decline over the past three months, settling at 7.9 percent in June. The trend of falling inflation is similar to the rest of the world. Consumers all over the world and in Myanmar are spending less due to COVID-19 restrictions. Domestic consumer demand is falling and this is resulting in softer inflation.

Inflation in Myanmar had in fact been on a steady rise before the pandemic. Local businesses have suffered as a result of poor consumer demand. Due to COVID-19, the majority of Myanmar firms have experienced lower sales and cash flow shortages, resulting in reduced access to credit needed to support operations. The survey also revealed that 16 percent of firms had temporarily closed their operations for an average of eight weeks as a results of COVID-19.

As a result, Myanmar’s inflation is forecast to fall further this year and remain at around 6pc until next year. Meanwhile, GDP growth is forecast to drop from 6.8 pc in fiscal 2018-19 to just 1.8pc in the current fiscal year. The World Bank’s forecasts are more dire, with GDP expected to slump to just 0.5pc last year. However, if the domestic spread of the coronavirus is brought under control and the global economy recovers swiftly, GDP could recover as soon as next year, reaching 6pc according to ADB and 7.2pc according to the World Bank.

Source: Myanmar Times

Domestic gold price hits new record high amidst global price hike

With the record high global gold price, the domestic gold price also hit a new record on 7 August with K1,332,500 per tical, according to the domestic gold market. Although the domestic gold price was a record high at K1,307,000 per tical (0.578 ounces, or 0.016 kilograms) on 5 September 2019, the gold price is a new record high again. While the domestic gold price was highly recorded at K1,300,000 per tical on 5 September 2019, the price of the global gold price has only risen to $1,550 per tical. With the rising of the global gold price, the global gold market saw the gold being sold for $20,000 per ounce on 5 August and the price continued to hike and hit a new record high at $2,062 per ounce on 7 August.

With the rising of the global gold price, the domestic one also hit the new record. The dollar versus the kyat exchange rate was K1,373 per dollar on 7 August. At present, there is a high demand for gold in the local market, according to a domestic gold trader.
With the slightly rising of domestic gold price together with the global gold price starting from 2019, the local gold price reached K1,000,000 per tical between 17 January and 21 February, K1,100,000 between 22 June and 5 August, K1,200,000 between 7 August and 4 September and, then reached an all-time high of K1,300,000 on 5 September 2019.

In April, the coronavirus risks caused the shutdown of the gold market, and the market reopened on 18 May with a minimum rate of K1,214,100 (27 May) and a maximum rate of K1,236,000 (18 May). The price was moving in the range of K1,209,600 on 6 June and K1,219,500 on 1 June. The local gold reached the lowest level of K1,216,500 (1 July) and the highest level of K1,296,500 (27 July), according to the gold traders.

Source : The Global New Light of Myanmar

MIC approve multi-million dollar industrial park in Hlegu

The Myanmar Investment Commission(MIC) on July 31 approved the US$230.6 million Hlegu Industrial Park, which will be developed by Singapore’s Sembcorp Industries. The project, set to cover some 1487 acres in Hlegu township,Yangon, was signed between Sembcorp CSSD Myanmar Co and local partners City Mart Holding Co Ltd (CMHL), and Myanmar Agribusiness Public Corp( MAPCO) in July 2019.Sembcorp is expected to hold a 67 percent stake in the project, while City Mart Holding and MAPCO will hold 18pc and 15pc, respectively.

The industrial park has already approved by the Yangon Region Assembly and will focus on food-based industries.Despite having received MIC approval though, the development will likely be delayed due to COVID-19 restrictions. The investors had been expecting MIC approval in January and construction to commence in March, but things were delayed by COVID-19. Once completed, the industrial park will feature an access road to Thilawa Port via the Yangon-Mandalay Road so that goods produced in Hlegu can easily be exported and also reach parts of the Myanmar hinterland.

