Trade on the Rise along Myanmar’s Busy Thai Borders

 

CHIANG RAI  – Thailand will remain the second largest trading partner of Myanmar for the foreseeable future as cheaper goods from top-ranked China continue to make inroads into Asean’s last frontier economy.

Trade between Myanmar and Thailand was worth $5.57 billion, about 22% of all international trade worth $24.86 billion, during the fiscal year that ended in March 2014, according to the Ministry of Commerce in Myanmar.

Myanmar has a huge trade surplus with Thailand because oil and gas account for a large share of its $4.2 billion in exports, while imports from Thailand into Myanmar were worth $1.36 billion.

Overall bilateral trade between Myanmar and Thailand has risen steadily, from $2.9 billion in fiscal 2010-11 to $3.7 billion in 2012-13 and $5.57 billion in the most recent year.

The two countries also maintain a vibrant border trade but its share of the total remains low.

Than Aung Kyaw, a director with the Ministry of Commerce, said that as long as the people of Myanmar have good relations with China and border trade with China remains high, Thailand will remain in second place.

“We have big demand for Chinese products here,” he said.

Trade between China and Myanmar in the 2013-14 fiscal year was valued at more than $7 billion, which included $4 billion in imports from China.

The main products imported to Myanmar from Thailand were foods, electronic goods, construction materials and home appliances. The major export to Thailand from Myanmar was natural gas.

Thai companies in Myanmar have been gradually been increasing their presence since the country began reforming and opening up. Earlier this year PTT Exploration and Production (PTTEP) Plc said it would invest US$3.3 billion in Myanmar over the next five years to serve the rising demand for energy both in Myanmar and in Thailand.

The company invested $1 billion in oil and gas ventures in Myanmar last year, making the country its second biggest for oil and gas investment after Thailand.

“Conventional trade with Thailand is worth far more than border trade because of the amount of natural gas exports,” said Than Aung Kyaw.

However, border trade between Thailand and Myanmar has been on the rise annually.

Five countries border Myanmar: China, India, Thailand, Laos and Bangladesh. Total border trade turnover was $4.46 billion during the 2013-14 fiscal year, the ministry said. China accounted for 83% of all border trade value.

Myanmar has a total of 14 official border trade posts with its neighbours, including five with Thailand. Myawaddy in Kayin State opposite Mae Sot in Thailand is the biggest with imports worth $240 million in fiscal 2013-14 and exports worth $50 million. The others are Tachilek-Mae Sai, Myawaddy-Mae Sot, Tiki-Sunarong and Kawthoung-Ranong.

Border trade also takes place with China in the towns of Muse, Chinshwehaw and Kanpaikti; Bangladesh (Sittwe and Maungdaw) and India (Tamu and Riv).
“I don’t see trade volume with Thailand will be able to overtake that of China anytime soon, but the trade volume will increase annually,” Than Aung Kyaw said.

“Chinese products are cheap but low quality, Thai products are good quality but more expensive than those from China. That’s why as a market requirement, Chinese products are more in demand in Myanmar,” a trader in Myawaddy said.

Prevailing political tensions in Thailand have potential to affect trading along the border but so far there has been little impact.

Among the main trading partners of Myanmar are China, India, Bangladesh, Australia, the UAE, Belgium, Indonesia, Italy, Japan, Korea, Malaysia, Pakistan, the Philippines, Russia, Saudi Arabia, Singapore, Spain, Thailand, UK, the US and Vietnam.

Myanmar’s major exports are natural gas, rice, beans and pulses, pigeon peas, sesame, corn, rubber, fishery products, teak, hardwood, raw minerals, jade and garments. – By Grace Kyaw