October 2022 – March 2023

Myanmar Trade & Investment Update

With exports declining and imports remaining stable, Myanmar returned to a trade deficit in the six months to March
2023. Manufacturing exports declined from the high levels reaching in the second half of 2022, but agricultural exports picked up in
response to higher global demand and prices. Imports remained relatively stable, supported by intermediate imports (primarily fuel)
and a pick-up in capital imports, while consumer imports weakened further. Foreign direct investment commitments remained weak
in the six months to March 2023, at about US$400 million, 85 percent below the equivalent period three years ago. Several
international firms announced they would cease their operations in Myanmar, and some global clothing brands announced a halt to
sourcing from Myanmar. The trade policy environment remained restrictive, with all exports now subject to export license, effective
April 1, 2023.

Disclaimer: The most recent data for Myanmar’s trade figures used in this note is from the Ministry of Commerce’s monthly and weekly aggregates. Slight
discrepancy issue has been observed between the MOC’s data and the Central Statistical Organization’s (CSO) data, which publishes the data with a time lag.
Hence, the most recent data presents in this note are best considered as trends in the recent months, rather than the exact figures.
 Trade and Investment Update

1. International Trade
1.1 Myanmar returned to a trade deficit in the six months to March 2023
With exports declining, Myanmar returned to a trade deficit in the six months to March 2023 (Figure
1). Since reaching 2019 levels in mid-2022, the US dollar value of exports has declined. Other East Asia and
Pacific regional peers have also experienced export declines over the six months to March 2023 (Figure 2),
reflecting waning global demand. However, the US dollar value of imports remained stable throughout the
same period—driven by intermediate imports. Consequently, the trade balance widened to a US$843 million
deficit in the six months to March 2023.
Figure 1: Trade trends Figure 2: Good export trends of EAP countries
2400 200

1800 150

Index 2019 average =100

US$ million

1200 100

600 50
0
0

Sep-20

Sep-21

Sep-22
Dec-19
Mar-20
Jun-20

Dec-20
Mar-21
Jun-21

Dec-21
Mar-22
Jun-22

Dec-22
Mar-23
-600
Apr-20

May-22
Sep-20
Nov-19
Jun-19

Dec-21

Mar-23
Jul-21

Oct-22
Jan-19

Feb-21

Cambodia Indonesia Malaysia

Exports Imports Trade Balance Myanmar Philippines Thailand
Vietnam
Source: Ministry of Commerce and CEIC Source: Ministry of Commerce and CEIC
Note: Data reflects a 3-month moving average. Note: Data reflects a 3-month moving average and is seasonally adjusted.

With the easing of border disruptions with Figure 3: Myanmar’s land trade with major partners
China, land trade with China recovered (Figure 600
3). Border disruptions with China have gradually
eased since January 2023, including reopening 450
border gates at Muse and abolishing the driver-
substitution system, thereby allowing Myanmar 300
truck drivers to enter China at selected border gates,
such as Muse's Kyin San Kywat gate and Kan Pite 150
Tee gate. The Chinese New Year may also have
0
contributed to increased exports from Myanmar.
Apr-20

May-22
Sep-20
Nov-19
Jun-19

Dec-21

Mar-23
Jul-21
Jan-19

Feb-21

Oct-22

Imports from China through land borders have also

increased since the beginning of 2023. However, China (Imports) Thailand (Imports)
certain border restrictions remained, such as only China (Exports) Thailand (Exports)
allowing six-wheel trucks to enter China through Source: Ministry of Commerce
Muse's Man Wein gate. Moreover, traders have Note: Data reflects a 3-month moving average.
experienced increased trade times due to the
imposition of strict inspections for goods from and to China.
Overall, trade with Thailand has slumped since January 2023—driven by a decline in natural gas
exports to Thailand, along with border disruptions due to conflict escalation (Figure 3). Despite
declining exports, imports from Thailand through the land border have increased since January 2023, partly
attributable to a sharp increase in imports through the Nabulae/Htee-Khee border gate in February 2023. The
gate has experienced temporary closures and logistics disruptions along the road connecting Dawei and Htee-
 Trade and Investment Update

Khee since early 2022 due to conflict escalation. Reports indicated that the Dawei-Htee-Khee road link had
been closed without further notice in late January, making it difficult to explain the recorded import increase
through this gate in February.

