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COVID-19: ASEAN region update for Australian exporters

Key points

  • Indonesia – The Jakarta regional government has decided to extend its lockdown protocols from the planned end date of June 4, and will apply transitional protocols until the end of June. During the transition, an increasing range of business and other facilities will be permitted to operate, generally at half capacity. Permitted transport will also be incrementally broadened over the month.

  • Philippines – Philippine Airlines will have special flights for passenger and cargo from Sydney to Manila on June 12 and June 27.

  • Myanmar – The Australia-Myanmar Business Chamber has been working with the Myanmar Government to facilitate the return of Australian business people to Myanmar. Returnees will be required to present a COVID-19-free test certificate on arrival, and undertake two weeks of self-quarantine – the first week at a designated hotel and the second week at home.

  • Singapore – On June 6, 42 Australian food exporters and 16 Singaporean buyers met at Food Innovation Australia Limited’s (FIAL) Virtual Business Matching event to facilitate the export of products such as dairy, processed food, meat and organic food. Large supermarket chain NTUC Fairprice is still seeking new Australian brands to bring into market and its buyers joined the FIAL session to source new producers in the dairy, frozen and ambient categories.

  • Thailand – Lockdowns are gradually easing with Thailand’s case load remaining steady. Government stimulus measures are ongoing, with financial support measures targeting SMEs and job creation.

  • Vietnam – The Ministry of Agriculture & Rural Development (MARD) has allowed live pigs to be imported for the first time.

Supply chain and logistics

  • Vietnam – Disruption to agricultural supply chains is affecting traditional commodity trades. Australian companies are receiving enquiries for frozen pork and offal as logistics issues impact supply from the US.

Agribusiness and food

  • Malaysia – New Ministry of Health guidelines will allow Malaysian open-air markets to resume operations. The closure of open-air markets since March 18 has affected national food supplies and contributed to inflated costs of household goods and groceries.

  • Myanmar – Border restrictions with China and Thailand have led to over-supply of fruits and vegetables, and prices at major wholesale markets in Yangon remain low. A suspected African swine flu outbreak in Shan State has also led to a temporary prohibition of all trade in pork meat and pork-related food products starting from June 1 in Inle Region, Shan State.

  • Singapore – Importer Foodtrade reports a large decline in seafood demand (oysters, abalone live and chilled) due to reduced orders from the food service channel. Foodtrade is cautious about taking on new seafood brands, but remains interested in Australian suppliers in the mid to long term once lockdown measures are lifted.

  • Thailand – Food and agricultural exports have risen to almost 20% of total shipments in April, driven by a rise in high-value processed foods. Australian suppliers to food manufacturing companies may find opportunities to support the growth of Thailand’s food processing sector.

  • Vietnam – The Ministry of Agriculture & Rural Development has allowed live pigs to be imported for the first time. Live pigs will be put in quarantine for 30 days on arrival. The import is in response to elevated domestic pork prices, caused by COVID-19-related disruptions.

E-commerce and retail

  • Indonesia – Digital payments platform LinkAja has partnered with the Indonesian Government to launch online payment solutions in 18 traditional marketplaces throughout Jakarta – seen as high risk for COVID-19 transmission. The service allows users to provide a shopping list to their local traditional market, receive a QR code to facilitate payment, and have their goods delivered to their door.

  • Malaysia – A number of malls within the Kuala Lumpur vicinity have resumed full operations with contact tracing, social distancing guidelines and stringent standard operating procedures in place. A recent poll found 93% of retail industry players are seeking to establish an online presence to complement their bricks-and-mortar businesses.

Technology

  • Indonesia – President Joko Widodo has called for more aggressive tracking of COVID-19 infections and contact tracing through digital tools, replacing manual processes. He also called for related data to be organised through a single portal to simplify policy development and government decision-making. The Tourism and Creative Economy Ministry is also holding a competition, Gelora 2020, for local game developers to gamify COVID-19 public education efforts.

  • Vietnam – The online payments sector has been a major beneficiary of the COVID-19 pandemic. According to some major mobile payment platforms (VNPay, Momo and Zalopay), the number of online transactions rose by three to five times in recent months.

Mining, resources and infrastructure

  • Indonesia – Positive developments were reported on several major oil and gas projects. This included an official update that land acquisition for the 841-hectare Tuban oil and petrochemical processing project in East Java is 92% complete. Pertamina subsidiary Elnusa also said it expects to complete seismic surveys of the huge Jambi Merang work area by mid-July 2020.

  • Philippines – The Philippines Government remains committed to completing five big-ticket infrastructure projects in 2020 despite delays and budget reallocations. These are: North Luzon Expressway Harbor Link; the new passenger terminal at the Clark International Airport by July; Metro Manila Skyway Stage 3 project by December; extension of the Light Rail Transit line 2 to Rizal province; and the bridge connecting the Bonifacio Global City with the Ortigas business district. Projects slated for completion in 2021 are two new bridges across Pasig River, Bicol International Airport, and rehabilitation of the Metro Rail Transit line 3.

  • Thailand – A deal was recently announced for the construction of the new U-Tapao Airport and Eastern Airport City Projects by BBS Joint Venture (which includes Bangkok Airways, BTS Group Holdings and Sino-Thai Engineering & Construction). This illustrates a resumption in progress around Thailand’s flagship infrastructure projects.

Advanced manufacturing and defence

  • Malaysia – The manufacturing sector showed signs of stabilisation midway through the second quarter, with rates of reduction in output, new orders and employment all easing considerably. The headline IHS Markit Malaysia Manufacturing Purchasing Managers’ Index rose sharply to 45.6 in May, from April's survey-record low of 31.3.

  • Malaysia – The Royal Malaysian Air Force will set up a squadron for unmanned aerial vehicles (UAVs or drones) operations in the near future, creating potential commercial opportunities for Australia’s defence industry.

  • Thailand – Manufacturing investment has remained relatively strong in Thailand compared to its ASEAN neighbours. Major electronics manufacturers such as Mitsubishi Electric and Toshiba have confirmed their ongoing re-investment plans, and 33 new electronics factories accounting for 25,000 jobs opened during Q1 2020. The closure of Nissan’s plant in Indonesia will also make Thailand its only manufacturing base in ASEAN, with a strong focus on electric vehicles.

Information provided by Austrade: https://www.austrade.gov.au/news/covid-19/updates/asean


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