COMMENTARY: Belarus-Russia trade in decline due to pandemic and oil supply strife
<p> MINSK, Jul 28 - PrimePress. Belarus-Russia trade turnover dropped by 22.6% in January-May 2020 to $10.790 billion year on year. Belarus’ imports from Russia were down by 32.5% to $5.832 billion, while exports to Russia decreased by 6.2% to $4.958 billion. </p> <p> </p> <p> The outstripping decrease in imports from Russia stems from a decrease in the import of Russian crude oil to Belarus, since the parties had been long failing to reach agreements on oil supply terms. </p> <p> </p> <p> As a result, Russia cut oil supplies to Belarus in the first quarter, imports of Russian oil to Belarus fell in January-May 2020 by 29.6% in January-May 2019 to 4.084 million tonnes, by 42.8% in monetary terms to $689.819 million. </p> <p> </p> <p> Despite the resumption of oil supplies from Russia, Belarus stepped back in the market largely due to the global trend towards a decline in demand. According to the National Statistics Committee of Belarus (Belstat), the export of oil products dropped in January-May 2020 by 53.6% year on year. Belarus stood $1.412 billion short, as its revenues from foreign trade shrank by 30%, and the national budget did not receive Br719 million ($230 million at the exchange rate of the National Bank of Belarus) in export duties on oil products and potash fertilizers to compare with January-May 2019. </p> <p> </p> <p> Interestingly, despite a significant decrease in demand for oil products, Belarus boosted their export to the Russian market almost twelvefold. However, seeking to protect domestic producers, the Russian government prohibited the import of fuels into Russia in May (until October 1, 2020), which strongly hit Belarus against the backdrop of sagging demand. </p> <p> </p> <p> Russia took anti-COVID quarantine measures and shut the border shared with Belarus, which considerably undermined the performance of a number of Belarus’ key producers. Manufacturers of trucks and spare parts, meat, butter and tires incurred the greatest export losses. For instance, the export of trucks to Russia showed a 66.4% year-on-year decrease in value terms in January-May 2020 (down $198 million), beef – by 27.6% ($20m), butter – by 16.3% ($28m), tires – 36% ($21m). The export of sugar was down 61.1%, foods from flour – 62.4%, leather footwear – 28.6 %. </p> <p> </p> <p> Some Belarus’ industries managed to maintain and even increase supplies to Russia in January-May 2020. Supplies of cheese and cottage cheese, passenger cars, railway vehicles, tractors and tractor trucks and agricultural machinery went up. Supplies of cheese and cottage cheese to Russia increased in January-May 2020 by 8.5% (up $31.367 million), passenger cars – 165% ($30.6m), tractors and tractor trucks – 21% ($20.8m), railway vehicles – 177% ($26.4m), agricultural machinery – 52% ($12.5m). </p> <p> </p> <p> Belarus’ total exports were down 20.5% in January-May 2020 to $10.483 billion, while exports to Russia only decreased by 6.2%. It may seem that Belarusian enterprises performed well and retained their foothold in the Russian market better than in other export markets, but, in fact, exports to other markets largely declined in the oil products and potash fertilizers segments, and the drop in exports to the Russian Federation, which Belarus mainly supplies with products with high value-added, was more like of a systemic nature, rather than dictated by the market behavior. </p> <p> </p> <p> The closure of national borders was another important negative factor. Alongside transport and logistics difficulties for business entities, many Belarusians lost the opportunity to work in Russia, which is particularly sensitive for the regions. Since Belarusian labor migrants had to stay home, the aggregate loss of money transfers reaches $600-700 million a year. According to the Russian Central Bank, individuals’ transfers from Russia to Belarus totaled $667 million in 2018 and $607 million in 2019. Individuals’ money transfers from Russia to Belarus decreased 5.4% year on year in the first quarter of 2020. PrimePress reports, citing the Central Bank of the Russian Federation that transfers of individuals from Russia to Belarus stood at $122 million in January-March 2020. </p> <p> </p> <p> To prevent further losses, Belarus has long been officially asking Russia to resume the standard border crossing regime, but, since March, the Russian government has not resumed regular air and rail traffic between states, although some restrictions on the transportation of essential goods and the cross-border movement of rotation worker have been eased. According to Russia’s official representatives, the epidemiological situation remains the main obstacle. </p> <p> </p> <p> Belarusian officials have stated more than once that all necessary conditions have been created to lift the restrictions. Ambassador of Belarus to Russia Vladimir Semashko said in late June 2020 that the border would probably open at the beginning August, and that some cross-border movement restrictions had been lifted, as the epidemiological situation was getting normal. On July 14, 2020, the prime ministers of Belarus and Russia, Roman Golovchenko and Mikhail Mishustin, addressed Belarus-Russia trade decline and discussed the removal of trade barriers. Golovchenko said after the talks that Russia was planning on resuming transportation with Belarus in the near future. </p> <p> </p> <p> On July 15, 2020, the Russian Federation canceled the observation for foreign nationals, and Belarus no longer requested two-week quarantine for those arriving from Russia. </p> <p> </p> <p> This was a mirror response to Russia’s regulations. Political considerations aside, this was done, among other things, to increase supplies of Russian commodities to the Belarusian market. End </p>
2020-07-29
Primepress
MINSK, Jul 28 - PrimePress. Belarus-Russia trade turnover dropped by 22.6% in January-May 2020 to $10.790 billion year on year. Belarus’ imports from Russia were down by 32.5% to $5.832 billion, while exports to Russia decreased by 6.2% to $4.958 billion.