1.2 The value of manufacturing exports declined, but agricultural exports picked up.
With global demand waning, manufacturing exports have weakened after peaking above the 2019 level
in the September 2022 quarter (Figure 4). Myanmar's gas exports to China and Thailand – which comprise
around 40 percent of total manufacturing exports – have declined since December 2022 (Figure 5). This is
partly due to the declining capacity of existing gas fields and the withdrawal of international firms from
Myanmar, resulting in reduced technical and industrial know-how. Myanmar's garment exports—accounting
for around 50 percent of total manufacturing exports – have declined since late 2022. However, part of this is
likely due to a seasonal reduction in demand ((Figure 6 and Figure 7). Altogether, garment and gas exports—
accounting for more than 90 percent of manufacturing and more than half of total exports—were the main
driver of the overall exports decline.
Figure 4: Manufacturing and agriculture export trends Figure 5: Myanmar gas exports to China and Thailand
140
1200
Index 2019 average =100 120
100
800
US$ million

80
60
400 40
20
0 0
Apr-20

Apr-20
May-22

May-22
Sep-20
Sep-20

Nov-19

Dec-21
Nov-19

Jun-19

Mar-23
Jun-19

Dec-21

Mar-23

Jul-21
Jan-19

Jul-21

Jan-19

Feb-21

Oct-22
Feb-21

Oct-22

Agriculture Manufacturing
Thailand (MMSCFD volume) China (US$ value)

Source: CEIC and Ministry of Commerce Sources: China's General Administration of Customs and Thailand's Energy
Note: Data reflects a 3-month moving average. Policy and Planning Office (EPPO).
Note: Data reflects a 3-month moving average. Data is mirrored using
natural gas imports reported by China and Thailand to proxy Myanmar's
gas exports to partners with the most updated data. Given a unit difference
between gas exports to China and Thailand, data is indexed at 2019 average
=100. Natural gas imports reported by China and Thailand are in value
(US$) and volume (million standard cubic feet per day–MMSCFD),
respectively.

The outlook remains uncertain for Myanmar garment exports. With the global economy slowing down
in 2023, the consumer demand for apparel is also expected to wane. The waning global demand is partly due
to seasonal factors (Figure 6) and seems to have already impacted Myanmar's garment industry. In late 2022,
some garment factories experienced temporary closures and reduced operating hours due to lower orders for
spring clothing from Japan, Korea, and the European Union. The results from the BOF-McKinsey State of
Fashion 2023 survey suggest that demand from Europe—a major destination for Myanmar's garments—is
expected to be lower in 2023 compared to 2022. However, demand from Japan and South Korea is expected
to remain resilient, which could offset lower European consumer demand. Nonetheless, several global brands
announced that they would halt sourcing from Myanmar during the six months to March 2023. These included
Primark, Fast Retailing (owner of Uniqlo and GU brands), Ryohin Keikaku (owner of Japanese brand Muji),
and Marks & Spencer. Fast retailing and Ryohin Keikaku will halt sourcing from Myanmar in the September
2023 quarter, which marks the end of orders for fall-winter products, while Marks & Spencer already halted
 Trade and Investment Update

sourcing in March 2023. Two factories producing clothing for Primark were shut down in March 2023, resulting
in the job loss of some 2,000 employees.
Figure 6: Total clothing/apparel imports from the EU, Japan, Figure 7: Garment exports via Yangon seaport (in TEUs)
and South Korea
200 20
Index 2019 average=100

160 16

TEUs (thousands)
120 12

80 8

40 4
0 0
Apr-20

May-22
Sep-20
Nov-19
Jun-19

Dec-21

Mar-23
Jul-21
Jan-19

Feb-21

Oct-22

Apr-22
May-22

Aug-22
Sep-22

Nov-22
Mar-22

Jun-22

Dec-22

Mar-23
Jul-22
Jan-22
Feb-22

Oct-22

Jan-23
Feb-23
EU Japan South Korea

Source: CEIC Source: Shipping operators.

