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MMRD BULLETIN
July 7, 2020

NEWS
PRODUCTION

Power projects on track for completion

A photo provide by the Ministry Of Electricity and Enerby of of 350 MW power project in Thilawa SEZ 2.

Seven new power plants that are expected to generate more than 1,000 megawatts of additional electricity are being built in Magwe, Shwetaung, Kyunchaung, Ahlone, Kyaukphyu, Thanlyin, and Thaketa, with the aim of fulfilling the projected increase in demand nationwide for electricity during the hot season.

Of the projects, five are being implemented under a tender and two of the projects, a 151.54MW power plant in Ahlone and a 20mw power plant in Kyunchaung being built by Chinese companies.

The other three projects, a 150MW plant in Kyaukphyu, Rakhine State, and a 350MW plant in Thanlyin, and a 400MW plant in Thaketa, both in Yangon Region, will generate electricity with imported liquefied natural gas.

V-Power Co, the Hong Kong-based winner of one of the tenders, work for the power project is on track, with work on infrastructure such as jetties for the docking of LNG-carrying ships, regasification units, pipelines to carry natural gas, and power transmission lines progressing rapidly in Thilawa, Yangon. A 66MW natural gas power plan in Magway has started operating.

The country’s power needs are increasing 15pc to 17pc per year with present power production totalling 3,566 MW. Yangon Region uses 50pc of the total at 1,436 MW and Mandalay Region comes second with over 500 MW. Minister of Electricity and Energy said power demand is expected to rise by 1,500 MW 2019-2020.

Source: Myanmar Times

VPower, CNTIC forms JV to operate Myanmar emergency power plants

A security guard stands in front of the Sembcorp Myingyan combined-cycle gas turbine plant in Myingyan, Mandalay. Chan Mya Htwe/The Myanmar Times

Hong Kong-listed VPower Group has set up a 50-50 joint venture with a Chinese state firm to develop three power plants in Myanmar as part of the government’s bid to stop power cuts.

VPower, which enjoys close links with investment bank CITIC, and state-owned China National Technical Import & Export Corporation (CNTIC) will jointly develop and operate liquefied natural gas power plants in Rakhine’s Kyaukphyu and Yangon’s Thanlyin and Thaketa townships, totalling 900 megawatts.

The Ministry of Electricity and Energy’s Electric Power Generation Enterprise initiated a tender of five power projects, amounting to 1040MW. VPower Group secured four of the five tenders, including the three projects and one 20MW pipeline natural gas power project in Ayeyarwady’s Kyun Chaung. The fifth one of 120MW in Yangon’s Ahlone township went to a consortium led by China Energy Engineering Group (CEEC), known as EnergyChina.

The tender rush was a result of Daw Aung San Suu Kyi’s government’s failure in materialising private sector interest into added power capacity amid growing demand. Domestic consumption is estimated to be increasing at a rate of 15-17pc every year with the current power generation capacity at around 3600MW now.

Last year’s hot season saw a shortage of 600MW. To fill the gap and provide the additional 12.6GW by 2030, at least US$2 billion per year of investments are needed, according to estimates by the World Bank.

While all five emergency projects are slated to commence operation in the first half of 2020, the Myanmar government has yet to announce that it has signed a power-purchase agreement.

Source: Myanmar Times

Myanmar to set standards for steel, iron

Photo - EPA

Myanmar will soon set standards to ensure the quality of locally produced and imported steel and iron. Standards will be published this year for deformed bar, three types of hot-rolled plate and one type of cold-rolled plate.

The demand for iron and steel is increasing every year with urban development and expansion. According to the Ministry of Commerce, the country imported 1.325 million tonnes of iron and steel in fiscal 2017-2018.

From 2013 to 2018, Myanmar produced 35,000 tonnes of raw materials for iron and steel per year. In 2018, it imported over 2 million tonnes of crude and finished iron and steel products.

Domestic consumption of iron and steel has risen steadily from 1.8 million tonnes in 2016, and could exceed 5 million tonnes by 2025.

Current consumption is 58 kilograms per capita. China produces 800 to 850 million tonnes to meet domestic demand of 500 million tonnes, so 350 million tonnes are exported. Myanmar produces 400,000 tonnes of billet lounge, 600,000 tonnes of steel rolling, and 500,000 tonnes of coated steel a year.

