Sunday, August 20, 2017

Government targets trade worth US$29 billion in 2017 – 18

Trade volumes amounting to US$29 billion have been targeted for 2017-18, with US$14 billion from exports, and US$15 billion from imports, said U Khin Maung Lwin, assistant secretary from the Ministry of Commerce.

Workers moving goods at the Yangon Port. Poor port productivity is one reason why trade target may not be achieved. Photo - EPAWorkers moving goods at the Yangon Port. Poor port productivity is one reason why trade target may not be achieved. Photo - EPA

Acknowledging that imports are expected to exceed exports for the year, U Khin Maung Lwin said more focus will be placed on improving exports in the coming months. “If we compare exports with the previous year, then it is increasing. Although exports of natural gas have declined, private sector exports like rice, corn and beans are climbing up,” he said.

Meanwhile, the garment and fishery sectors are also great export potential. “I think we can reach the target,” U Khin Maung Lwin said.

Garment exports have risen 30pc per year since 2012, said U Myint Soe, chair of the Myanmar Garment Manufacturers Association. Last year, garment exports hit a total value US$2.2 billion.

Skepticism abounds

Still, skepticism abounds over the country’s ability to reach that target. Last year, the Ministry of Commerce anticipated trade worth a total US$31 billion, but due to declining import volumes and temporary closures of several border trading zones, trade volumes totaled just US$29.2 billion.

Things aren’t looking great so far this year. Up until June, total trade volumes amounted to just over US$7.78 billion, with US$3.16 billion from exports and the remaining from imports.

Port constraints

Local entrepreneur Dr Soe Tun reckons one reason is poor productivity at Myanmar’s ports. Even as the country’s shipping sector has expanded to meet rising trade volumes, its ports have so far failed to keep up to speed.

Last year, 850 ships handling over 1 million 20-foot containers called at Myanmar’s ports, compared to 604 ships handling some 380,000 20-foot containers in 2011. That’s a 41pc rise in the number of ships and a 160pc rise in container throughput over the 5-year period.

But growth has slowed in recent years as the ports reach their limits. In 2015, 850 ships handling just over 827,000 20-foot containers called at the country’s ports, which is about the same level as 2016.

“During the last fiscal year, rice was exported to 53 countries. About 40pc of the rice exported was moved by ship. In the past, just 20pc of rice exports was moved by ship,” Dr. Soe Tun said. “Our ports cannot do that much to keep up with higher rice exports.”

Declining produce

Meanwhile, sugar exports, which hit 3 million tonnes last year, is now declining due to lower demand in China, while corn exports have also fallen. Foreign demand for green mung beans produced locally has also fallen, with the price per tonne of beans now down to just US$480 per tonne compared to US$1400 per tonne in the past.

Based on those numbers, reaching the anticipated target seems unlikely.”It’s not going to be easy to reach the targeted amount this year. Rice can only bring in US$600 million annually, or 5pc of total exports. Trying to get more than that is not easy,” said Dr Soe Tun, who is also vice chair of the Myanmar Rice Federation.

Translation by Kyaw Soe Htet