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Export compass points to East

Author : Andriy Dotsenko

21:17, 31 October 2017
Export compass points to East

Author : Andriy Dotsenko

Today, the exports to the EU countries are growing, but can we compare our products with European by its quality and other indicators? And no matter that we don't admit it, but, definitely, so far the Ukrainian products cannot be at the same level with German or Italian. Therefore, we should not waste time but look for new markets.

21:17, 31 October 2017

Read original article at 112.ua

112 Agency

In my opinion, the Asian region can help us in this regard. After all, today Asian countries occupy a significant position in the regional structure of exports, for example, of Ukrainian agrarian products - more than 45% (almost $ 5 billion). At the same time, two countries, China and India, are the leading importers of our grain and oilseeds. But we are paying too little attention to the possibility of exporting value-added products, livestock products and organic products to this region. Therefore, it is worthwhile to analyze how the situation with Ukrainian exports develops today and in what direction should we move.

Asian market is ours

Today, the hope for the restoration and growth of all Ukrainian exports is associated with the Asian region. One of the largest eastern buyers of Ukrainian goods is India (oil, vegetables, agro products, furniture, woodworking products, light industry, pharmaceuticals, engineering products). In 2016, exports of goods and services from Ukraine to India amounted to $ 2 billion, thus increasing by 31.4%. Speaking about this year, for 6 months of 2017 export already was 1,4 billion dollars, having increased in comparison with the similar period of 2016 on 38,5%. If you look separately at the export of goods, then for 6 months it amounted to 1.1 billion dollars. This is an increase of 45.5%, or $ 356 million.

Now 70% of Ukrainian exports to India are sunflower oil, which is estimated at 800 million dollars. Also, Ukraine exports wheat to the Indian market - 16% (179 million dollars), oilcake - 2% (21 million dollars). Among other products of our exports are vegetables, legumes, corn and soybean oil. In addition, the products of mechanical engineering - turbojet engines and rolling mills, products of metallurgy, titanium and chemical products, clays. But it is important that in the export of goods from Ukraine to India in the first half of 2017, 63 new commodity items appeared, among which, for example, ammonia, weaving looms, electric lighting equipment.

That is why India is in the focus of Ukraine's Export Strategy for 2017-2021. This country is among the ten largest economies in the world, it ranks third in terms of absolute growth.

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The production of Ukrainian machinery is also exported in the countries of Asia in significant amounts. For example, two years ago, in 2014, 10.8% of all domestic exports were in China, 21% - in Iran, about 25% - ion Vietnam. The increase in exports of our machine-building products to Iran, the countries of Central Asia (Kazakhstan, Turkmenistan, Azerbaijan) and Turkey makes it possible to develop new markets and restore old ones. Particularly promising for Ukraine is the Iranian market, which for the past decade has remained closed due to international sanctions imposed on this country. Today, when international sanctions are lifted, Ukraine expects to restore its positions on the Iranian market. Also, the Iranian Ambassador to Ukraine Mohammad Beheeshti-Monfred said that Iran is interested in the supply of Ukrainian agro products and is ready to offer Ukraine an alternative in the supply of hydrocarbons and the joint use of new transport corridors in the east.

Who will feed China?

China's market is extremely in need of food. This segment is saturated with a huge amount of fake products, the use of which leads to tragic consequences. That is why Ukrainian exporters will never lose interest in Chinese markets. Since China is experiencing difficulties with self-sufficiency in food products due to accelerated urbanization, the qualitative food and agricultural products are relevant to this country. Ukraine may eventually become the main food supplier in China (90% of corn and 97% of sunflower oil). Also, domestic suppliers opened a new market for the sale of machinery, iron ore, and agricultural raw materials to China. It is noteworthy that imported products do not require much advertising in China. As non-natural food products prevail on the domestic market, Chinese consumers are actively seeking out organic imports. Therefore, showrooms are an effective method of attracting the audience. For example, in the city of Shenzhen there is a well-known International Center for Imported Food Products. It serves as a qualitative springboard for many market players, that's why Ukrainians do not need to wait, but to develop trade relations with China.

Conflict between Turkey and Russia played into our hands

No less favorable country for Ukrainian exports is Turkey - for 10 months of 2015 the turnover of agricultural products between Ukraine and Turkey amounted to 715.87 million dollars. This year, due to trade restrictions from the Russian Federation, Ukraine is ready to increase by 2-3 times the export of grain and sunflower oil to Turkey. In just two years, the share of foreign soybean supplies to Turkey increased almost 4 times. Thus, Turkey has already superseded the former leaders of Ukrainian soybean imports - Italy, Egypt, Spain and topped the list in terms of the volume of purchases.

In 2016, Turkey took the fourth place among the countries of the world in terms of the volume of Ukrainian exports and the seventh regarding largest commodity turnover with Ukraine. Turkey is one of the main trade partners of Ukraine, the most promising for the development of Ukrainian exports. The external commodity turnover between the two countries is more than 3.15 billion dollars a year. Also Turkey is the third largest exporter of goods from Ukraine for the seven months of 2017 - $ 1.4 billion, an increase of 18% compared to the same period last year. Also, Turkey is among the top three leaders in increasing exports of agro-industrial products: the volume increased by $ 148.8 million. And it is one of the largest consumers of Ukrainian soybeans (54.4% of total exports from Ukraine) and oilcake (47.2% of total exports from Ukraine). The export strategy of Ukraine refers Turkey to the TOP-20 promising markets for the export of Ukrainian products.

To explore and discover

Closed Russian market and the internal lobby in the EU markets are two problems that have driven the Ukrainian producers into a dead end. Dependence on Russian business and hopes for European markets have led the Ukrainian industry into a kind of depression. But this disease has the cure. Panacea can become an Asian region with a huge market, to which we have something to deliver. However, in order to succeed in the eastern markets, it is necessary to know the peculiarities of the local culture, the rules of the market, it is necessary to understand what the consumer wants and what the Ukrainian entrepreneur can offer.

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