Raw materials imported by CMP businesses plunge to $1.4 bln nearly eleven months

Imports of raw materials by CMP (cut-make-pack) businesses sunk to US$1.4 billion as of 27 August in the current financial year 2020-2021 since October 2020, which reflects a decrease of $584.209 million compared with the year-ago period, according to the Ministry of Commerce.
The figures plunged from $1.9 billion registered the last FY2019-2020, the Commerce Ministry’s data indicated.
Myanmar’s garment exports witnessed a decline of over 20 per cent in the past eight months (October-May) of the current financial year 2020-2021 compared with a year-ago period on the back of a slump in demand by the European Union market. The raw materials imported by the CMP businesses simultaneously fell, the Ministry of Commerce stated.
Exports of garments manufactured under the cut-make-pack (CMP) system were valued at US$2.2 billion between 1 October and 28 May in the current FY, according to data from the Ministry of Commerce.
The figures plunged from $2.7 billion in the corresponding period of the last FY2019-2020.
The IHS Markit Myanmar Manufacturing Purchasing Managers’ Index, a composite single-figure indicator of manufacturing performance, signalled the sharpest deterioration in manufacturing business conditions in the past twelve months. The higher material costs, unfavourable exchange rate movements contributed to a sharp increase in cost burdens, causing constraints to complete the order. The PMI measures the output, new orders, performance, delays in the manufacturing process and stocks of both inputs and finished goods, according to HIS Markit’s statement.
The layoff is extended and the workers are forced to return to their hometowns amid the political development and the COVID-19 resurgence. The COVID-19 adversely impacted the garment sector and the vaccination plays a crucial role in this sector to raise its head again.
The garment industry is facing cancellation of orders and slump in output, new orders. All the CMP factories are temporarily closed down during the official public holidays.
The garment sector is among the prioritized sectors driving up exports. The CMP garment industry emerged as a promising one, with preferential trade from Western countries. Nevertheless, we cannot still expect normalcy for now due to the possible disruption in the logistics and supply sector and other serious consequences amid the COVID-19 impacts, traders stressed.
Myanmar’s manufacturing sector is largely concentrated in garment and textiles produced on the Cutting, Making, and Packing basis, and it contributes to the country’s GDP to a certain extent.
Myanmar mainly exports CMP garments to markets in Japan and Europe, along with the Republic of Korea, China, and the US.
The export value of CMP garments was only $850 million in the 2015-2016FY, but it tripled over the past two FYs. In the 2016-2017FY, about $2 billion was earned from exports of CMP garments. The figure increased to an estimated $2.5 billion in the 2017-2018FY and $2.2 billion in the 2018 mini-budget period (from April to September). It tremendously grew to $4.6 billion in the 2018-2019FY and $4.8 billion in the 2019-2020FY, according to the Commerce Ministry. — KK/GNLM