Bangladesh-Myanmar cross-border trade halts as conflict escalates in Rakhine

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Almost all import and export activities with Myanmar through the Teknaf land port have come to a complete halt due to the intense fighting between the Myanmar Junta forces and the Arakan Army in Rakhine state, according to port authorities.

Jasim Uddin Chowdhury, general manager of United Land Port Teknaf Limited that operates Teknaf land port, told The Business Standard that cross-border trade activities have been dwindling since December last year after the latest round of conflict began on 13 November. But all trade activities have now come to a complete halt amid intense fighting.

Import of ginger, the primary import from Myanmar, has been halted for nearly two months now among other products, he said.

Bangladesh regularly imports ginger, garlic, and onions from Myanmar via the Teknaf land port. Additionally, a wide range of products such as fish, wood, pickles, spices, coconuts, and electrical goods are also transported to the country through this port.

According to commerce ministry data, Bangladesh has an annual demand for 450,000 tonnes of ginger. With local production falling short at less than 200,000 tonnes, the remaining demand is met through imports, primarily sourced from Myanmar, China and India, with the majority originating from Myanmar.

In the first 11 months of FY23, Myanmar supplied 80,218 tonnes of ginger and approximately 600 tonnes of garlic.

According to a report from the Bangladesh Trade and Tariff Commission, Bangladesh exports various items, including potatoes, toys, plastic goods, garments, aluminium, medicine, cosmetics, chips, and assorted food items.

However, the export volume remains relatively low. Specifically, exports measured at 0.04 lakh tonnes in FY20, 0.03 lakh tonnes in FY21, and 0.11 lakh tonnes in FY22.

In contrast, imports from Myanmar amounted to 1.98 lakh tonnes in FY20, 0.75 lakh tonnes in FY21, and 2.33 lakh tonnes in FY22 during the same period.

People concerned about trade with Myanmar said the volume of legally imported goods is nearly matched by goods entering Bangladesh through smuggling channels.

In the ongoing conflict, another 64 people, including personnel of Myanmar's Border Guard Police, army and customs, as well as civilians, sought refuge in Bangladesh yesterday, crossing through Cox's Bazar's Ulubaniya union after facing rebel attacks. This brings the total number of fleeing Myanmar BGP, customs, army, and civilians in Bangladesh this week to 328, as confirmed by Md Shariful Islam, public relations officer of BGB headquarters.

Jasim Uddin Chowdhury said many importers are facing financial losses with trade coming to a standstill. Despite the issuance of many bank drafts, Myanmar traders are unable to export goods due to the country's instability. 

He said import-export transactions at this port are not conducted via the Letter of Credit (LC) system, but rather through bank drafts. Due to the closure of banks in Myanmar, bank drafts cannot be processed, leading to a complete halt in imports. However, despite significant risks, Myanmar traders occasionally dispatch one or two trawlers, albeit in minimal quantities. As a result, the government's revenue from the port has also plunged.

The most recent arrival of a trawler carrying coconuts, dried fish, and other products from Myanmar took place on 6 February, the post official said. 

Stakeholders suggested that the quantity of ginger previously imported from Myanmar should now be sourced from alternative countries. Failure to do so could lead to significant market volatility due to the prolonged halt in ginger imports.

The Tariff Commission's report highlights the significant role of cross-border trade between the two countries in ensuring the supply, normalisation, and stability of ginger prices in the domestic market.

Nevertheless, market analysis data from the Trading Corporation of Bangladesh (TCB) reveal that domestically sourced ginger is priced at Tk250-280, while imported ginger is priced up to Tk250 in local markets. 

According to TCB data, there was no notable volatility observed in the ginger market throughout the last month.