Note: Data reflects a 3-month moving average and represents the total
clothing/apparel imports of the EU, Japan, and Korea (not just imports
from Myanmar).

Partly due to seasonal factors, agricultural exports have increased since October 2022 (Figure 4),
supported by major agricultural exports, including rice (Figure 8). According to data from Myanmar Rice
Federation, Myanmar exported about 2.2 million tons of rice in the fiscal year (FY) 2023 (ending in March
2023), exceeding its 2 million ton target. A continued global rice price increase primarily supported Myanmar's
rice export performance in FY23 and the six months to March 2023 (Figure 9)—contributing to an overall
increase in agricultural exports and a 15 percent increase in rice exports in value terms compared to the same
period last year. The ease of the border disruptions with China also partly contributed to increased rice exports,
as China became the largest buyer in January and February 2023, surpassing Bangladesh in previous months.
However, rice exports have declined since February 2023, partly due to seasonality and a moderating global
price.
Figure 8: Myanmar's rice and beans exports Figure 9: FAO's all-rice price index
300 250 140
Metric tons (thousand)

200
120
US$ million

200
2014-2016=100

150
100 100
100
50
0 0 80
Apr-20

May-22
Sep-20
Nov-19
Jun-19

Dec-21

Mar-23
Jan-19

Feb-21
Jul-21

Oct-22

60
Apr-20

May-22
Sep-20
Nov-19
Jun-19

Dec-21

Mar-23
Jul-21
Feb-21

Oct-22
Jan-19

Rice Volume
Beans and Pulses Volume
Rice Value (RHS)
Beans and Pulses Value (RHS) FAO's all rice index
Source: Central Statistical Organization, Ministry of Commerce, and Source: FAO
Myanmar Rice Federation.
Note: Data reflects a 3-month moving average.

Policy interventions appeared to impact the momentum of rice exports in February and March 2023.
Reports suggest that foreign exchange surrender requirements for rice exports through the land border
 Trade and Investment Update

(effective from March 2023) and the suspension of export licenses for rice in February 2023 almost resulted in
a virtual halt in rice exports to China through the land border in March 2023. Anecdotally, the average number
of daily trucks for rice exports to China through the Muse-Ruili border declined from about 50 before March
1 to about ten after March 10 due to policy interventions.

Bean and pulse exports trended steadily upward in the six months to March 2023 (Figure 8). Beans and
pulses exports, in both volume and value terms, were about 8 percent higher than in the same period last year,
partly contributed by growing demand from India and a memorandum of understanding (MOU) between
Myanmar and India for black grams and pigeon peas signed in June 2022, up to the fiscal year 2026. With export
prices to India increasing, domestic prices for beans and pulses have also increased since late February,
supported by low stocks in the domestic market and declining yields. Farmers' profitability remained impacted
by increased labor and other input costs despite higher prices.

According to the USDA's Grain and Feed Annual 2023, Myanmar's corn exports (in volume terms)
performed well between October 2022 and February 2023, primarily attributable to increased exports in
the December 2022 quarter, compared to the same period last year. Despite corn exports trending upward in
late 2022 and early 2023, they were much lower than in February 2021 and 2022. Anecdotally, delayed transport
times due to increased checkpoints along the road connecting Yangon and Myawaddy contributed to reduced
corn exports in February 2023, the first month Thailand imposed a zero import tariff for corn. With the export
price for corn declining, the escalation of conflict along the Myanmar-Thailand border, and a recent halt in
corn exports to China through sea trade, corn exports will likely decline in the near term.

