Wed 22 Jun 2011
Filed under: Business / Trade
Rangoon—Around 20 marine-product processing plants in Burma have temporarily suspended their operations, as the US dollar’s decline against the kyat begins to eat into the value of overseas earnings, according to industry sources.Since early June, the dollar has fallen below 800 kyat for the first time in many years, reaching just 785 kyat on the foreign exchange market at one point on Wednesday. The dollar’s drop has hurt exporters, with many companies saying that they are barely breaking even, or in many cases actually losing money.
The appreciation of the Burmese currency against the dollar has been especially hard on the marine export business, according to Win Kyaing, the secretary of the Myanmar Fisheries Federation (MFF), an umbrella body of private-sector fishery associations in Burma.
The owners of fish and prawn farms are struggling even more than most, he said, as they have to deal with the high cost of animal feed. He added that many businessmen in the farmed-fish industry are deeply indebted because they invested heavily in anticipation of a recovery after a recent period of sluggish sales.
“I don’t know how to handle the situation. All our operations are running without any return. So it is better to just suspend them for now,” said a marine-product exporter.
Businessmen from the fisheries industry have officially informed the authorities about the impact of the rising kyat, but the relevant ministries have yet to take any action to deal with the situation, he said.
In 2010, Burmese earned nearly US $550 million from exporting marine product, according to the Ministry of Livestock and Fisheries.
Economic experts inside the country said that if the government doesn’t find a solution to the exchange-rate problem soon, Burma’s exports could come to a complete halt.
“If the situation doesn’t change, most factories will be forced to terminate their business in the next three or four months,” said an MFF official, speaking to The Irrawaddy on condition of anonymity.