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Government Steps in to Limit Re-Exports of Sugar

The Union Govern­ment is stepping in to control sugar re-export and call for invest­ment to help the industry get on its feet, according to U Kyaw Win, Union Minister of Planning and Finance.

The Union Minister emphasized the need to stamp out re-export in favor of stronger national production and the pro­motion of value-added industries during a UM­FCCI meeting led by Vice President U Myint Swe.

“We welcome proposals for investment in cane cul­tivation and sugar manu­facturing. Both are un­derdeveloped and needed to effectively minimize imports and eliminate re-exports. The process is long-term but offering in­centives to stimulate pro­duction must begin now,” U Kyaw Win said.

The term re-export means importing a value-added good and exporting it to a larger market with­out contributing to the chain of supply.

The Ministry of Com­merce had earmarked 14 commonly re-exported commodities including sugar in dire need of for­eign investment and development.

Sugar manufacturing in Myanmar is minute because itself, it is a very expensive process. The machinery is very costly and especially pricey to operate. Local farmers lack the incentive to grow sug­arcane because factories are so few and far between. Therefore, rates of cane cultivation and sugar man­ufacturing in Myanmar are acutely low compared to its neighbors.

“In Myanmar, there are 20 sugar factories and the estimated cost of set­ting up a sugar factory is approximately $100 mil­lion. Thailand annually produces 10 million tons of sugar while Myanmar manages 400,000 tons. U Win Htay, Vice President of Myanmar Sugar and Sugarcane Entrepreneur Association, told Myan­mar Business Today.

The government aims to mitigate the situation by placing controls and tariffs on imports while trying to attract foreign investment to develop do­mestic industry.

An acre of sugarcane yields 20 tons of sugar valued at K1 million. If more sugar factories are built to support the de­mand for cultivation, sug­arcane production could become more profitable than rice.

Source: Myan­mar Business Today

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