The Most Important Markets are Shifting towards Asia

30 may 2018 | Gudok

Seeing how the US and the EU have been imposing sanctions on Russia it would be natural to expect that Russian exports to those countries would have declined in recent years. However, foreign trade statistics shows that this hasn't exactly been the case. Ksenia Sukhorukova, Head of the Department for Foreign Economic Activity of the Analytical Center, told a Gudok correspondent about the recent changes in trends and directions of Russian exports.

Ksenia Bannikova
Ksenia Bannikova
Department for Foreign Economic Activity

According to the data of the Federal Customs Service of Russia, between 2013 and 2017 Russian exports to the EU fell from $ 283.2 billion to $ 159.6 billion. The share of the EU in total exports fell from 53.8% to 44.7%. Exports to the US also fell from $ 11.2 to $10.7 billion, however, the share of the US in total exports actually increased from 2.1 to 3%. In January through March 2018 the share of the EU and the US in total Russian exports was estimated at 48.2% and 2.6% respectively, Ms. Sukhorukova noted.

"Russian suppliers have been trying to switch from the EU to Asia region countries. However, some European nations still remain among the top consumers of Russian goods," the expert continued. In her opinion, it would be wrong to contend that the sanctions have resulted in a complete severing of trade relations between Russia and its foreign partners; in fact their total number has not declined. "In 2013 the key destinations for Russian exports were the Netherlands, Italy, Germany, China, Turkey and Ukraine. In 2017 the countries that were still major consumers of Russian exports included China ($ 38.9 billion or 10.9% of the total), the Netherlands ($ 35.6 billion or 10%), Germany ($ 25.7 billion or 7.2%), Belarus ($ 18.4 billion) and Turkey ($ 18.2 billion)," Ms. Sukhorukova said.

The expert sees several ways to develop Russian exports. One of them is reducing the non-tariff barriers for Russian suppliers to enter into foreign markets. "A lot of non-raw materials non-energy markets were closed to us because of sanitary or veterinary restrictions, specifically these were the groceries and agricultural markets. These barriers are removed through negotiations between countries. A major breakthrough in 2017 was the opening for Russian suppliers from 49 regions, including Belgorod, Bryansk, Voronezh, Moscow region, Bashkortostan and Tatarstan, of the Chinese market of even hoofed cattle and products from them. These territories were found to be free from the foot and mouth disease without the need for vaccination," she explained, saying the Chinese market was highly attractive for Russian companies because of its sheer size.

Another mechanism for promoting exports, according to the expert, is the development of new exports of services. "It is about tourism, medical, education and transport services as well as IT services. These services can be quite attractive to foreign customers for a number of reasons. First of all because of relatively lower cost due to the depreciation of the ruble. Second, Russia can offer highly skilled staff and unique technologies, for example, in health care. The government plans that by 2024 the total Russian exports of services should have grown to $ 100 billion a year," she said.

Source: Gudok