1.3 Intermediate imports continued to support overall imports.

Overall, imports remained stable in the six months to March 2023 (Figure 10). An increase in
intermediate and capital imports was broadly offset by a decline in consumer imports. With cut-make-pack
(CMP) imports slowing due to the weaker global garment demand, the pick-up in intermediate imports was
likely driven by an increase in the value of refined mineral oil and fuel imports. Since early 2022, fuel imports
have accounted for more than half of intermediate imports and a quarter of total imports (in value terms).
Consumer imports remained weak, partly reflecting weak demand for consumer products and the impacts of
import restrictions. In late 2022, capital imports reached the highest level since February 2021 but remained
lower than pre-COVID-19 levels.
Figure 10: Import trends Figure 11: Diesel and gasoline imports
1000 450
Metric ton (thousands)

750 350
US$ million

500 250

250 150

0 50
Apr-20
Nov-19

May-22
Sep-20
Jun-19

Dec-21

Mar-23
Jan-19

Jul-21
Feb-21

Oct-22

Apr-20

May-22
Sep-20
Nov-19
Jun-19

Dec-21

Mar-23
Jul-21
Jan-19

Feb-21

Oct-22

Capital Intermediate Consumer

Diesel Gasoline
Source: Central Statistical Organization, Ministry of Commerce, and Source: Shipping operators
Myanmar Rice Federation.
Note: Data reflects a 3-month moving average.
 Trade and Investment Update

Box 1: Myanmar's missing jade exports

Analysis of mirror data suggests that Figure 12: Gap between Myanmar's exports and China's recorded
Myanmar's official export data significantly imports from Myanmar
under-reports exports of jade. As mentioned in 2,400
the previous trade and investment update, the gap
1,800
between Myanmar's recorded exports to China
and China's recorded imports from Myanmar has 1,200
diverged significantly since late 2021 (Figure 12).

US$ million
In 2022, Myanmar's recorded exports to China 600
were 68 percent lower than China's recorded
0
imports from Myanmar. Mirror analysis using data
from China's General Customs Administration -600
suggests that jade1 appears to be a primary product
contributing to this difference, as jade exports to -1,200
China increased from US$1 billion in 2021 to -1,800
US$3.9 billion in 2022. In contrast, Myanmar's

May-17

Apr-20

May-22
Aug-18

Sep-20
Nov-19
Dec-16

Mar-18

Jun-19

Dec-21

Mar-23
Oct-17

Feb-21
Jul-21

Oct-22
Jan-19
official data indicates that Myanmar's total jade
exports were a negligible US$9 million in 2022—
equivalent to about 0.2 percent of China's China's recorded imports from Myanmar
recorded jade imports from Myanmar and Myanmar's recorded exports to China
suggesting that jade alone attributed to about 50 Export gap (MMR-CHN)
percent of the gap in 2022. Tin and "other"
Source: The General Administration of Customs of China (GACC), the
(unspecified) imports from Myanmar accounted Ministry of Commerce of Myanmar, and the Central Statistical
for most of the remaining differences (Figure 13 Organization of Myanmar.
and Figure 14).
Figure 13: China's recorded imports from Myanmar Figure 14: Myanmar's recorded exports to China
12,000 12,000

9,000 9,000
US$ million
US$ million

6,000 6,000

3,000 3,000

0 0
2015 2016 2017 2018 2019 2020 2021 2022 2015 2016 2017 2018 2019 2020 2021 2022

Natural gas Tin ores and concentrates Natural gas Tin ores and concentrates
Vegetables Precious stones and metals Vegetables Precious stones and metals
Base metals Other Base metals Other

Source: The General Administration of Customs of China (GACC) Source: The World Integrated Trade Solution (WITS)
Note: The GACC data indicates that jadeite jade (HS 71039910) accounts for around 90 percent of precious stones and metals. While data
from the GACC is available at the HS-digit level, data from the WITS is available only up to HS 6-digit level. With this limitation, precious
stones and metals (HS 71), a broader classification of jadeite jade, are presented in Figures 13 and 14.

