Myanmar must invest heavily in its infrastructure and add value to its exports to compete internationally and create access to Western markets, industry sources say.
Recent comments by the European Union and United States government that import bans and restrictions on Myanmar’s products will be eased have increased the likelihood of Myanmar competiting in those markets but the country needs to reduce transport costs and add value to its exports, they said.
Myanmar’s major exports are natural gas, agricultural products such as rice and beans and pulses, fisheries products, garments and timber. But nearly all leave the country as raw products that have seen little value adding, which would require significant investment in technology and infrastructure.
Minister for Commerce U Win Myint encouraged companies to find ways to add value to their products in comments he made to delegates at the annual general meeting of the Myanmar Rice Federation (MRF) in Nay Pyi Taw in August.
“I will try to encourage local firms to export value-added products, which create jobs and can lead to faster development of SMEs,” he said.
Myanmar faces strong competition from Thailand and Vietnam in its stated aim of boosting rice exports. However, the nation is hamstrung by inadequate capital for farmers, antiquated mills and high transport fees, said rice exporters.
U Ye Min Aung, MRF general secretary, said all aspects of the industry needed investment.
“We need higher standard milling machines to export high quality products,” he said during an October 8 interview.
“We also have to promote post-harvest technologies but our fundamental needs are to reduce transport costs and ensure that there are enough containers – sometimes we face a shortage of containers for shipping and can’t export goods on time.”
Myanmar is the world’s second-largest exporter of beans and pulses after Canada. But exports to the main buyer, India, have decreased in the past two years, said Dr Myan Lin, a beans and pulses exporter and central executive member of the Myanmar Pulses, Beans and Sesame Seeds Merchants Association.
He said quality control is a problem that Myanmar will have to overcome to export to markets such as the US.
“We expect that we’ll be able to export to the US soon but we’re not ready,” he said. “The US market is strongly concerned about quality.
“We need to target the Indian populations in the US to export dried half peas because these are the major buyers.
“But to do so we have to ensure that the fertilisers and pesticides used by farmers meet US safety standards,” he said.
“And transport fees in Myanmar are too high. Sometimes the cost of shipping a product from harvest areas to Yangon for export is the same as the purchase price.”