What to expect from Myanmar’s top five export sectors

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What to expect from Myanmar’s top five export sectors

Myanmar Times, 13 Nov 2018

URL: https://www.mmtimes.com/news/what-expect-myanmars-top-five-export-sectors.html
Based on recent interviews with government officials and businesses, here are the recent developments and what to expect in the coming year from the country’s top five export sectors:
Manufacturing potential

The manufacturing industry has helped to narrow the gap between imports and exports for Myanmar in recent years. The garment industry, in particular, has enjoyed rising demand from apparel makers and clothing lines in Europe and Japan.

Myanmar exported $2.7 billion worth of garment products in 2017, according to the Myanmar Garment Manufacturers Association (MGMA). This represents a near doubling of garment export revenue in just two years. Garment export revenues in 2018 are predicted to remain around $2.7 billion.

Mining boom?

Mineral exports are likely to improve under the new Myanmar Mining Rule enacted in February, U Than Soe, deputy permanent secretary of the Ministry of Natural Resources and Environmental Conservation (MONREC), told The Myanmar Times.

The new legislation allows foreign companies to invest in large-scale sites of more than 500,000 acres (202,000 hectares) as well as medium scale sites of up to 247.1 acres.

MONREC will also allow investments in small-scale mining sites for gold and other precious metals of up to 4 acres, sites of up to 10 acres for other minerals and sites for raw industrial materials and precious stones of up to 20 acres.

Livestock, fisheries neglected

The livestock and fisheries sector has strong export potential. Yet, it is among the most neglected sectors in Myanmar.

One of the main barriers to growth is the lack of space to expand. “With regards to land for livestock breeding, the industry needs rules and regulations and a comprehensive policy that is both comprehensive and easy to apply. Reform is needed now,” said Daw Hla Hla Thein, vice chair of Myanmar Feed Industry Association.

Land issues exist for fisheries, too. Even though there are plans to establish a 10,000 acre fisheries zone for farming fish in Kungyangon Township in Yangon, for example, progress has been waylaid by delays in obtaining permits to convert land for agriculture into space for fish farms. Ayeyarwady, Mon and Tanintharyi face similar permit issues.
Support for agriculture - GAP

Although the agriculture sector has accounted for at least a quarter to a third of export earnings, according to the Food and Agriculture Organisation of the UN, that appears to have fallen to just over 20pc in 2017-18, based on data from the Ministry of Commerce.

U Soe Tun, deputy chair of the Myanmar Rice Federation, said one of the reasons is poor crop quality. Currently, quality seeds distributed by the government barely accounts for 1pc of the total land area allocated for farming, he said.

“Although the government said our country is an agricultural country and to prioritise it, there are weaknesses in seed distribution and systematic growing of crops. There has not been much progress or implementation of plans to improve or produce agricultural products. The government and the private sector are still weak in doing so,” U Soe Tun said.

Access to financing is the biggest problem for many farmers and help has been forthcoming on that front. According to an October statement from the Ministry of Planning and Finance, state-owned Myanmar Agriculture Development Bank (MADB) will raise crop loans from K50,000 per acre to K100,000 per acre to help farmers cover the cost of production, Last year, loans were raised to K50,000 per acre from K20,000.

Offshore prospects

Last year, Myanmar received more than US$3 billion for gas exports, according to the Ministry of Commerce. That could soon increase.

In August, the Ministry of Electricity and Energy (MOEE) announced it would be opening new tenders for 31 oil and gas blocks -18 onshore and 13 offshore - within the first half of next year.

The aim is to rejuvenate gas production and exports, which have been dwindling on the back of lower investments. The last round of exploration and production tenders was held under the former government in 2014.

For now, Myanmar is expected to produce 653,300 million standard cubic feet (MMscf) of gas from its four existing gas fields – Shwe, Zawtika, Yetagun and Yadana – in 2018-19, according to the finance ministry. Most of the gas produced is exported to the country’s neighbours.