May. 17, 2023
Hello everyone, this is Thant Sin from Myanmar Max Agro Service Co., Ltd. It's my pleasure to share with you the basic information of Myanmar's pesticide market again on the Agropages, hoping to be any helpful to everyone!
1 Basic Overview and Main Crops
2 Overview of Pesticide Distribution Patterns in Myanmar
3 China's Export of Pesticides to Myanmar from 2018 to 2022
4 Pesticide registration
5 Business environment
6 Summary
1 Basic overview and Main Crops
1.1 Geographic location
Myanmar is one of the member states of ASEAN, located in the west of Indochina Peninsula, bordering the Andaman Sea and the Bay of Bengal in the southwest, India and Bangladesh in the northwest, China in the northeast, Thailand and Laos in the southeast, with an area of 676,578 square kilometers. It is the country with the largest land area in Southeast Asia. The population is approximately 54.58 million, with a total of 135 ethnic groups. More than 85% of Burmese people believe in Buddhism, and about 8% of people believe in Islam.
Figure 1 Myanmar Map
Myanmar is higher in the north and lower in the south, with a horseshoe shaped terrain structure. The east, north, and west are all high mountains and plateaus, with a plain in the center from north to south. The agricultural land area accounts for about 20% of the land area (130,000 square kilometers), and the forest area accounts for about 43.7% (285,000 square kilometers).
1.2 Climatic conditions
Myanmar has a tropical monsoon climate. Most of the territory located in the south of the Tropic of Cancer is tropic, and a small part located in the north of the Tropic of Cancer is subtropics. The mountains and plateaus surrounding Myanmar in the east, north, and west are like barriers, blocking the southward movement of cold air from the Asian continent in winter. However, due to the lack of mountain ranges in the south, warm and humid air from the Indian Ocean can flow unobstructed. Myanmar has a good ecological environment and fewer natural disasters.
The temperature in Myanmar varies little throughout the year, with an average temperature of 20℃- 25℃ in the coldest month (January) and 25℃- 30℃ in the hottest month (between April and May) . The annual temperature range in various regions is not significant. Myanmar has abundant rainfall, with rainfall mainly concentrated in the three months (June, July, and August) when the southwest monsoon is prevalent, followed by May, September, and October. Most areas have an annual rainfall of over 4,000 mm, however, the central part being a rain shadow area with an annual rainfall of less than 1,000mm, making it a dry area in Myanmar. The rainfall from May to October accounts for about 90% -95% of the annual rainfall. Due to the influence of the monsoon, Myanmar can be divided into hot season (March to mid May), rainy season (mid May to October), and cool season (November to February of the following year) throughout the year.
1.3 Main crops
Agriculture is the pillar of Myanmar's national economy, with an agricultural population accounting for over 60% of the country's population and an agricultural output value accounting for approximately 50% of the national economy. Myanmar has approximately 12 million hectares of arable land. The net planting area is 11.33 million hectares, with irrigated arable land accounting for 18.5% of the total net planting area. There are still over 6 million hectares of vacant, idle, and wasteland to be developed. The main crops in Myanmar include conventional crops such as rice, wheat, corn, beans, and industrial crops such as rubber, sugarcane, cotton and palm.
In recent years, legumes have surpassed rice as the main agricultural product for Myanmar's export and foreign exchange earnings. In the 2018 transitional fiscal year, Myanmar's agricultural product export value was $534 million, of which legumes export value was $280 million, accounting for more than half of the agricultural product export value, followed closely by rice export value, about $164 million.
1.3.1 Area harvested and Production
According to FAO data in 2021, the top five crops in area harvested were rice, beans, sesame, peanut and corn; and the top five crops in production were rice, sugarcane, vegetables, legumes and corn.
Figure 2 Area harvested and Production of main corps in Myanmar (FAO, 2021)
1.3.2 Calendar and planting area
Rice
Two seasons per year. Mainly distributed in the southern, also in the northern and eastern.
Figure 3 Calendar and planting area of rice in Myanmar
Corn
Two seasons per year. Mainly distributed in northern and eastern.
Figure 4 Calendar and planting area of corn in Myanmar
Peanut
Two seasons per year. Mainly distributed in the central plains area.
Figure 5 Calendar and planting area of peanut in Myanmar
Soybean
One season per year. Mainly in the eastern, also in the northern and southern.
