Myanmar entrepreneurs have requested the government to negotiate the ban on sugar re-exports with China’s commerce commission.
The issue was raised by U Soe Lin, chair of Myanmar Sugar and Sugarcane Product Entrepreneurs Association, during the 16th regular meeting of Vice President U Myint Swe with Myanmar entrepreneurs.
Chinese entrepreneurs have set up sugar factories in China and purchase Myanmar’s sugarcane through the border trade route.
However, Myanmar’s merchants have to deal with problems such as the confiscation of the imported sugar, as this trade is considered illegitimate in China.
Myanmar has authorised its traders to conduct sugar re-export businesses with an aim to boost trade. However, China does not allow sugar imports through the border gate.
A ban on sugar re-exports to China can trigger a sugar glut in the domestic market and harm the interests of local sugar mills and sugarcane growers.
Myanmar must grant approvals to sugar import businesses only if they have discussed the tariff rate quota, as in Cambodia, according to sugar entrepreneurs.
The Commerce Ministry gave its nod to the re-export of sugar in September 2017 to earn hard currency, enhance trade and create job opportunities.
However, the authorised companies have to strictly adhere to the prescribed rules and regulations. The companies will be inspected to ensure they abide by the set rules, and action will be taken against companies that violate them.
Some companies reportedly sell sugar imported under the re-export system in the domestic market. If the import list does not tally with the volume of re-exports, such companies will face legal action.
Therefore, companies must check their re-export list against the actual record within a month at the Trade Department, according to news recently released by the Commerce Ministry.
Myanmar merchants import sugar mostly from Thailand and India, as well as from Brazil, Qatar and the UAE, and then re-export it to China through the Sino-Myanmar checkpoint.
Myanmar sugar millers are unable to produce quality sugar that meets the export criteria for the lack of advanced refining machinery.
Some 2 million tonnes of sugar are annually traded under the re-export system.