The actual amount of Myanmar's jade exports to China could also be significantly greater than the
official estimates from Chinese customs. According to the findings of a Global Witness report in 2015,

1Jade refers to minerals called nephrite and jadeite. In this note, jade refers to jadeite (HS 71039910 – Jadeites, further
worked than sawn or rough shaped), the variant of mineral which Myanmar exports.
 Trade and Investment Update

China's recorded jade imports were about US$12 billion in 2014, while the estimated total production of
Myanmar was worth about US$31 billion in the same year.2 The report also stated that about 50-80 percent
of this estimated total production was smuggled through the Myanmar-China land border. Anecdotally, jade
smuggling increased after the February 2021 coup. In a recent report in 2021, Global Witness estimated that
up to 90 percent of all jade mined in Myanmar was smuggled to China.3 Despite the authorities' order to
suspend mining activities for jade and gems in December 2021, mining operations continue illegally in
Hpakant, where most of Myanmar's jade is mined.

2. Investment
2.1 Foreign direct investment commitments remained low.

Foreign direct investment (FDI) Figure 15: FDI commitments

commitments remained low at US$400 million
3.0
in the six months to March 2023 (Figure 15) as
international firms continued to exit. The 2.5
manufacturing industry dominated the total FDI
2.0
commitments with 36 percent (or US$143 million US$ billion

across 35 projects), followed by services (32 1.5

percent across three projects) and power (29
1.0
percent across five projects) (Figure 16). Hong
Kong was the top investor in the six months to 0.5
September 2022, with 25 percent (or about US$99
0.0
million) of the total FDI commitments across six Apr-20

May-22
Sep-20
Nov-19
Jun-19

Dec-21

Mar-23
Jul-21
Jan-19

Feb-21

Oct-22
projects, followed by Thailand (with 24 percent or
US$95 million) (Figure 17). Well-known
Source: Directorate of Investment and Company
international firms announcing exits from Administration (DICA)
Myanmar in the six months to March 2023 include
Singapore-based Swiss petroleum company Puma Energy, Australian-based ANZ bank, Thailand's PTT Oil
and Retail Business (PTTOR), American energy giant Chevron, Swiss food company Nestle, and Singaporean
urban developer Keppel Land. In addition, reports suggest that the Thilawa Special Economic Zone (SEZ)
rental income declined by 70 percent in 2022 compared to last year, further signaling a weak investment climate.

Figure 16: FDI commitments in value term by industry in the six Figure 17: FDI commitments in value terms by country in the six
months to March 2023 months to March 2023
Others Others
3% Japan3% Singapore
4% 16%
South Korea
Services 13%
32% Manufacturing
36%
Hong Kong
Thailand 25%
24%
Power China
29% 15%

Source: Directorate of Investment and Company Administration (DICA)

2 Global Witness. 2015. Jade: Myanmar’s “Big State Secret”.

3 Global Witness. 2021. Jade and Conflict: Myanmar’s Vicious Cycle.
 Trade and Investment Update

3. The policy environment

3.1 Further restrictions were introduced in the six months to March 2023

All export items are now subject to export licenses. The MOC issued newsletter no. (6/2023) on March
22, 2023, announcing that all export items require licenses from April 1, 2023. This announcement was a
modification of newsletter no. (3/2023), which required export licenses for 87 percent of tariff lines at the 10-
digit harmonized system (HS) level through land borders.

Further administrative procedures were introduced. Effective November 1, 2022, only bank transactions
are allowed for imports through land borders. Importers must acquire foreign exchange through export
earnings or other incomes (such as salary and remittances of Myanmar nationals working abroad) via banks to
pay for the imports.4 From February 2023, cargo trucks exporting goods through land borders required cargo
transport permission.5 To obtain permission, traders must first apply for export licenses through the Myanmar
TradeNet 2.0 system. After receiving the export license, traders must register details of cargo trucks at the
Vehicle Monitoring System. Effective March 1, 2023, rice exporters exporting through the land border,
previously exempted from the foreign currency surrender requirements, are now required to convert 65 percent
of their export earnings into kyat at the official reference rate.

4 The Ministry of Commerce’s Newsletter No. 10/2022.

5 The Ministry of Commerce’s Newsletter No. 2/2023.