Source: Myanmar Times

Thailand’s high tax on corn imports leading to losses for traders

Image result for corn importMyanmar traders are stockpiling corns to export them to Thailand, but a high import barrier is posing difficulties, said traders from the Myawady border area.Under a bilateral agreement between Thailand and Myanmar, corn exports were exempted from tax between 1 February and 31 August, 2019. At present, high taxes are serving as a hindrance to corn exports to Thailand.

During October-November in the current financial year, Myanmar shipped more than 100,000 tons of corn to other countries compared to 200,000 tons in the year-ago period. As China is the major purchaser of Myanmar corn, the price is positively related to demand from the neighboring country. However, it has been one year since China suspended the importation of some agro products through the border gates, thereby forcing corn traders to turn to the Thai market.

Besides China, Myanmar exports corn to India, Viet Nam, Malaysia, Singapore, the Philippines, and Thailand. But, the volume of exports to those markets is low.There are more than 1.9 million acres of corn plantations in Myanmar, primarily in Sagaing and Magway regions, and Chin, Kayin, Shan, and Kayah states.As per data from the Ministry of Commerce, Myanmar exported 1.5 million tons of corn, worth US$270 million, in the 2018-2019FY; 1.4 million tons of corn, worth over $290 million, in the 2017-2018FY; 1.2 million tons of corn, worth $250 million, in the 2016-2017FY; and, 1.1 million tons of corn, worth $300 million, in the 2015-2016FY.

Source: Global New Light of Myanamar

ActionAid to help spur seed production in several areas

Related imageThe Agriculture, Livestock and Irrigation Ministry has linked up with ActionAid Myanmar to carry out seed production and help businesses in central plain tropical zone and Ayeyarwady Deltaadapt and ensure climate change.”We will mainly carry out seed production and agricultural techniques in Ayeyarwady Delta and tropical zone by inviting experts from ActionAid and exchanging technology with them”, ” said U Ye Tint Tun, director general of the ministry’s Department of Agricultural.

The aim is to receive pedigree seeds for the farmers in the project region and to be able to run the businesses that endure climate change.ActionAid will provide $2.537million and the operations will be implemented in tropical regions such as Meikhitla, Tharsi, Myaing-Kamma, Pakokku and in delta regions such as Phyapon, Pathein and Ngaputaw.

Although Myanmar is an agricultural country, it still requires good quality seeds. While seeds are being produced at the ministry’s farms they do not meet the needs of farmers. Moreover, participation by the private sector is still weak and that is why most farmers still face difficulties in getting pedigree seeds.In reality, they should enable farmers to be able to produce seeds themselves. If so, every farmer would easily get the seeds.

Source: Myanmar Times

ChaungU Township supplies 40 trucks of muskmelons to Muse market daily

Image result for Muskmelon In Myanmar ChaungU Township supplies 40 trucks of muskmelons to the Muse market every day, stated U Soe Lwin, chairperson of Sagaing Region Watermelon, Muskmelon Growers and Producers Association.Last year, muskmelon growers faced losses due to the low price. The price rose slightly in the second week of December 2019.

Some muskmelons were damaged by the poor rainfall. The growers had to use irrigation water to maintain their operations. Muskmelon prices currently range from K400 to K850 per kilogram. Because of the high input cost, the growers can cover their cultivation costs only if they charge K850 per kilogram. They can earn a profit only if each acre produces about 10 tons of crops.

There are more than 30,000 acres of muskmelons in the Sagaing Region and over 10,000 of them are managed by the ChaungU Township.Watermelons and muskmelons top the list of fruits being exported to China, and the export volume has increased significantly year-over-year. If growers follow GAP guidelines, they can charge higher prices. But most of them are still using pesticides. Myanmar’s watermelons and muskmelons have grabbed a large market share in China.

Source: Global New Light of Myanmar

Myanmar’s corn exports halve in 2019-2020FY

Image result for Myanmar CornMyanmar shipped over 100,000 tons of corn to other countries during October-November in the current financial year compared to 200,000 tons in the year-ago period .As China is the major purchaser of Myanmar corn, the price is positively related to demand from the neighboring country.
At present, corn prices are ranging around K340-380 per viss.

