Chinese fruit traders are cutting out the middleman – extending their reach deep into upper Myanmar to deal directly with fruit farmers, rather than with brokers at the Muse border post.
The Chinese traders are also opening their own retail fruit stores in Muse, Shan State.
Myanmar companies based in Muse township normally buy fruit from growers in Tada-Oo, Myittha and Kyaukse in Mandalay Region, Monywa in Sagaing Region, and Yangon, Ayeyarwady and Bago regions for export to China.
“Now, Chinese brokers are connecting directly with the farmers, giving them money, equipment and seeds. This is making life hard for small local traders,” said U Sai Khin Maung, secretary of the Muse fruit retailers association.
“They profit on both sides of the border, buying fruit cheaply in Myanmar and selling it on in China.”
Farmers are happy to do business with the Chinese brokers because they don’t need to invest into their farms, he said. “They can continue to farm their own land with Chinese technology and they have access to a good market,” he said.
However, he warned that Chinese buyers could later lower the prices they were prepared to pay. His organisation might not then be in a position to help the farmers, he said.
Chinese traders first entered the Muse trading zone in 2012, then slowly took over the fruit market, one of the largest areas of trade between the two countries, he said.
The fruit business is booming in Muse, with workers from all over Myanmar making good money from around 1000 trucks that deliver daily, said Muse trader U Aike San.
“Local Shan people aren’t interested in this kind of work. Workers have accounts with the Myanmar Economic Bank in Muse. If they work for more than five years their families receive healthcare support and other benefits,” he said.
Work involves setting out the fruit from each truck for customs inspection.
“China is very prominent here and influences all the markets in Muse. Chinese businesspeople are engaged in both imports and exports,” said the owner of Khwar fruit retail shop.
“The brokers, owners and shareholders are all Chinese, but the ordinary workers are Myanmar.”
Bilateral trade between the two countries stood at $9.681 billion in fiscal year 2015
China is by far the main destination for Myanmar exports. It represented 37.3 percent of total exports last fiscal year. Thailand was the second-largest destination with 32.2pc, followed by Singapore with 6.1pc, India with 6.0pc and Japan with 4.4pc, according to Myanmar’s Central Statistical Organization.
In the fiscal year 2013-14, over 60pc of Myanmar’s total border trade of more than $3 billion poured in from China via Muse, making it the highest-value border trade point between the two countries.
Indeed, the growing gateway city, a hub for resources, construction materials and consumer goods, is Myanmar’s most important border trade post, seeing $189 million in cross-border trade this January alone.
Source: Myanmar Times