The outstripping decrease in imports from Russia stems from a decrease in the import of Russian crude oil to Belarus, since the parties had been long failing to reach agreements on oil supply terms.
As a result, Russia cut oil supplies to Belarus in the first quarter, imports of Russian oil to Belarus fell in January-May 2020 by 29.6% in January-May 2019 to 4.084 million tonnes, by 42.8% in monetary terms to $689.819 million.
Despite the resumption of oil supplies from Russia, Belarus stepped back in the market largely due to the global trend towards a decline in demand. According to the National Statistics Committee of Belarus (Belstat), the export of oil products dropped in January-May 2020 by 53.6% year on year. Belarus stood $1.412 billion short, as its revenues from foreign trade shrank by 30%, and the national budget did not receive Br719 million ($230 million at the exchange rate of the National Bank of Belarus) in export duties on oil products and potash fertilizers to compare with January-May 2019.
Interestingly, despite a significant decrease in demand for oil products, Belarus boosted their export to the Russian market almost twelvefold. However, seeking to protect domestic producers, the Russian government prohibited the import of fuels into Russia in May (until October 1, 2020), which strongly hit Belarus against the backdrop of sagging demand.
Russia took anti-COVID quarantine measures and shut the border shared with Belarus, which considerably undermined the performance of a number of Belarus’ key producers. Manufacturers of trucks and spare parts, meat, butter and tires incurred the greatest export losses. For instance, the export of trucks to Russia showed a 66.4% year-on-year decrease in value terms in January-May 2020 (down $198 million), beef – by 27.6% ($20m), butter – by 16.3% ($28m), tires – 36% ($21m). The export of sugar was down 61.1%, foods from flour – 62.4%, leather footwear – 28.6 %.
Some Belarus’ industries managed to maintain and even increase supplies to Russia in January-May 2020. Supplies of cheese and cottage cheese, passenger cars, railway vehicles, tractors and tractor trucks and agricultural machinery went up. Supplies of cheese and cottage cheese to Russia increased in January-May 2020 by 8.5% (up $31.367 million), passenger cars – 165% ($30.6m), tractors and tractor trucks – 21% ($20.8m), railway vehicles – 177% ($26.4m), agricultural machinery – 52% ($12.5m).
Belarus’ total exports were down 20.5% in January-May 2020 to $10.483 billion, while exports to Russia only decreased by 6.2%. It may seem that Belarusian enterprises performed well and retained their foothold in the Russian market better than in other export markets, but, in fact, exports to other markets largely declined in the oil products and potash fertilizers segments, and the drop in exports to the Russian Federation, which Belarus mainly supplies with products with high value-added, was more like of a systemic nature, rather than dictated by the market behavior.
The closure of national borders was another important negative factor. Alongside transport and logistics difficulties for business entities, many Belarusians lost the opportunity to work in Russia, which is particularly sensitive for the regions. Since Belarusian labor migrants had to stay home, the aggregate loss of money transfers reaches $600-700 million a year. According to the Russian Central Bank, individuals’ transfers from Russia to Belarus totaled $667 million in 2018 and $607 million in 2019. Individuals’ money transfers from Russia to Belarus decreased 5.4% year on year in the first quarter of 2020. PrimePress reports, citing the Central Bank of the Russian Federation that transfers of individuals from Russia to Belarus stood at $122 million in January-March 2020.
To prevent further losses, Belarus has long been officially asking Russia to resume the standard border crossing regime, but, since March, the Russian government has not resumed regular air and rail traffic between states, although some restrictions on the transportation of essential goods and the cross-border movement of rotation worker have been eased. According to Russia’s official representatives, the epidemiological situation remains the main obstacle.
Belarusian officials have stated more than once that all necessary conditions have been created to lift the restrictions. Ambassador of Belarus to Russia Vladimir Semashko said in late June 2020 that the border would probably open at the beginning August, and that some cross-border movement restrictions had been lifted, as the epidemiological situation was getting normal. On July 14, 2020, the prime ministers of Belarus and Russia, Roman Golovchenko and Mikhail Mishustin, addressed Belarus-Russia trade decline and discussed the removal of trade barriers. Golovchenko said after the talks that Russia was planning on resuming transportation with Belarus in the near future.
On July 15, 2020, the Russian Federation canceled the observation for foreign nationals, and Belarus no longer requested two-week quarantine for those arriving from Russia.
This was a mirror response to Russia’s regulations. Political considerations aside, this was done, among other things, to increase supplies of Russian commodities to the Belarusian market. End