Trade in Myanmar could be affected this year by China's slowdown

15 ตุลาคม 2558

Trade in Myanmar could be affected this year by China’s slowdown, falling global commodity prices, and devastating nationwide floods, experts say.

China is a major trading partner for Myanmar – bilateral trade with the world’s second-largest economy accounts for over 50 percent of total trade, according to Ministry of Commerce data.

Changyong Rhee, director of the Asia and Pacific Department at the International Monetary Fund (IMF), said growth across ASEAN will moderate in 2015 to 4.6pc, rising slightly to 5.0pc in 2016.

Low commodity prices have hit regional exporters such as Indonesia, Malaysia and Myanmar, he said.

The World Bank last week cut its fiscal 2016 growth forecast for Myanmar from 8.2pc to 6.5pc.

Regional export-driven economies will be affected by the expectation of tightening global financial market conditions, noted Mr Rhee in an Asia-Pacific press briefing last week at the IMF and World Bank annual meetings in Lima, Peru.

Hoe EeKhor, deputy director of the IMF’s Asia and Pacific Department, said the impact of China’s economic transition on Myanmar will be similar to its impact on other commodity producing countries. Myanmar exports oil and gas, rice and other agricultural products to China.

“Because of declining commodity prices, export revenues are falling,” he told The Myanmar Times after the press briefing.

“Another factor is that rice exports are needed within Myanmar’s domestic economy.”

Nationwide flooding in July and August inundated around 1.5 million acres of paddy – destroying over 500,000 acres. The Myanmar Rice Federation placed a 45-day ban on exports to fulfill local demand and keep domestic prices down.

Total trade volumes for this fiscal year have reached around US$13.4 billion. Exports were worth $5.5 billion and imports around $7.9 billion until mid-October, said U Win Myint, director for the Trade Promotion Department of Commerce.

Bilateral trade is down $850 million compared to the same period last year, he said. “We are now evaluating why it has fallen – logistics, the banking system, the exchange rate or manufacturing output,” he said.

The kyat has fallen by around 25pc versus the US dollar this year to K1285 yesterday, according to the Central Bank of Myanmar reference rate.

The government’s trade target for this year is $29.9 billion – which is achievable, said U Win Myint.

Myanmar’s beans and pulses supply has almost run dry, due to high demand from India, with around $350 million earned this year so far, he said.

Natural gas exports are unlikely to fall, he added. Propped up by demand from China and Thailand, they have earned the country $2.5 billion this year as of mid-October.

While rice exports are down, this is due to flooding rather than the impact of China’s economic slowdown, he said. Rice exports are worth almost $180 million this year to date.

“We hope external changes will not negatively impact our country too much. Farmers and exporters will benefit from a weaker currency,” he said.

“We also hope the situation will improve next year when exporters are able to access the EU market.”

Officials previously said they expected rice exports to fall to between 1.5 and 2 million tonnes this y ear.

Source: : http://www.mmtimes.com/index.php/business/17001-china-slowdown-to-affect-myanmar-trade.html