The fall in domestic exports was halted mainly due to supplies to distant China. Foreign exchange earnings increased by 4 thousand customs commodity items.

The three-year upward trend in the growth of Ukrainian exports seems to be breaking off. The flow of goods from Ukraine is shallowing for the first time since 2017. The period of a generous increase in the country's foreign exchange earnings in the amount of 9% to 19% per annum is over. The mean time has come.

According to the preliminary results of last year, Ukrainian exports in money terms decreased by 3.5%. In January-November, exporters have already missed $ 1.62 billion (compared to the same period in 2019, according to the State Customs Service).

Contrary to the general negative trend, smart entrepreneurs still manage to increase commodity supplies abroad and increase their foreign exchange earnings. The Chinese market has become the determining factor in their achievement of positive dynamics.

Lucky ones

Last year, export volumes continued to grow in 38 product groups out of the nominal 96. At the end of the year, suppliers abroad of products of three "melliferous" groups - vegetable oils, ores and fertilizers - overcame a steep rise at the end of the year.

The customs value of these products for 11 months exceeded the indicators of 2019 by $ 888 million, $ 507 million and $ 139 million, respectively. At the same time, the most dynamic growth was in the export volumes of fertilizers.

In January-November, their suppliers were able to earn 72% more currency than a year earlier (higher dynamics are now recorded only in two niche, low-money product groups - aerospace and tin).

The record for the dynamics of export growth in 2020 among specific commodity items were, for example, pine and fir timber, chicken breast, ammonium nitrate (fertilizer), sanitary napkins, waterproof ceramic tiles, battery chargers, cigars and many others.

Some of the numerous exporters managed to quickly increase the shipments of such goods abroad by tens and hundreds of times - from near-zero last year's volumes to the current tens of millions of dollars.

In general, we have positive dynamics for 49% of commodity items with a total of more than eight thousandth export nomenclature. The total annual growth in exports for almost 4 thousand "happy" positions in 11 months reached $ 4.69 billion. Now, if not for this notorious collapse in the supply of soybeans, corn, ferrosilicomanganese and, unfortunately, thousands of other types of traditional exports ...

Despite the record dynamics of fertilizer exports last year, experts complain about the still small volumes. The export of Ukrainian chemistry is still at an extremely low level, it could have been many times larger, says Oleg Arestarkhov, director of corporate communications at Group DF.

Reporting on growth, it is important to clearly understand that at the moment the Ukrainian chemical industry has not recovered even to the level of 2010, and in terms of exports, too. The main reason is ineffective industrial policy and, accordingly, Ukraine's inability to qualitatively protect its domestic market.

Under pressure from lobbyists, the country opened its nitrogen fertilizer market to imports, thus weakening all domestic chemicals, he explained to The Page.

The industry's capabilities to modernize production have also deteriorated, the expert noted. At the same time, Ukraine has a colossal export potential in several areas, and chemistry is among them.

“With the right approach, the chemical industry can give an increase in exports by 3-4 times and a share in GDP of up to 8-10%,” added the representative of DF.

We draw the attention of fans of stability to a certain constancy in foreign economic activity during the turbulent 2020. The main commodity groups in Ukrainian exports remained grains, metals, oils and ores.

The most powerful specific sources of foreign exchange earnings are also unchanged - sunflower oil, corn, wheat, iron ore concentrate and iron ore pellets. Together, these five provided about 34% of exporters' income in 2020, even 4 percentage points more than last year.

The share of Ukraine in world exports, for example, of sunflower oil, according to the association "Ukroliyaprom", has already reached 52%. And the total volume of the country's exports has been balancing at the level of 41-43% of the GDP for the second year already.

Successful destinations

Geographically, the greatest growth in demand for Ukrainian goods is still shown by the countries of Asia. The "appetite" of China is especially striking. This country absorbed Ukrainian products almost twice as much as last year, and alone provided 70% of the total increase in our exports last year.

