First overland barter-trade agreement signed
2019-08-01 14:21:04 / Myanmar Agro Food Exhibition
Aung Htay Hlaing/The Myanmar Times
An agreement for overland barter trade has been signed between Mandalay Rice Development Company (MRDC) and Kunming Green Color Trade CoLtd from China’s Yunnan province in which the former will trade 100,000 tonnes of rice to the latter for an equivalent in other trade goods starting next month.
The undertaking, which was signed on July 25, would be the first such agreement between private companies following the signing of a memorandum of understanding between the Myanmar and Chinese governments on the overland barter trade earlier this year.
MRDC managing director U Sai Kyaw said both companies would be the intermediaries for goods to be traded under the barter system. “Chemical fertilisers, construction material, electric appliances andagricultural machinery manufactured from Yunnan province can be imported with a 5 percent discount on the market price,” he said, adding that both sides were now awaiting the greenlight from their respective governments to start trading.
U Sai Kyaw said MRDC will be exporting the equivalent of up to 100,000 tonnes rice stored rice in Muse or newly harvested rice. “Myanmar long-grain rice, which is very hard to sell due to high tariffs in European countries, will be prioritised,” he said.
Rice traders that used to sell their rice in the overland border trade would now need to conform to the new system. “There are some challenges because it is now through barter trade, we’ll have to help solve the issues that arise from the farmers and rice millers,” U Sai Kyaw said.
He said interested companies can import goods from China in partnership with MRDC while any company interested in selling their rice produce can also partner it. “This is a win-win situation for both sides,” U Sai Kyaw said.
The barter arrangement is expected to benefit local traders and balance trade. Due to volatile import tariffs imposed on Myanmar goods by the Chinese authorities, traders often resort to smuggling goods across the border. This, in turn, leads to frequent border checks and trade bans, which disrupts trade and results in losses. – Translated
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