Newsflash update Myanmar, June 2020: ''Hopes and Challenges''
Myanmar has been relaxing its in-country restrictions step by step except for the fact that the international travel and entry ban is still in effect, now extended until 31 July without clear prospects or conditions set for re-opening soon. Since April however the re-opening of essential businesses, later followed by a gradual reopening of factories, markets, and shops is encouraging for the domestic economy.
In May, Myanmar domestic airlines have resumed their operations to major local destinations. The reopening of all these business operations require to strictly follow the Covid-19 prevention guidelines instructed by the Ministry of Health and Sports, see the reference article. The State and private schools (high school level first) are now set to reopen in late July.
In this newsflash some more detailed highlights and back-ground information is given on the trade statistics of 2019-2020 fiscal year as well as the current export situation of Myanmar agricultural products.
Agriculture Ministry’s action plans
On 25 May the Ministry of Agriculture Livestock and Irrigation (MoALI) published the overall ministry’s plans in response to Myanmar Covid-19 Economic Relief Plan (CERP) goal 2, action point 2.1.7 ‘Support to Farmers, Small Agri-Processors, Seed Farmers and Agri Business for Planting and Income Retention’. All in all 7 departments under MoALI are responsible to oversee the rollout of the action plans; Department of Agriculture, Department of Rural Development, Livestock Breeding and Veterinary Department, Department of Fisheries, Irrigation and Water Utilization Management Department, Agricultural Mechanization Department and Cooperative Department.
In the meantime the launch of a Cash-for-Work program (funding MMK 25 billion) in exchange for work done on various projects in infrastructure and other sectors is underway according to the Department of Rural Development. The program is targeted to cover 2’500 villages across the country, priority will be given to the townships with a higher number of returnees from the overseas and the villages with a high number of smallholder farmers who demonstrate the potential for agriculture, livestock and aquaculture businesses. The project period is planned from June to September 2020. In addition to a Cash-for-Work program, the Department of Rural Development has also launched a Cash-for-Lending Support program. The distribution of loans aims to support 1’700 villages, the total amount of funding MMK 41 billion. For further details see the news article.
Highlights on the agricultural products export
There is an increase in the export value of Myanmar’s agricultural products regardless of the ongoing Covid-19 impacts. In the current fiscal year 1 Oct 2019- 12 June 2020, the country earns $2.9 billion from the overall agricultural products export whereas the value has increased $466.342 million compared to the last fiscal year.
Rice: The export of Myanmar rice has also increased due to the seemingly growing demand from the foreign countries. Within the current fiscal year, Myanmar made shipment of rice to a total 65 foreign markets value worth over $591 million. The Ministry of Commerce, MoC recently confirmed that countries such as Malaysia, Indonesia and the Philippines express their interest to import rice from Myanmar.
Aquaculture: Until recently the aquaculture sector is on the country most vulnerable sectors to the Covid 19 crisis. Statistics released by the MoC indicates that the fisheries industry is also recovering from almost a complete halt in seadfood and marine export. In this fiscal year, Myanmar earns $670.13 million from the fishery exports which is an increase in value amount of $100 million.
Fruits: The demand is reportedly getting high for the good quality Myanmar bananas and mangoes. The Myanmar Mangoes Association said that Myanmar is planning for the semi-processed mangoes export on a trial basis to Malaysia. To be able to better penetrate the international markets the Myanmar Fruit Flower and Vegetable Producers and Exporters Association and its sub-clusters such as the mango, pineapple associations pinpoint the pressing needs and support to be given by the Government; capacity building for value-added production and manufacturing, more linkage with the exporters and more legitimate border trade channels.
Beans, pulses: The Myanmar Pulses and Sesame Seeds Merchants Association claims the industry is not badly affected by the crisis. The export outlook for beans, pulses in particular is promising. Myanmar is the major supplier of beans to India and for the 2020-2021 fiscal year, Myanmar is expected to export more beans, pulses in line with the quota notification announced by the Department of Commerce, India. For further sector information, see the interview article of the Chairman of the Myanmar Pulses and Sesame Seeds Merchants Association.
Border Trade: The overall border trade values of Myanmar has increased and reached over $7.87 billion for 2019-2020 fiscal year. Nevertheless, the export earnings via border trade shows a decrease of $17.9 million compared to the last fiscal year. Border trade challenges according to the Myanmar fruit traders and growers are; the decline in exports, transport delay and the lack of proper storage facilities. The transport restriction placed by the two neighboring countries had clearly hit hard on the trade flow at the borders in early April-May, especially on the export of Myanmar watermelons and cucumbers to China. The situation seems to improve as more legitimate checkpoints are now open at the Myanmar-China border.
Online application platform
From 1 April 2020 onward, the online application platform for the export and import business license is made available by the Ministry of Commerce (MoC). More than 700 types of export, import items are applicable for an online application system. The list includes the agricultural products, food, oil, milk and dairy products. The Department of Trade under MoC reportedly issued 7,433 import export licenses value worth of US12 billion during the period April-May 2020. The preparation process to develop Myanmar e-Commerce guidelines is ongoing and it is expect to be finalized by the end of this year.
The medium term outlook for the overall Myanmar’s economy according to the World Bank’s latest Economic Monitor is positive with the expected recovery in 2020-2021. However, the World Bank indicates that the combined impacts of the slowing global and local economic growth could result in the rise of the poverty rate of Myanmar until at least year 2022-2023. See the official page of the World Bank Myanmar for more details on the report 'Myanmar Economic Monitor June 2020'.