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Insight | Time: Mar 16 2021 11:28AM
Impacts of Myanmar's violence on apparel orders
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Numerous Chinese enterprises investing in Myanmar apparel mills
There are more than 600 apparel mills in Myanmar, of which foreign investment and joint venture account for more than a half. Chinese enterprises are the main force, accounting for about 60%, and there are about 300 enterprises from China, which are mainly concentrated in Yangon. On Mar 15, the news reported that a number of Chinese-owned apparel mills in the Laydaya Industrial Zone in Yangon, Myanmar, have been smashed, looted, and burned. The vast majority of the injured enterprises came from the textile and garment industry. According to news, a total of 32 Chinese-invested factories have been vandalized in attacks in Yangon, Myanmar, with property losses reaching 240 million yuan ($36.89 million), the Chinese Embassy in Myanmar said on Monday.

Myanmar remains turbulent, and China's investment in Myanmar's apparel mills is affected to some extent. Myanmar's apparel exports play a certain role in the world, and orders may flow to other markets under the turbulent situation. Myanmar's apparel exports in 2019 were around 5 billion USD, which has been growing in recent years. Its main export markets are Japan, Germany, the United Kingdom and other markets. If Myanmar's market orders are affected, then the other markets are Southeast Asia, India and Bangladesh. What are Myanmar's apparel export changes and main export markets in recent years?

Myanmar's apparel exports grew rapidly, with major exporting markets in Japan and Europe

In 2015-2019, Myanmar's apparel (HS code 61+62) export value increased year-by-year, with an average annual growth rate of 43.7%. Especially in 2016, the growth rate accelerated and dropped to 22.1% in 2019. In recent years, with the lifting of economic sanctions by EU and US, Myanmar's advantages of abundant labor resources and low cost have been highlighted. In addition to the GSP treatment given to Myanmar by EU and US, the labor-intensive processing and manufacturing industry represented by the textile and apparel industry has been booming in Myanmar. In the transitional fiscal year of 2018, Myanmar's textile exports reached 2.225 billion USD, accounting for 25.2%, ranking first. According to reports, although the global economy was affected by COVID-19 in 2020, Burma's export performed well. According to statistics, the import and export grew in fiscal year 2019/20. In 2019, the proportion of Myanmar's apparel exports in total commodity exports rose to 27.9%, which showed the importance of apparel in Myanmar's export market. In terms of variety, knitted garments accounted for nearly a quarter of Myanmar's apparel exports, and woven garments accounted for the largest proportion.

In terms of apparel export market, Japan accounted for the largest proportion, accounting for 22% in 2019, followed by EU, Germany, Spain, the United Kingdom, the Netherlands, etc. It can be seen that Myanmar's main apparel export markets were Japan and Europe. In the process of gradual recovery of global economy, Myanmar, one of the choices of apparel orders, saw frequent incidents, such as the "coup" in early-February and violence yesterday. The turbulent situation may make some apparel orders hesitant or turn, especially in Japan and EU, which are its major export markets where need observation on orders.
[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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