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Export trends: Ukraine is breaking records in world markets, Asia is increasing imports of Ukrainian products

Exports continue to save the Ukrainian economy. 2020 was marked by several high-profile records in the foreign economic sphere. Thus, records of the decade were set in terms of the export of Ukrainian goods to Asia and, in particular, China. From now on, these two bars in the eastern direction will loom at an altitude of $18.5 billion and $7.11 billion, respectively.

Despite the coronavirus crisis, Ukraine also set a historic record for agricultural exports. On "edible" products domestic exporters, according to the State Customs Service, earned $22.24 billion last year. The largest shipments of sunflower oil and poultry meat to foreign markets in the history of our country were also recorded—6.9 million tons and 431,000 tons, respectively, the Institute of Agrarian Economics notes.

In fact, there were many more export records set in 2020. Record deliveries of Ukrainian products for the year to 59 countries of the world were reported (according to official statistics of the last four years). Shipment volumes to 13 of these countries are estimated in nine-digit amounts in foreign currency.

In addition to China, Romania, Great Britain, Lithuania, Tunisia, Morocco, Pakistan, Libya, Uzbekistan, Vietnam, Jordan, Yemen, and Qatar also set records for exports from Ukraine above the $100 million mark. Our total exports to these 12 countries exceeded $4.5 billion in value.

Hong Kong, Oman, Kuwait, Slovenia, Maldives, and other countries were also included in the "book" of export records. However, local records were set here, because the volumes of shipments from Ukraine in these directions were clearly lower.

It is noteworthy that last year, exports from Ukraine, in comparison with the indicators of 2019, increased to 96 countries of the world. At the same time, a record increase in foreign currency for the year was formed again by China—$3.52 billion. But the highest growth rates of imports from Ukraine were demonstrated by other countries. If the Celestial Empire doubled the consumption of Ukrainian goods in a year, then, for example, Pakistan—more than 5 times. And to the Dominican Republic and other exotic countries, our export volumes soared dozens of times.

At the beginning of 2021, Turkey, India, Indonesia, Saudi Arabia, and Iraq (China is out of competition) formed the top 5 importers of Ukrainian products by customs value among Asian countries. In 2020, they together imported goods worth $6.47 billion from Ukraine.

Before the New Year holidays, in December, a record monthly export volume in 2020 was reported as well. Over the last month of the year, goods worth $4.88 billion were exported, and that is 18.5% more than in 2019. And by the end of the year, demand soared abroad not for consumer goods, but for industrial goods—our iron ore concentrates and pellets, sunflower oil and corn, and the like.

Behind every billion or million of funds, behind every global or local export direction or other shift, there are tens of thousands of Ukrainian manufacturers and exporters and millions of their workers. Therefore, it makes sense to find out in more detail where exactly and on what our compatriots can earn currency, and in the wake of what trend the chances of earning in them will be higher.

Therefore, we will try to dissect in more detail the powerful and dynamic direction of Ukrainian export— the Asian one.

Eastern reception

In 2020, Asia became the record holder for the consumption of Ukrainian products. The previous record lasted 9 years. And last year, domestic exporters surpassed it by $0.92 billion.

The share of Asian exports in the supply of Ukrainian goods abroad is also a record over the past 10 years. At the end of 2020, it reached 37.5%. The figure increased immediately by 2.5 percentage points.

The trade turnover of Ukraine last year in relations with the Asian region increased as well. Although in all other directions, it decreased. Moreover, the balance in trade with Asia is quite positive.

The Asian region also became the most dynamic importer of Ukrainian last year. Exports from Ukraine in this direction increased by 20.2% over the year (compared to 2019). At the same time, the growth of our exports to America is four times less, and consumption from the European Union and the Russian Federation has even dropped.

At the same time, the Asian direction is very colorful. On the one hand, we have a gigantic partner who single-handedly took 38% of our exports to Asia in 2020. On the other hand, there are 40 very different other countries in the region that together consume most of Ukraine's southeastern exports.

