Page 36 - UKRRptAug20

In May, Ukraine’s balance of payments switched to a $353mn deficit from a $716bn surplus in April. In 5M20, the surplus of the balance of payments amounted to $224mn (vs. a $466mn deficit in 5M19).
“As ​we expected​, the decline in imports outpaced the exports decline in May. However, the plunge in goods exports was severe amid depressed global demand from the coronacrisis,” Evgeniya Akhtyrko of Concorde Capital said in a note. “Ukraine’s external trade will remain sluggish in June, but we are likely to see less severe declines both in imports and exports, as the bleakest period of the coronacrisis seems to be over for Ukraine’s major trading partners. Meanwhile, we do not see factors that would result in Ukraine’s C/A switching to a deficit in the nearest months.”
The remittances of Ukrainian labourers abroad dropped 2.1% year on year to $4.5bn in 5M20​, the National Bank of Ukraine (NBU) reported on July 10. Around 60% of remittances were transferred through informal channels, while the rest occurred via banking transfers and international money transfer systems, according to NBU estimates.
The remuneration of Ukrainian labourers abroad dropped 4.8% y/y in 5M20 to $4.7bn, the NBU said.
"The remittances of labour migrants have been essential for Ukraine's economy since 2015, as they restrained the enlargement of the current account (C/A) deficit amid a negative trade balance," Evgeniya Akhtyrko, an analyst at the Kyiv-based Concorde Capital brokerage, said in a research note. "Due to the revision of a remittances estimate in 2018, the NBU improved Ukraine’s C/A for 2015-2017 by about $2bn per annum."
5.2.1 ​Import/export dynamics
Ukraine exported a new all time record 57.2 mmt of grain in the 2019/20 marketing year ending in June​, or 13.5% more y/y, according to an Economy Ministry report on July 7.
Ukraine exported 20.5 mmt of wheat (a 31.6% jump y/y) and 30.3 mmt of corn (a 1.6% increase y/y) in the marketing year, also setting records.
“The record-high export results were driven by the strong harvest in the 2019 calendar year. Weather conditions were favorable for wheat (the average yield rose 11.8% y/y to 4.2 t/ha), while they were adverse for corn (the average yield slid 7.9% y/y to 7.2 t/ha),” Andriy Perederey of Concorde Capital said in a note.
“We expect that the 2020/21 marketing year will show a flat or slightly lower y/y harvest and export results, as the yields of early crops will have been affected by the dry winter, while the yields of spring crops are likely to outperform last year’s results,” Perederey added.
The government may cut wheat exports by 15% this year marketing year,
to 17.2mn tons, Ukragroconsult reports, citing traders. Sensitive to bread prices, the government traditionally holds over traders the threat of restricting wheat exports, usually in the spring.
Revenue from Ukraine’s steel exports dropped by 17% in the first half of
36​ UKRAINE Country Report​ August 2020 ​ ​www.intellinews.com