Cargo trucks loaded with goods imported from Thailand at No. 2 Friendship Bridge in Mae Sot in November 2021. / The Irrawaddy
By The Irrawaddy 28 April 2023
Ongoing fighting between junta troops and allied Karen resistance forces around Myawaddy Township in Karen State at the Thai border is continuing to take a toll on Myanmar’s border trade with Thailand.
The regime has still been unable to repair administrative buildings damaged in the fighting in the Myawaddy border trade zone one month ago. It has now resorted to online handling of trade procedures, and customs only work half a day, merchants said.
A merchant from Myawaddy said: “[Customs] only check goods until noon. They work in their office the rest of the day. They handle trading procedures online. Trade stopped for a while due to the Thingyan holiday, which followed the fighting, and although it has resumed, it is slow. Fighting continues in the same area some seven miles from Myawaddy and three miles from the border trade zone.”
Before clashes erupted, around 300 truckloads of goods traveled daily between Myanmar and Thailand through the Myawaddy border trade zone. That has now declined to around 100 cargo trucks, he said.
“Before Thingyan, a truck with cargo worth more than 100 million kyats was torched on the Asian Highway. So, many drivers dare not work, and of course the freight rate has increased. Previously, even with high fuel prices, the top freight fee was just 1.5 million kyats between Yangon and Myawaddy. Now it has reached 4 million kyats. A third of cargo trucks have stopped working, so the rest charge higher prices,” said the merchant.
Some companies have purchased war insurance because of frequent fighting along the Thai-Myanmar border trade route, according to merchants.
Junta troops and allied Karen resistance troops clashed around Mekanel village in the southwest of Myawaddy Township from April 18-21, forcing some 3,000 residents from seven villages to flee. Military tensions remain high in the area.
A merchant who exports corn to Thailand said: “Freight charges have increased, and some merchants now buy war-risk insurance. Part of the increase also has to do with high fuel prices. It is difficult to buy fuel.”
Export volume has dropped sharply because of frequent fighting, tight junta security checks on the route, and a plethora of regulations, including the rule that 65 percent of export revenues be converted to kyats at the official exchange rate of 2,100 kyats per dollar. The market exchange rate is around 2,900 kyats per dollar.
Also, export licenses are issued only after exporters have deposited their earnings in their bank accounts. In other words, the exporter can only trade once he has deposited the money that he will earn from the buyer, with 65 percent of it converted at 2,100 kyats per dollar.
Myanmar mainly exports rice, broken rice, rice powder, rubber, and seasonal crops like pepper, while importing food, consumer goods, building materials, industrial raw materials, and machinery. Myawaddy border trade for fiscal 2022-23 was worth just over US$1.89 billion from April 1 last year to February this year, according to the junta’s Ministry of Commerce.
