Thailand’s National Food Institute (NFI) has called on the country’s food businesses to take the lead and invest in Myanmar; using the neighbouring country as a gateway to the Middle East, Europe and Africa.
Petch Chinabutr, president of the NFI, said that Myanmar will soon pass policies to promote its agriculture industry including an expansion of growing areas, irrigation systems and foreign investment.
He suggested that while Myanmar has an ability to produce basic processed food items, the quality is lower due to out-dated technology and a weak basic infrastructure.
“The Myanmar government wants investors to develop this sector,” he said, and the country is in the process of revising measures to promote overseas investment in the food-processing sector.
The government is drafting a new investment act that will waive corporate income tax for a period of eight years, up from the existing three years, and lowerthe tax on profit made from exports by 50%.
A lucrative trade relationship
Last year, Thailand imported 2.45 billion baht worth of food from Myanmar, down from 3.12 billion in 2010. According to UN data, Myanmar's agricultural industry is its largest source of revenue, totalling 59.1% of the country's GDP. Its main food products include palm oil, vegetable oil, non-alcoholic drinks and rice. The country’s exports have increased by 10% year-on-year with dried nuts, sesame seeds, chickpeas, corn and rice being the top exports.
Once the deep-sea port and industrial estates are built in Dawei, the Southeastern city of Myanmar, there will be further benefits for Thailand as these developments will provide a gateway to the Indian Ocean, the Middle East, Europe and Africa.
Myanmar is a good source of unskilled labour for the Thai food industry, he added, and it will offer cheaper raw materials, machinery, packaging, and logistics costs.