China sometimes allows traders to directly purchase corn up to a certain limit as a substitute for opium.If the export volume exceeds the quota, corn is confiscated as it is considered an illegal good. Laos traders have proposed purchasing rice and corn produced in Shan State and re-exporting them to China.Besides China, Myanmar also exports corn to India, Viet Nam, Malaysia, Singapore, the Philippines, and Thailand. But, the volume of exports to those markets is low.

There are more than 1.9 million acres of corn plantations in Myanmar, primarily in Sagaing and Magway regions, and Chin, Kayin, Shan, and Kayah states.Myanmar exported 1.5 million tons of corn, worth US$270 million, in the 2018-2019FY; 1.4 million tons of corn, worth over $290 million, in the 2017-2018FY; 1.2 million tons of corn, worth $250 million, in the 2016-2017FY; and, 1.1 million tons of corn, worth $300 million, in the 2015-2016FY.

Source: Global New Light of Myanmar

Agriculture as an economic driver

Image result for shan state agricultureIt’s common to see roads in Shan State full of trucks loaded with vegetables. The state produces 60 percent of all vegetables consumed within the country.Some of the crops are even exported to neighbouring countries.The state government now says that it is making moves to place more emphasis on developing agriculture over tourism as Shan has the potential to become an agricultural powerhouse in Myanmar and the region.

There are huge economic prospects in Shan State’s agriculture. If investors tap this potential sustainably, there will be good outcomes for both the state and investors. Many farmers in the state still use traditional methods.The State produces and reaps abundant harvests, there are still insufficient supporting services. Germany-based international retais and wholesale company METRO Wholesale has expanded in Shan State to get products directly from farmers and livestock breeders to distribute in other parts of the country. The government of Shan State is planning to carry out a short-term project to develop agriculture, and a long-term investment project to increase investment in the state.One of the issues is the market, which is hardest to achieve.

The produce of Shan State such as avocado, mango, others is exported to Asian countries, and coffee and tea is exported even to America and European countries.Although Shan State has good potential for sustainable agricultural development, it still has many challenges to overcome, from production to market development.Considerable effort will have to be made to see even more trucks carrying agricultural goods running along Shan State’s roads to regional and global markets.

Source: Myanmar Times 

 

Sugar production to be delayed this year, insiders say

Image result for sugarcane plantationSugarcane 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.

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. 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. Although the price of sugar has stabilized somewhat, the drop in prices are expected to impact the incomes of farmers and farm workers.

Source: Myanmar Times 

Work on urgently needed gas pipeline might only start next year

Image result for Zawtika natural gas fieldAlthough a new pipeline for the Zawtika natural gas field is urgently needed, work on the project is expected to only begin next year 2020, due to negotiations over the cost of the project, officials say. The cost for the new pipeline is supposed to come from revenue generated for the Myanmar Oil and Gas Enterprise (MOGE) by the current Kanpauk-Myaing Kalay pipeline that transfers natural gas from the Zawtika field for local use. The Zawtika M9 block is being worked as a 80/20 joint venture by Thailand’s PTT Exploration and Production Public Co Ltd and MOGE.

A total of 9.7 cubic metres (345 million cubic feet) of natural gas is produced daily from the Zawtika Field. Some 2.8 million cubic metres for daily domestic consumption is channelled from the offshore field in the Gulf of Moattama to the Zawtika Operation Centre (ZOC) in Kanpauk Township, Tanintharyi Region. The natural gas is then transferred to Myaing Kalay, Kayin State, via the 200km,6 metre wide Kanpauk-Myaing Kalay pipeline. The rest of the gas is sent to Thailand.

Although the Field is producing natural gas at a good rate, the existing pipeline is not efficient enough to handle the full 2.8 mil cbm of natural gas meant for Myanmar. At present, it can handle only between 1.69 mil and 2.26 mil cbm a day, said PTTEP Myanmar. PTTEP,  responsible for upgrading the pipeline, made a proposal for the project to MOGE in 2018 and is waiting for the decision to start work. Once approved, MOGE is expected to call a tender for the project which is expected to take around two years to complete. The field is 230 km off the coast of Myanmar.

Source: Myanmar Times

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Thae Oo Myintzu
MMRD Insight—Editor
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