China Traders Face Rising Prices After Myanmar Attacks
By Myo Pa Pa San 12 September 2019
YANGON – Although the security situation in northern Shan State has stabilized, businesses say they are still on the alert about their safety and transport costs, which are rising due to a shortage of trucks.
The attacks by the Ta’ang National Liberation Army, Arakan Army and Myanmar National Democratic Alliance Army on military and civilian targets on Aug. 15 destroyed the Goke Twin bridge on the Muse-Mandalay highway, a major trade route with China.
“It took about five days to repair the bridge and it was reopened on Aug. 20. But there were roadblocks [due to several other bridges being destroyed] between Kutkai and Muse, so we could only fully use the road again after Sept. 5. The bridge can only carry trucks weighing up to 48 tons, so everyone wants to hire those trucks to transport their goods. Therefore, the price went up,” said U Win Aung Khant, the chairman of the Muse Highway Freight Forwarders Association.
He said transport prices had risen since the attack. The service charge for transporting goods from Muse to Mandalay had risen from 60,000 kyats (US$39) per ton to 80,000 kyats. The charge for transport from Muse to Yangon had almost doubled from 85,000 kyats to 150,000 kyats.
He is expecting the prices to fall again when stability returns.
The freight costs for fishery products from Yangon to Muse had more than doubled from 18,000 kyats per ton to 39,000-40,000 kyats, according to Daw Toe Nandar Tin, the vice chairwoman of the Myanmar Fisheries Products Processors and Exporters Association.
The fighting along the Muse-Mandalay highway has reportedly caused more than 900 million kyats in losses for fisheries traders with eels, crabs and other goods ruined.
U Win Aung Khant said Chinese imports still outweighed exports.
About 350 trucks per day enter Myanmar at the Muse checkpoint and head for Mandalay and Yangon carrying goods like fertilizer, clothing, furniture, construction materials, dry goods and fruit.
Since October 2018, exports to China have mainly been rice, sugar, corn and other agricultural goods.
Since reopening, goods from Muse have also been arriving slower.
Ma Aye Chan, an online trader, said rising transport costs had not been a massive problem because she deals with goods in small quantities, but she now has to wait for more than a month. Previously it took only two weeks.
Rising transport costs have pushed up basic commodity prices, according to market sources.
The Ministry of Commerce also said the activity at the Muse trading zone had fallen from more than US$6 million per day before Aug. 15 to US$700,000 after.