Ukraine's import and export after launching the FTA with the EU

Author : Oleksandr Okhrymenko

10:09, 12 March 2016

Ukraine's import and export after launching the FTA with the EU

Author : Oleksandr Okhrymenko

In January-February 2016, Ukraine's share of exports to the EU amounted to about 45%, and to the CIS countries it was only 12%

10:09, 12 March 2016


There were a lot of talks that from January 1, 2016, after launching a free trade zone with the EU (it would work fully only from January 1, 2026), an economic miracle would happen. Well, the miracle did not happen yet. But some changes in Ukraine's foreign trade with the European Union took place though.

According to the data by Border Service, in January-February 2016, Ukraine's share of exports to the EU amounted to about 45%, and in the CIS countries it was only 12%. We can start drinking champagne and celebrate the first success of a free trade zone with the EU. But obviously this is not worth of doing. Indeed, Ukraine's exports to the EU countries in January-February 2016 increased by 1.8% compared to the same period last year. But this obviously was very little to compensate for the loss of the CIS market. As a result of the general fall of Ukraine's exports in January-February 2016 amounted to 21% compared to the same period last year. If the trend continues, by the end of the current year Ukraine's exports fall can be similar to last year, which means a deficit of currency again, problems with Ukrainian enterprises and rising unemployment. We do not like this scenario? Moreover, imports in January-February 2016 fell by only 14%, as a result, at the end of this period, we have a trade deficit of $ 625 million. And this figures do not make us happy.

Related: Ukraine – top exporter of corn to China

There is a lot of debates about what and how should Ukraine export. There is much to dream and fantasize, and it is possible to look at the facts and figures, and make appropriate conclusions. Ukraine turns in agar exporter. In January-February 2016, the corn took the most in the export structure of Ukraine. It accounted for 13% of all Ukrainian exports. The main buyers of Ukrainian maize were China, Spain, and the Netherlands. In many ways, buying Ukrainian corn EU countries and ensures the growth of exports of Ukraine in the EU.

Related: Exporting labor would save Ukraine

Another Ukrainian good, which is willingly bought in the EU, is sunflower oil. Export of sunflower oil ranks second among the top 5 export products of Ukraine. The total exports of Ukraine in January-February sunflower oil is about 11%. Traditionally a lot of Ukrainian sunflower oil buys India, but in recent years the Netherlands and Spain have started to buy a lot of oil too. In the top-5 also includes the export of wheat, although it accounts for only about 4.4% of total Ukrainian exports, but the wheat is not actively bought in the EU. Most of wheat in January and February 2016 Ukraine has sold to Egypt, which in the past has actively bought our wheat, but now two new large buyers appeared - Thailand and Bangladesh. Ukraine is trying to replace Russia by Asian markets that were previously not actively used in Ukraine. And now they are being developed and expanded.

Related: Ukraine reduced export of weaponry by half in 2015

In addition to corn and sunflower oil, Ukraine exports a lot of iron ore and steel semi-finished products. As for the export of iron ore, it takes in the export of Ukraine about 4.5% while the main buyer of this product is traditionally China, and added new customers from Austria and the Czech Republic. Ukraine within the framework of the FTA began to supply in the EU more iron ore. As for the export of semi-finished steel, the share of this type of export is about 6.3% of total Ukrainian exports. The main buyers of these products have not changed: Turkey, Italy and Egypt. We sell semi-finished products to them, and they sell the finished steel on the world market.

As for the main import products, the EU also plays a significant role. The top 5 imported products are natural gas, which accounts for 5.8% of total imports. Now Ukraine buys it not directly from Russia, but through the European offshore, so officially natural gas to Ukraine is supplied by Slovakia, Austria, and Poland. Although everyone understands that this is the same gas from Russia, but formally it comes through the EU.

Related: Ukraine among top-10 exporters of butter and cheese

Approximately 6.5% of the import to Ukraine is oil and there a major supplier of it is Belarus, which makes fuel from Russian oil and gladly sell it to us. As well as Lithuania, which also makes the fuel from Russian oil. And now we will have supplies of refined products from Greece. There is already difficult to understand, whose oil is that and what kind of gasoline do we have.

Due to the fact that Ukraine buys less natural gas from Russia, but now it buys more coal, in the total imports, coal takes 4.5%. In January-February 2016 Ukraine bought a lot of coal from Russia, USA, and Australia.

Related: Ukrainian export exceeds import by $4 billion

The share of drugs in total imports of Ukraine occupies 3.9%, while our main suppliers are Germany, India and France. Everything is traditional. Ukraine has been buying drugs mainly from those countries for long years.

And finally a few words about import of cars. Here, too, everything is traditional. The share of import of cars in the overall structure of imports in Ukraine occupies 2.9%. At the same time the main suppliers of passenger cars in Ukraine are traditionally Germany, USA, and Japan.

The changes on the market of exports and imports are actually taking place. But these changes once again shows that exports of engineering products go by the wayside, but grain and metal ore become the main exported goods. This is our place in the world market.

Related: Top 10 exporters of Ukrainian goods

Related: Export of agricultural products to Russia amounts to 2%

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