Page 31 - UKRRptMay21

5.2 Balance of payments
Ukraine’s goods trade deficit amounted to $109mn, shrinking slightly from a $148mn deficit in January, the State Statistics Service said in its preliminary report published on April 14. Seasonally adjusted goods trade registered a deficit of $415mn (vs. a $665mn deficit in January) amid a 4.3% m/m growth of adjusted exports and a 1.1% m/m decline in adjusted imports.
Goods exports jumped 14.9% y/y in February to $4.5bn (vs. a 5.5% y/y decline in January). The growth was observed in all major export items, while the major drivers included mineral products (70.1% y/y), ferrous metals (12.0% y/y), animal fats and vegetable oils (12.1%) and foods (20.3% y/y).
Goods imports inched up 1.1% y/y to $34.6bn in February (vs. 5.2% y/y decline in January). In particular, imports of polymers advanced 13.7% y/y, imports of animals and animal products increased 26.2% y/y, imports of vegetables grew 8.8%. At the same time, energy imports declined 20.4% y/y.
In 2M21, goods trade deficit amounted to $257mn (vs. a deficit of $573mn in 2M20), goods exports increased 4.5% y/y while goods imports inched up 0.5% y/y.
Ukraine’s external trade picked up significantly in February after a significant downfall in the prior month. Goods exports advanced significantly, but we don’t see many chances for Ukrainian exports to show sustainable double-digit growth as the price situation at the external markets might change. Goods imports remain weak amid low imports of mineral products.
We expect the goods trade deficit to enlarge in 2021 as the growth of goods imports will outpace export growth. We expect that the 2021 goods trade deficit (according to UkrStat methodology) will swell to $8.3bn (from $4.9bn in 2020).
High steel and iron ore prices account for most of the 27% y/y jump in Ukraine’s exports of goods in March. Steel export revenues were up 75% y/y and iron ore revenues were up 99% y/y. UkrMetalurgProm, the industry association, reported that in March the steel billet average export price was up 73% y/y and the rebar price was up 70%.
“In the food & agriculture segment, higher prices have been offset by lower volumes, resulting in a 3.3% y/y total decrease in exports,” writes Oleksiy Blinov, Alfa’s research head. “Sunflower volume exports are up only 1.5% y/y in March, but the export price has more than doubled.” Similarly, higher grain export prices have compensated for a 23% y/y drop in grain export volumes.
31 UKRAINE Country Report May 2021 www.intellinews.com