Figure 6 Calendar and planting area of soybean in Myanmar
2 Pesticides Distribution Patterns in Myanmar
2.1 The largest pesticide company in Myanmar is AWBA, with a market share of 50%-60%. Its solid market position is difficult to shake in a short period of time; For other top five companies, each one is highly controversial and claims to be in the top five.
2.2 Multinational companies do not have their own sales channels in the local area, mainly relying on local companies for distribution. Multinational corporations have relatively low influence and penetration in the local area, and local market mainly focus on generic products.
2.3 More and more Chinese companies have participated in the local market in the past decade, but it is difficult to rival the local companies.
2.4 Small-scale farm is the main form of Myanmar agriculture and most pesticides are packed within small packing below 5kg/liters. Pesticide usage level is very low and backward
, which urgently requires strong guidance from the government and companies.
2.5 The pesticide varieties used in Myanmar are mostly old products, and most local companies have poor promotion capabilities for new products and AWBA products are their flagship products to follow.
2.6 Border smuggling of pesticides was briefly curbed during the three years of the COVID due to border blockade, but smuggling still held a relatively large share before and after the COVID.
2.7 Except for the special period of 2021 and 2022 (coups and exchange rate fluctuations), pesticide sales are mainly relied on credit.
2.8 The government's supervision system is weak; smuggling pesticides, pesticides wit hidden ingredients, and even substandard pesticides still exist.
3 China’s Pesticides Export to Myanmar (2018 - 2022)
From 2018 to 2022, the quantity and amount of pesticides exported from China to Myanmar showed an increasing trend year by year (excluding 2021), and the growth rate was significant.
Among the three types of pesticides, herbicides are the biggest, accounting for about 50% of the total export volume; Secondly is insecticides, which account for over 40% while fungicides is the lowest, accounting for less than 10%.
Figure 7 2018-2022 Pesticide export quantity from China to Myanmar
Figure 8 2018-2022 Pesticide export amount from China to Myanmar
4 Pesticide registration
The main regulations related to registration in Myanmar include:《Pesticide Law》,issued on 20th January, 2016.
Registration Authority: The Pesticide Registration Board (PRB) is established by the Ministry of Agriculture and Irrigation, with the Vice Minister serving as the Chairman, the Director General of the Agriculture Department as the Secretary, the Director of the Plant Protection Division as the Joint Secretary, and relevant department heads and experts as members; The Pesticide Registration Committee establishes the Pesticide Technical Committee (PTC), chaired by the Director General of the Department of Agriculture, with the Director of the Plant Protection Division serving as the Secretary; experts from other relevant departments approved by the Ministry of Agriculture and Irrigation serve as members and determine their job functions and responsibilities.
The agricultural department is responsible for the office work of the Pesticide Registration Committee.
4.1 Core registration documents
4.2 Registration duration and validity period
Old product registration (P): 1.5 to 2 years, with a registration validity period of 5 years; Before expiration P need to be extended to F, with a registration validity period of 10 years.
New product registration: Phase 1 (E), 1.5 years, with a registration validity period of 2 years; Phase 2 (E-P), 2-2.5 years, with a registration validity period of 5 years.
* P means Provisional Registration; F means Full Registration; E means Experiment Registration.
4.3 Registration process
Online application - PRB preliminary review (once materials are complete, registration fees and testing fees are paid) - PTC review (if any issue,notification for modification) - Standards and samples submission for laboratory testing - PRB meet to determine the list of registration passes and fails - Announcement to the public
4.4 Advantages and disadvantages of pesticide registration in Myanmar
Advantages: Low data requirements, relatively fast issuance, low price, long validity period, simple renewal and a validity period of 10 years after renewal; The first new product registration has 3 years of protection period.
Disadvantages: A registration certificate can only have one commercial name. If multiple product names are required, multiple registration certificates are required. The registration policy changes quickly, which sometimes catches everyone off guard.
5 Business environment
5.1 Overall
In 2019, Myanmar's GDP was approximately $68.7 billion, with a per capita GDP of $1295.
According to the data of International Monetary Fund, by the end of the 2018/2019 fiscal year, Myanmar's foreign exchange reserves were approximately $5.667 billion, representing an expected import volume of approximately 3.6 months.
Currently, financial institutions such as Moody's, S&P and Fitch have not rated Myanmar's sovereign debt rating.
China is Myanmar's largest trading partner, largest export market and largest source of imports.
