Page 55 - RusRPTApr20

5.2 Balance of payments, current account
Russia trade dynamics$bn
foreign trade t/o
export of goods
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2020 2020
46.3 52.4 57.5 57.6 51.4 52.4 55.7 55.7 55.9 59.8 58.6 56.1 46.6
29.8 34.0 36.5 37.5 31.6 32.5 33.4 33.8 35.0 36.1 35.4 34.9 29.5
importofgoods -16.5 -18.4 -21.0 -22.0 -19.8 -20.0 -22.2 -21.8 -20.9 -23.7 -23.2 -21.2 -17.0
good trade balance
source: GKS
13.3 15.6 15.5 15.5 11.8 12.5 11.2 12.0 14.1 12.4 12.2 13.7 12.5
Over the first two months of 2020 the trade regime remained largely unchanged from the year before with Russia running a healthy $12.5bn surplus in February. However, trade volumes are expected to start falling dramatically from April as a global recession takes hold.
5.2.1 Import/export dynamics
Russia’s oil and gas exports will be hit by the double whammy of the coronavirus crisis and collapse of oil prices. Coronavirus has already led to a drop in demand for Russian gas; the new Power of Siberia pipeline was closed in March “for maintenance” as China’s economy stalls. At the same time Saudi Arabia has flooded Europe’s refineries with cheap oil ($8/bbl discounts) to punish Russia and try to force it to the negotiating table again after the OPEC+ deal collapsed at the start of March. Both will hurt Russian exports this quarter. (See energy sector section below for more details).
Russia banned the export of rice and buckwheat in March to ensure the near-term supply. From 20 March, the Russian agriculture watchdog, Rosselkhoznadzor, has banned the export of rice and buckwheat from the country for ten days. Purchases of rice and buckwheat doubled in the two weeks in March on concerns as to whether supplies are sustainable. The current elevated sales are likely to be followed by a period of cooling that could last a number of months. Russia is self-sufficient in both categories, with consolidated production and consumption of around 900,000 tonnes. In this farming season, IKAR estimates the export potential for both categories at 215,000 tonnes, while imports stand at a comparable level. The export ban lowers concerns about domestic supplies in the near term as well as the risks associated with price hikes related to the weaker local currency.
Finnish goods exports to Russia increased last year by 10% to €3.6bn. Much of the export growth, however, reflected one-time supplies for construction of the Nord Stream 2 gas pipeline. Pipeline sections that were made in Russia and brought to Finland for coating were earlier recorded as part of Finland’s imports from Russia and last year correspondingly as Finnish exports to Russia.
Without the gas pipeline deliveries, Finnish exports to Russia grew only by about 1% last year. Export trends vary considerably across branches. Exports of machinery & equipment, foodstuffs and forest industry products were up 3−6%, while exports of chemical products and textiles experienced
55 RUSSIA Country Report April 2020 www.intellinews.com