doing business in myanmar – what you need to know as a singaporean
Sugarcane crushing, which normally starts every November in sugar mills in Myanmar, will be postponed to December this year, an industry insider has revealed.
Sugar prices have been dropping over the last year even uncommon weather conditions have delayed the harvesting of sugarcane. This has led to the postponement of the crushing process by a month, the insider, the owner of a sugarcane business, said.
“Sugar mills will buy sugarcane but they will cut the quantity purchased I think. For example, those who always buy 100 tonnes will reduce to 80 tonnes. Millers will make payments in instalments even as sugar prices have been soft for about a year, so sugarcane farmers may be affected by this situation,” said U Win Htay, deputy chair of the Myanmar Sugar and Sugar Related Products Merchants and Manufacturers’ Association.
Nawaday Sugar Mill has announced that it will offer K45000 per tonne of sugarcane while Great Wall, another miller, is offering K40000 per tonne. Other sugar mills have yet to announce their prices.
The current price per tonne of sugarcane is K4000 to K5000 lower than it was last year.
Nawaday and Great Wall are expected to be the first sugar mills to start operating in early December.
Last season mills processed more sugarcane, leading to a surplus of sugar building up at the mills. This is said to be the leading cause of the anticipated contraction in cane purchases this year.
Sugarcane farmers say they will make more money if the sugar mills are thriving.
“In 2015, a tonne of sugarcane was priced K50,000 then it became K45,000. However, this year, sugar prices dropped and the price for a tonne of sugarcane depends on sugar prices. As Myanmar sugar prices have dropped, farmers are in trouble,” said sugarcane farmer U Ngway Nyunt.
Although the price of sugar has stabilised somewhat, the drop in prices are expected to impact the incomes of farmers and farm workers.
To highlight their plight, some 4500 sugarcane farmers from Sagaing, Mandalay, and Shan sent a letter to President Win Myint on September 6.
In their letter, the farmers highlighted that the number of sugarcane farmers had doubled over the last five years even as the price of sugarcane dropped. They said there are now an estimated 500,000 sugarcane farmers working with only23 sugar mills. The farmers requested that, with local sugar piling up, the government consider limiting the imports of the commodity.
“I think we; both farmers and mills, need to endure this situation for about another year,” said a sugar businessman.
In 2015, the Ministry of Commerce issued licences to import sugar for re-export to China as part of efforts to boost Myanmar’s trade volumes. This led to a surge in the sugar trade and encouraged more farmers to plant sugarcane.
However, illegal exports of sugar in border areas led to a ban on exports of the commodity to China in September 2017. Attempts to restrict smuggled sugar entering Myanmar via Myawaddy, which borders Thailand, were also stepped up.
Despite the ban, sugar is still being smuggled through Mywaddy via unofficial routes, said sugar millers. In an attempt to curb the illegal importation of sugar in the country, a suggestion was put forward in July to temporarily restrict sugar import licences for businesses that use large quantities of the sweetner. – Translated
Source: Myanmar Times
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