Jul 20, 2016

Ministry adds new items to re-export list

The Ministry of Commerce has approved 14 new commodities to be added to the re-export list in a bid to boost export figures as it plans to triple export amount during the current government’s tenure.

Previously, only three items: sugar, betel nut, and oil were approved for re-export. Now, tyres, sesame (white and black), dried chilli, groundnut, cotton, soy beans, textiles, fresh fruit, electronic materials, cosmetics, juices and other groceries, clothes, edible oil and garlic have been included.

Licence applications for the 14 items became available in late June, permanent secretary of the ministry, U Khin Maung Lwin, said.

“Re-export means that we import goods from abroad, process it in the country and then export to global markets. Its strength is that local businesspeople earn more money. They don’t have to be involved in the whole supply chain of value-added products, so it will save costs.

“Singapore also practices the re-export system as they don’t have natural resources. They import the materials and process them locally and re-export them to the international market. It is like a broker business,” he said.

Despite this, some of the products on the list will not have value added to them; rather, Myanmar will act as a middleman for items such as betel nut and cosmetics which it will import from other countries and ship to Northeast India through border trade, according to U Myint Soe from the Ministry of Commerce.

While India is capable of producing its own cosmetics and betel, the transportation costs to ship products to that region of the country are more than what it would pay to import the products from Myanmar.

Although the ministry allowed these items for re-export, there are some restrictions for tyres and groceries.

As for tyre trade, imports are only available through maritime importation and must be re-exported through the Muse border gate to China and also must be done during the raining season to protect rubber planters and procedures.

Juice and other groceries need the Food and Drug Administration’s (FDA)’s approval certificate for re-export licences, according to the Ministry’s statement.

“It happens in some foreign countries. They import Myanmar goods, process them in their countries and re-export them. However, Myanmar has to utilise its GSP benefits. If we face some problem with the re-export system, the goods will crowd the domestics market,” U Soe Win Maung, a consultant at Myanmar Pulses, Beans and Sesame Seeds Merchants Association, said.

Source: Myanmar Business Today