5.2 Investment environment
From the perspective of attractive investment environment, Myanmar's competitive advantage is mainly reflected in the following aspects:
a.The domestic political situation is relatively stable (no longer applicable).
b.Rich natural resources and cultural heritage.
c.The geographical location is superior, adjacent to the three densely populated emerging markets of China, India and ASEAN. It is an important channel connecting East Asia and Southeast Asia, with great market potential.
d.Rich labor resources and relatively low costs.
e.Currently, it still enjoys the Generalized System of Preferences (GSP) treatment granted by developed countries such as the European Union and the United States.
f.There is significant development space for traditional industries such as infrastructure, as well as new industries such as e-commerce and mobile payments. In recent years, the government's willingness to attract foreign investment and its efforts to open up to the outside world have continuously increased. The promulgation and implementation of a series of laws such as Myanmar's new Investment Law, Investment Rules and Company Law have gradually improved the foreign investment environment.
According to the 2020 Business Environment Report released by the World Bank, Myanmar ranks 165th out of 190 economies and is one of the 20 countries with outstanding achievements in improving its business environment, with start-up enterprises rising from 152th to 70th.
On February 1st, 2021, Myanmar launched a military coup: after the coup, some regions of Myanmar have been in turmoil, resulting a sharp decline in international image and the continuous withdrawal of foreign investment. The currency experienced a significant depreciation in 2022. As of now, the currency is relatively stable, but the domestic market has been unstable.
5.3 Company Registration
5.3.1 Registered Name
After the investor drafts the company name, the service company is entrusted to apply for approval of the company name to the government DICA registration authority. If the same name already exists, it must be changed until the computer determines that it has not been registered before. To register a Myanmar company, need to provide the company name in English and Burmese, and the name should end with Ltd or Company Limited.
5.3.2 Registered Shareholders, Directors and Company Secretaries
Registering a Myanmar company allows both individuals and companies. There is no limit to the number of shareholders in a general limited company, and one person can also register the company. Foreigners in Myanmar funded companies can also serve as a legal representatives.
5.3.3 Registered capital
Myanmar companies do not have the lowest registered capital requirements, and registered capital does not need to be in place. Generally, registering a trade oriented company with a pure foreign investment for wholesale needs a registered capital of $5 million, for retail of $3 million and for joint venture of $50000.
5.3.4 Business scope
According to Myanmar new company law, if foreigners want to import and sell in Myanmar, they can establish a joint venture. Registering a construction company requires applying for a construction license, and currently only local companies in Myanmar can apply. Many developers entrust local companies in Myanmar to do construction business. If the project does not have architectural components (only installation, electrician, design, decoration, etc.), a 100% sole proprietorship company can be registered without applying for special approval.
5.3.5 Registered address
Registering a Myanmar company requires a local address. Productive enterprises need to have an actual office address and cannot use a virtual address. Virtual addresses can be provided in the first three months, but must be transferred to the actual address after three months.
5.3.6 Registration documents
a.Proposed company name (in English)
b.Individuals: Copies of shareholder/director identification documents (such as passports, ID cards), director emails and identification of address.
c.Company: Complete set of company registration documents, director's passport and company resolutions (All must be certified by the Myanmar Embassy in China).
Note: All the above documents need to be translated into Burmese.
5.4 Enterprise tax
Corporate income tax: 25%
Import pre tax: 2%, which can be offset against year-end income tax.
Value added tax: exemption for agricultural products.
6 Summary
As mentioned above, Myanmar is a agriculture-based country with nearly 12 million hectares of arable land, accounting for only 20% of the total land area, while the rate in neighboring countries such as Thailand and Vietnam are 39% and 32%, with a huge amount of arable land to be developed. However, on the other hand, in recent three years since the coup, Myanmar's political situation, economy, exchange rate and normal living order have faced unprecedented challenges. The constantly changing policies often caught business operators off guard and at a loss.
Therefore, facing the current environment, I suggest that foreign-funded companies must carefully consider and prioritize risk control before starting up. If you do not have any risk control capabilities based on your own assessment, you should not start but maintain attention; Secondly, in team building, it is necessary to have sufficient thinking and attention, select suitable people and establish a reasonable incentive mechanism; Last but not least, do not rush to pursue profits. The cultivation of the market requires long-term and persistent efforts, which cannot be achieved in the short term. If this cannot be achieved, I still suggest that everyone not blindly invest.
Finally, I wish everyone all the best!
If you have any other questions about the Myanmar pesticide market, you can send me an email. My email is thantsintop@gmail.com.
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