Better known for building the US$310 million Sembcorp Myingyan Independent Power Plant in Mandalay, Sembcorp is not new to industrial development, having partnered with countries like China, Indonesia and Vietnam to create integrated townships and industrial parks. The Hlegu Industrial Park was one of seven new projects valued at US$462.7 million in total and with the potential to generate more than 3600 jobs. The other major new investment involves a US$180 million shopping mall from AEON Japan. Singapore, China and Thailand are the top investors in Myanmar this fiscal year, More than half the capital was channeled into the power and oil and gas sectors, while 15pc was channeled into manufacturing.

Source: Myanmar Times

Govt reveals plans to build new SEZ in Mon State

A new Special Economic Zone(SEZ) will be implemented in Mon State, connecting Myanmar with the Mekong Subregion East-West Economic Corridor, government officials said at a Myanmar-Japan Investment Forum on July 29. The SEZ in western Yangon aims to connect with Danang, Vietnam, and will be the largest SEZ in Myanmar if approved. It is expected to cost US$ 117 million to develop and take at least five years to complete.

The criteria for the project includes easy connectivity with countries involved in the economic corridor, being able to construct a deep-sea port and connectivity to Thilawa SEZ via a local transport network. To choose a strategic location, feasibility studies will be conducted and a Master Plan will be drafted with help from an international advisory team. Developers will be selected transparently based on a tender system.

The aim of connecting the Mon State SEZ with Thilawa is for the two areas to operate as a single industrial zone with global standards of transparency and quality.The project includes enhancing urban management capabilities to develop Mawlamyine in Mon State and Hpan-an and Myawady in Kayin State.

Source: Myanmar Times

Myanmar Sharpens focus on helping local MSMEs amid COVID-19

Owners of local Micro, Small and Medium Enterprises (MSMEs) have voiced satisfaction over the government’s interest in the sector after U Ye Min Oo, Yangon Minister for Planning and Finance and Chair of the Region MSME Development Agency met with local MSME owners on July 28. This is the first time their association has met personally with the government. They are officially registered but they have never met with State-level authorities. From the meeting, they learned that the government is increasing its focus on supporting local MSMEs.

MSMEs in Myanmar play a vital role in job creation, innovation, development, poverty alleviation and human resource development, and they could provide opportunities for advanced technologies to enter and a good business and investment environment. The government on July 18 also announced a new K100 billion loan fund targeted at business in agriculture and livestock affected by the global pandemic. The fund will be given out to agriculture and livestock businesses, export/import, manufacturing, supply chain, F&B, foreign job agencies and vocational schools.

The CERP was first announced on April 27 to mitigate the negative impact of COVID-19 on the economy with the first K100 billion fund prioritizing on the most affected sectors sectors such as garment manufacturing, hotels and tourism, and small businesses. The government has since amassed additional funds to help businesses in other sectors. Livestock business felt the effect as a result of travel restrictions,however as the government is relaxing the rules, these businesses are operating again and require support. On top of giving out loans to businesses affected by COVID-19, business expansion loans should be given out as well.

Source: Myanmar Times

Three Japanese companies, Eden Group given green light to build gas power plant at Thilawa

Myanmar’s government has given written approval to three Japanese trading companies and local conglomerate Eden Group to build a liquefied natural gas power plant at Thilawa in Yangon Region, according to news releases from Nikkei Asian Review and the Ministry of Electricity and Energy. It will be a government-to-government project and a notice to proceed ceremony took place on July 24. 

According to Nikkei Asian Review, the project valued at from US$1.5 billion to 2 billion will generate 1,250 megawatts of electricity. It is one of the largest projects in Southeast Asia. The three Japanese trading companies are Marubeni, Sumitomo Corp., and Mitsui & Co. The notice to proceed had been issued and electricity would be generated in 72 months. The project would create a milestone in strengthening the relationships between the governments of Myanmar and Japan.

Japan’s leading investment in Thilawa Special Economic Zone was also crucial.They expressed thanks to the Japanese companies for their trustful investment as well as to the Japanese government for providing necessary financial assistance. The ministry announced that 50 percent of the whole country had access to electricity in December 2019.