The Chinese market itself is highly regulated, and the basis of Ukrainian exports here is made up of a small group of commodity products. It is not worth considering China as an attractive market in the coming years, since this country is interested in a very narrow range of Ukrainian goods (about 300 items in total) and 64% of the value of exports to China is concentrated in commodity products, the Kyiv Institute for Economic Research and Policy Consulting notes.

The demand of the other four dozen Asian countries is more diverse in terms of product range and geography of supplies. In addition, the markets of these countries are quite dynamic, many of them are breaking new import records.

And for 2021, the IMF predicts the highest rates of economic recovery in Asia. In particular, real GDP growth in India is expected at 11.5%, Malaysia—7%, Philippines—6.6%, Turkey—6%, and in general in developing Asian countries—8% (vs. 4.3% in developed countries and 5.5% in the world economy).

Taste preferences

The whole Asian market differs from the Chinese one also by the fact that here a little more preference is given to the import of agricultural products from Ukraine. In particular, grain crops and vegetable oils, while the basis of Ukrainian exports to China is iron ore.

The biggest surprise of the last year in the Asian food segment was the start of massive grain exports from Ukraine to Pakistan. During the year, 1.25 million tons of Ukrainian grain were brought here at once (there were practically no supplies a year earlier). And India remains the main consumer of our sunflower oil in Asia. In 2020, it bought more than 1.9 million tons of Ukrainian oil. Although Iraq and Turkey are the most active to increase the volume of its imports.

In addition, Oman has recently been actively increasing imports of flour confectionery products from Ukraine, and Saudi Arabia—of chicken meat, confidently leading the rating of its importers in Asia. Thus, in 2020, Saudi Arabia imported 82,000 tons of Ukrainian chicken meat worth $138 million.

Unlike China, fertilizers and tobacco are also included in the top 10 most popular commodity groups of Ukrainian products in other Asian countries. The main consumer of fertilizers (carbamide) here is India, and of tobacco—Japan and Georgia. In addition, Saudi Arabia begins to import Ukrainian fertilizers, and tobacco exports to the Philippines are growing rapidly. For their part, Turkey and Korea are rapidly increasing the consumption of the chemical industry—ammonia and polyethylene.

And in many developed countries of Asia, the products of Ukrainian metallurgy are very popular now, in particular, semi-finished products from carbon steel of various shapes. The leaders in their consumption are Turkey and Saudi Arabia. Last year, they increased the volume of imports of our semi-finished products by 80-90%. As a result, in 2020, Turkey bought such steel products even more than China—almost 1.3 million tons.

Indicative is the range of Ukrainian products that companies began to supply to Asia in 2020 (at least in 2019, they were not exported). Over the past year, almost a thousand new items have appeared in domestic exports to this region. One tenth of the new products was shipped in millions. And among them, in particular, high-density polyethylene, coke, frozen trout fillets, fir and spruce timber, soybean oil, ammonium nitrate (fertilizer), sanitary feminine pads, shellfish products, fuel wood, mink fur, waterproof ceramic tiles, fresh cheese, rapeseed cake and much more (listed in descending order of export volumes in monetary terms).

And our pine timber is at the top of the rating of Ukrainian novelties popular in Asia. 228,000 tons of them for a record amount of $49 million were exported from Ukraine to Asia (excluding China) during a year, mainly to Turkey and India.

By the way, Pakistan, Vietnam, Qatar, Iran, Yemen, Iraq, Jordan, Hong Kong, Nepal, and Oman formed the top 10 Asian countries that most dynamically increased the consumption of Ukrainian products in 2020. Over the year, they increased imports from Ukraine by $540 million (compared to the level of 2019).

It is too early to draw conclusions on exports this year—the first month of the year is not indicative. However, it is already clear that the main trends still persist. And Malaysia and Japan are trying to get into the top 10 most dynamic importers of Asia. In addition, compared to the beginning of last year, the region now imports much more rolled steel, timber, copper cathodes, steel rods and profiles, butter and many other industrial and agricultural Ukrainian products.

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