FEATURE: Myanmar protests slash imports as shipping lines suspend operations

Strong points

Trade stagnates amid logistical and banking problems

Sales of Thai white sugar in Myanmar decline

Singapore —
Shipping lines suspending operations at Myanmar ports amid widespread protests over the country’s military coup have dampened physical business activity, caused container shipping delays and drastically reduced imports, officials said. trade sources on March 16.

Not registered?

Receive daily email alerts, subscriber notes, and personalize your experience.

Register now

Widespread street protests have put pressure on the logistics sector, with container trucks halting operations, resulting in container shipments getting stuck at shipping ports.

“CMA CGM has suspended new booking acceptances for all incoming shipments to Myanmar since February 20 and from March 8, all employees have been working from home until further notice,” said Mohammad Bilal Khan, an expert. in containers based in Pakistan.

German carrier Hapag-Lloyd has also suspended import bookings from Myanmar until further notice, although Yangon Hapag-Lloyd has taken export orders, Khan added. Maersk also issued a similar notice announcing the suspension of all vessel operations in Myanmar and has not yet specified whether this will be extended, it said.

Logistic challenges

“Destination sales have been really low. There are not enough manpower in Myanmar seaports due to the protests and we cannot move containers to the destination,” a trader said. based in Thailand.

Some regional trading houses have taken a conservative approach by canceling deals or postponing container shipments to Myanmar.

“Initially, we had 20 containers for sale [to Myanmar] but our headquarters didn’t agree because it was too risky. Luckily, we managed to change destination,” said a source from a Japanese trading house.

A Hong Kong-based trader said the company had postponed shipments to May and remained uncertain about the status of container unloading operations in the country.

“Shipments from Thailand to Myanmar have been hampered by the suspension of services. Most of the trade is now handled by trucks,” a Thailand-based source said.

However, while trucks were available, roads were closed, as were banks, which significantly affected trade, the source said.

Impact of imports

The upheaval in Myanmar comes at a time when Asian container markets were already facing disruption due to a shortage of containers and severe congestion at ports.

Container rates for intra-Asian trade lanes have nearly quadrupled since last November and shippers are also switching from sea freight to intermodal, truck and rail transport to increase reliability and ensure delivery, market sources said. .

Merchants said the closure of banks in Myanmar has also created difficulties, especially for processing payments in US dollars.

“Banks are closed and it is difficult for buyers and traders to transact. We are having difficulty transacting with our Burmese buyers,” said a Singapore-based trader.

Myanmar is one of the 10 largest importers of Thai white and refined sugar, buying 115,589 tonnes in 2020, but several sugar traders said they expected factory closures and lower production. demand from end users in Myanmar to reduce the demand for Thai sugar imports in the current. year.

Despite lower sugar production in the 2020-21 marketing season, Thai physical cash premiums have been on a downward trend due to lower demand from China, Vietnam and Myanmar.

Thai 45i refined sugar for fast shipping was priced at a premium of $51/tonne to the London No. 5 March futures contract on Feb. 11, an eight-month low; it was last priced at this level on June 24, 2020. The premium was most recently priced at $54/mt over May futures on March 15.

“Now that many factories in Myanmar are closed and they don’t know when they will reopen, there is no point for them to import Thai sugar now,” said a Hong Kong trader.