Source: Eleven media

ADB sees progress in resuming aid to Myanmar - Business Recorder

Myanmar approves ADB loan, outstanding debt hits K40.8 trillion in 2018-19

 

ADB sees progress in resuming aid to Myanmar - Business RecorderMyanmar’s outstanding local and foreign debt stood at K40.8 trillion at the end of September 2019, which is close to 40 percent to GDP. Around 63pc of the country’s debt was incurred locally. The largest share of the foreign loans were allocated to the Ministry of Construction and Ministry of Electricity and Energy. Debt levels are expected to rise further this year, with the government borrowing heavily from international institution like the World Bank and IMF to fund national projects as well as its COVID-19 Economic Response Project.

On July 27, Pyidaungsu Hluttaw approved borrowing $171.3 million from Asian Development Bank to fund rural electrification projects in Kayin State as well as Ayeyarwady, Bago and Magwe regions. It is expected to benefit 2815 villages with 400300 hosueholds. The project will generate 160 million-290 million of units of electricity a year. The government will invest $20.5 million in the project from its budget, taking total investments to $191.7 million. The project is expected to be complete by 2027.

When the project is complete, the country will receive between $15 million and $25 million in tariffs from electricity users. The loan is for 32 years, inclusive of eight year grace period during which interest will changed at 1pc. For the remaining 24 years, the interest rate will be 1.5 pc. The economic internal rate of return is estimated to be 15pc, so this can support paying off the loan.

Source: Myanmar Times

Myanmar imports over $890 mln worth iron/steel materials in Oct-May

The value of Myanmar’s iron and steel imports for the construction sector is valued over US$893.8 million in eight months of the current fiscal year 2019-2020. Additionally, $386 million worth iron and steel products are also imported during October-May period. At present, Myanmar’s steel demand is estimated about 2.5 million tonnes per year, and 92 per cent of which are imported. The demand is likely to grow up to 5.4 million tonnes per year in 2030. If Myanmar can fulfil the requirements of local steel consumption and focus on import substitution, the steel industry will strategically contribute to the nation’s interest.

Steel consumption includes in calculating economy growth index. 11 executive members of MSA established MSA Public Company Limited and they are making efforts to set up iron and steel industrial zone, to reduce the outflow of US dollar, effectuating the development of steel industry and assisting in the country’s infrastructure building. Studies for implementation of iron and steel industrial zone project are underway in Ayeyawady and Taninthayi regions and Rakhine and Mon states. The project is slated to commence within three to five year after completing studies, he continued. The government needs to support the steel sector by granting tax relief and land rights, controlling illegal import, making anti-dumping law come into the effort and formulating steel policy, according to the MSA.

Steel industry is pivotal in industrial infrastructure building. This project needs to be implemented for prospects of the country’s economy. The MSA will move forward to the development of industry standards which are compatible with the country and the emergence of steel library and steel laboratory. The association will cooperate with the international organizations to grow the steel sector, he added. China is the main supplier for Myanmar’s steel market. Iron and steel are also imported from India and the Republic of Korea. 

Source- The Global New light of Myanmar

Myanmar govt plans to purchase more reserve rice

The government is planning to purchase an additional 20,000 tonnes of rice for its reserves. The government first announced that it would be purchasing 50,000 tonnes of rice from local farmers for reserve purposes earlier this year, when COVID-19 was first detected in Myanmar. It has so far successfully stored away 85 percent of that quota.

The rice was procured from 12 export companies and stored at nine warehouses from April 30 to June 12. A total of 40,000 tonnes was purchased from Yangon, more than 30,000 tonnes from Mandalay and 1000 tonnes from Nay Pyi Taw.

Due to the outbreak of COVID-19, Myanmar will export a maximum of 2.5 million tonnes of rice in fiscal 2019-20. It purchased up to K38 billion worth of the remaining volumes of rice from local traders, and expects to buy up to 10pc of total export volumes for reserve purposes.

Source: Myanmar Times