Border exports to China plummet as dollar payment on Agri products instructed

Transactions on agricultural products are instructed to be made in US dollars as an official settlement currency at the border. Consequently, exports to China through the Muse border post dropped, as traders engaged in the Muse border post stated.
Earlier, Myanmar exported around 70 truckloads of goods per day to China through the Kyinsankyawt checkpoint in the Muse trade zone. At present, only 40 trucks carrying export items are seen in the border market.
“The directive of the US dollar as official settlement currency adversely affected exports. The supply of corn and pulses is not seen. The number of cargo trucks is down by 20-30 for now,” said U Min Thein, vice-chair of the Muse Rice Wholesale Depot.
On 14 December 2021, the Central Bank of Myanmar released a notification that Yuan/Kyat cross-currency settlement in the bilateral transaction was officially allowed in the border areas between Myanmar and China to boost the bilateral cross-border trade, facilitate the trading and bilateral transaction, increase the use of domestic currency as per the objectives of the ASEAN Financial Integration.
After export earnings on agricultural products were earlier set to be paid in dollars instead of Yuan, the official exchange rate against the US dollar was set at K1,850.
At present, the dollar was valued at over K2,500 in the informal FX market, indicating a large gap in the exchange rate. Consequently, it dealt a blow to the agricultural products and exports drastically fell, traders said.
Nonetheless, Myanmar daily conveys approximately 10,000 bags of rice and broken rice to China through the Muse border as rice and broken rice exports via the Muse border trade post are excluded from this directive at present and Yuan payment is available as before.
Myanmar delivers other beans and pulses, rubber, food commodities, fisheries products and mango to China with about 40 trucks, while electrical appliances, industrial goods, building materials, cement and pharmaceuticals are brought back to the country from China. — NN/GNLM