Myanmar, Bangladesh ‘cement diplomacy’
Despite Bangladesh’s icy relation with Myanmar regarding the Rohingya issue, bilateral trade between the two neighbouring countries has been increasing gradually over the years.
Trade between two countries suffered in the last fiscal year 2020-21. But even after that, bilateral trade, especially through land ports, is expected to jump over 225% after the completion of the current fiscal 2021-22, according to sources.
The volume of trade between two countries stood at 185,822.28 tonnes in July-March period of FY21.
Current trend shows that bilateral trade is likely to reach 250,000 tonnes by June 30.
The bilateral trade between the two countries stood at 78,257.44 tonnes as against 202,453 tonnes in FY20.
Goods are being handled through 400-500 cargoes every month, while 2,500-2,600 trucks carry the goods.
Myanmar primarily exports dry fish, chilled fish, ginger, onion, burma teak wood, Garjan wood, plum pickle, red chilies and coconut to Bangladesh.
Bangladesh exports fresh potatoes, cement, apparel, textile wastage, soft drinks, biscuits, live eels and fish to Myanmar.
During the first six months of FY22-23 (July-December), Bangladesh’s cement industry earned export revenue of US$4.69m on the export of cement, mostly to neighbouring Asian countries, compared to US$3.91m in the same six months last year. This translates to growth of 20 per cent YoY but marks a shortfall of 9.1 per cent to meet the target of US$5.166m set for these months of the ongoing fiscal year. The figure also includes a minor amount of salt, stone and related products, says the Bangladesh Export Promotion Bureau (EPB) data.
Bangladesh has set an export target for the cement industry at US$11m during the 12 months of the ongoing financial year ending 31 June 2023, compared to US$9.57m earned in FY21-22 (July 2021-June 2022). This translates to expected growth of 15 per cent YoY, according to the EPB.
Bangladesh’s total merchandise exports, including cement, reached US$27.31bn during 6MFY22-23 against US$24.69bn in corresponding months a year earlier, reflecting growth of 10.6 per cent.
More than a dozen companies export cement to India, Myanmar, Nepal, Maldives and Sri Lanka.
Bangladesh producers see Myanmar as potential destination for their products as huge development work is taking place in the states close to Bangladesh-Myanmar border.
One local cement-maker – Premier Cement – has already started shipment of the building material to Myanmar, while the others are either in the negotiation or planning phases to export the item.
Currently, around five local cement-manufacturing companies are also exporting cement to India in a bid to expand export market and help reduce trade gap between the two countries.
“We’re exporting 20,000 bags each month but the demand is even higher,” Amirul Haque, managing director of Premier Cement told the Financial Express on Tuesday.
He also said Myanmar companies want at least 20,000t of cement each month saying: “I cannot supply the quantity, as we have limited production capacity.”
Jahangir Alam, managing director of MI Cement said: “I’ve also exported a small quantity of cement few months back.”
An official of Aramit Cement said many exporters who do not produce cement are also exporting cement to Myanmar on regular basis. Such exporters are procuring cement from plants located in Chittagong and its surrounding areas.
Mustafa Haidar, director of Premier Cement, said Myanmar construction firms consider sourcing of cement from Bangladesh as cost effective. But, he said international payment system cannot be applied in transferring money, as Myanmar lacks formal banking arrangements with Bangladesh.
Myanmar has decided to import 3,000 tons of cement to Rakhine from Bangladesh after the State chamber of commerce and industry urged the centre to grant permission for importing cement from the neighbouring country.
The development came following the approval of Naypyitaw Nasaka Council earlier last year.
“Rakhine State government has been allowed to import the cement with an aim to stabilize its market value and sell at a reasonable price,” said State chamber of commerce and industry chairman Tin Aung Oo.
Earlier, the country had restricted cement and fertilizer trade through the Bangladesh-Myanmar international border.
After the western Myanmar state has been allowed to import cement from Bangladesh, the Naypyitaw commerce department has notified the border trade companies about the development targeting the aspirants for necessary licenses to be involved in the trade.
Presently, a bag of cement in Rakhine State is priced between 12,000 and 16,500 Kyats which was between 7,000 and 8,000 Kyats before the coup of 1 February 2021. The cost is expected to go down in the coming days after the import from Bangladesh begins.