Thursday, September 21, 2017

Muse offensive closes border trading

An outbreak of fighting in northern Shan State has closed the 105 Mile border trade zone at Muse – Myanmar’s main overland route for many exports – leaving traders worried about the economic fallout.

A line of trucks make their way from Lasho to Muse in January. Photo: Aung Myin Ye Zaw / The Myanmar TimesA line of trucks make their way from Lasho to Muse in January. Photo: Aung Myin Ye Zaw / The Myanmar Times

Over 1000 trucks and around US$10 million worth of goods typically pass through the zone every day, according to the Ministry of Commerce. So far this year more than US$3.8 billion has been exported to China and more than US$1.5 billion imported according to ministry data.

But an offensive that began in Kutkai and Muse townships has brought trade to a standstill. The fighting started on November 20 when an alliance made up of soldiers from the Ta’ang National Liberation Army, the Kachin Independence Army, the Myanmar National Democratic Alliance Army and the Arakan Army launched an attack on military and police targets.

The “Mining of bridges and attacks on border outposts by these armed groups also cut-off [the] flow of trade, transport and communication [that is] determinately affecting the socio-economic lives of [the] civilian population in the area,” said Daw Aung Su Kyi as chair of the National Reconciliation and Peace Centre in a statement yesterday.

“Traders dare not come to the trading zone [now] because of the fighting,” said U Khin Maung Lwin, assistant secretary from Ministry of Commerce on November 22. “People’s daily incomes have been hit.”

U Ming Aung, government representative and assistant director for the Shan State border points, said it would take between 10 and 14 days for conditions to return to normal.

“Bridges have been destroyed and that makes it difficult for goods to reach Muse,” he said. “It will take time.”

Some exporters have switched to other export routes. U Taing Kyaw, an eel exporter, said that he was now using Chin Shwe Haw route in northern Shan State rather than Muse. But he and exporters of crab and frozen fish had lost between one-third and one-half of their typical profits, he said.

One rice merchant said he was using the Bhamo route in Kachin State, and had not “suffered much” although prices there were lower.

U Khin Maung Lwin noted that Muse traders moving to other routes like Chin Shwe faced difficulties, including a lack of familiar trade connections.

“The [Muse] trade may stop [for a while] because of the raid,” said U Soe Tun, deputy chair of the Myanmar Rice Federation. “It doesn’t matter if it’s stopped for a short time, but we will be affected if the route is closed for a long time. Many exporters and importers use that route, and the nation’s economy could be affected.”

The 105 Mile trading zone is the main trading route to China, which in turn is Myanmar’s main export destination for rice and an array of other agricultural products. Myanmar exports rice, maize, beans, eel, shrimp, crab, fruits and flowers to China, while construction materials are among the main imports.

U Tun Aye, chair of Myanmar Marine Products Exporters Association, said his industry was heavily reliant on China and that the local market would disappear if the trading are remain closed.

“Eels and crab exports cannot be stored they are sold instantly,” he said. “Local fish prices will fall as produce can’t be exported.”

U Kyaw Sein, a trader from Muse, said that farmers would face difficulties if trading area remained closed given the high volume of agricultural products exported to China.

Sugar trader U Win Htay noted that wholesalers are often able to hold stock until a situation changes. Because farmers cannot afford to hold off on selling their harvest they are worse affected, he said.

U San Tun Lwin, a trader from Mandalay Region, said that local prices for crops were already falling because the key export route to China was closed.

Ko Naing Linn Htet, a watermelon grower from Bago Region, said that as far as he had heard Myanmar watermelon that had reached China was still selling well. Even if the cost of transporting watermelon to Muse rose from K80,000 per tonne to K100,000 it would be worth trying to continue exports, he added.

“But I can’t find a driver who dares to go to Muse for that price,” he said.

Those exporting non-perishable goods are in a better position.

“It doesn’t matter for me because I trade dry goods,” said one trader in the 105 Mile zone on November 22, but added that even those exporters are paying truck drivers by the day.

“Our goods have not been exported yet, and we have four trucks loaded with goods. Delays cost money,” he said.

Translation by San Layy, Khine Thazin Han, Win Thaw Tar and Emoon