It is thanks to China that the share of the five largest importers of Ukrainian goods increased to 35% in incomplete 2020 (against last year's 25%). The composition of the top 5 "admirers" of imports from Ukraine remained unchanged - China, Poland, Russia, Turkey and Germany. But the volumes of Ukrainian exports to all these top countries, with the exception of China, have decreased. The Celestial Empire independently raised the geographical concentration of Ukrainian exports by 10 percentage points over the year.

Metinvest Group, for example, took advantage of the increased demand for its products from China. As a result, the consolidated revenue of the group in Southeast Asia increased by 72% in 9 months of 2020. And sales of products of the mining segment of the group in this region increased by 2.2 times in January-September - up to $ 741 million.

Yuri Ryzhenkov, CEO of Metinvest Group, said that with the onset of the pandemic, they were able to quickly redistribute sales between markets and take advantage of the active recovery of the Chinese economy - to increase ore shipments and resume sales of metal products in this market.

Other exporters have noted an increase in Chinese demand for a wider range of products. In particular, China last year swallowed three times more Ukrainian beer and barley than a year earlier, 7 times more beef and 11 times more butter (for 11 months, in monetary terms). In barley alone, the earnings of Ukrainian suppliers in China increased by $ 313 million in less than a year.

The capacity of the Asian direction of export is also growing due to supplies to Pakistan, Vietnam, Iran, Korea, Qatar and a number of other countries. In particular, Pakistani imports of goods from Ukraine increased fivefold last year, while Vietnamese imports doubled. It is indicative that so far it has been possible to achieve positive changes in the Asian markets of Ukraine mainly due to the export of products with low added value.

Exporters also open up new sales markets, and the preferences of importers also change. So, Pakistan this year began to buy our wheat - and immediately purchased it for $ 245 million.

The first small consignments of sunflower oil were sent from Ukraine to Hungary and Hong Kong, and iron ore pellets to France, Belgium and the Philippines. In less than a year, China has significantly increased imports of Ukrainian iron ore concentrate and corn - by $ 792 million and $ 449 million, respectively.

Lame positions

Had there not been a catastrophic drop in exports, for example, at least ferrous metals and rapeseed with soybeans, the total Ukrainian exports would have continued to grow last year. Unfortunately, exporters of ferrous metals suffered record "losses" at customs - $ 1.25 billion in 11 months.

Oilseed suppliers were also unlucky - the export of their products decreased by $ 0.74 billion (compared to the same period last year). The “culprits” of the fall were unfavorable conditions on world markets and leapfrog in domestic taxation.

In general, the customs in 2020 recorded a decrease in Ukrainian exports for most commodity groups. And the rate of decline in some of them is generally catastrophic. In particular, for the silk group in January-November we have minus 83% in money terms, for the zinc group - 85%. The customs value of Ukrainian wool, nickel and products from them also fell by 40-45% over the year.

As for the specific names of goods, it should be noted that not even every one of the above-mentioned "honey-bearing" commodity groups was able to meet the expectations of exporters in the crisis year. Despite the fact that the export of vegetable oils is now on the rise, the volume of shipments of certain types of rapeseed oils is falling significantly. A similar negative situation also developed in the segment of titanium ores, etc.

Most of all, exporters missed the currencies in Egypt, Italy and the Russian Federation - approximately $ 0.54-0.57 billion each in January-November (for 11 months of 2019). They also lost half of their income in 2019 in Thailand and Serbia, and a third of the markets of Slovakia and Algeria, even more important for Ukraine. Undersupply to these countries occurred mainly in metals and grains.

Ukraine also failed to increase the export of goods to the European Union. At least for the first 10 months of last year, we have a decrease in earnings in the EU by 15%, according to the NBU. In Asia, Ukrainians now earn more than in Europe. In the traditional until recently markets of the CIS and Africa, the losses are even greater, each of these two regions brings to our country 3-4 times less currencies than saving Asia.

Source