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The turnover of Russia's foreign trade increased by 8.1% last year and amounted to $850.5 billion, according to data from the Federal Customs Service (FCS), published on March 13. Exports increased by 19.9% to $591.5 billion, imports decreased by 11.7% to $259.1 billion. Thus, the trade surplus reached $332.4 billion, an increase of almost 1.7 times compared to 2021, when it was $199.5 billion.

The agency partially resumed the publication of data on foreign trade, closed last spring (the latest data were released in March for January 2022) after the introduction of large-scale Western sanctions against Russia. This decision was made to avoid incorrect estimates and speculation, the FCS explained at the time. After the start of the SVO in Ukraine, Western countries began to impose sanctions, which, among other things, concerned the supply of various goods to Russia. In turn, the Russian government in March allowed the import of foreign products without the consent of the copyright holders. The list of goods for parallel import includes cars, spare parts, household appliances, clothing, shoes, etc.

On Monday, the Federal Customs Service disclosed data on exports and imports for 2022, broken down by the 71st commodity group. "Subsequently, the value volumes of exports and imports by commodity groups will be published monthly on the 40th day after the end of the reporting period on an accrual basis and broken down by month with an update of data from the previous months of this year," the ministry said.

According to the Federal Customs Service, last year exports of mineral fuels, oil and their distillation products, bituminous substances increased by 42.8% compared to 2021 to $383.7 billion (about 65% of all Russian exports). Supplies of fertilizers from Russia increased by 54.3% to $19.3 billion, food products and agricultural raw materials – by 14.8% to $41.3 billion. Exports of ferrous metals at the same time fell by 15.2% to $24.5 billion, pearls, precious and semi–precious stones - by 41.4% to $18.5 billion.

Deliveries to Russia in 2022 of nuclear reactors, boilers, equipment and mechanical devices decreased by 13.1% to $47.3 billion (more than 18% of total imports), electrical machinery and equipment – by 19.1% to $29.8 billion, ground transport, except rail and tram– - by 41.5% to $15.7 billion. At the same time, the import of works of art, collectibles and antiques fell the most in percentage terms – by 69.5% (up to $ 10 million) and watches – by 66.7% (up to $122 million).

In January, the Federal Customs Service informed Vedomosti that China, Turkey, the Netherlands, Germany and Belarus became Russia's main trading partners by the end of 2022. According to the customs service, in 2022, Russia's trade turnover with China increased by 28% compared to the previous year, with Turkey – by 84%, with Belarus – by 10%. At the same time, it decreased by 23% with Germany, and by 0.1% with the Netherlands. In 2021, China also ranked 1st among Russia's largest partners with an indicator of $140.7 billion (exports amounted to $68 billion, imports - $72.7), follows from the data of the Federal Customs Service. Germany was in 2nd place ($57 billion: exports - $30 billion, imports - $27 billion), the Netherlands was in 3rd place ($46.4 billion: exports - $42.2 billion, imports - $4.2 billion). Belarus was fourth with an indicator of $38.4 billion (exports – $22.8 billion, imports – $15.6 billion), and the United States rounded out the top five – $34.4 billion (exports – $17.5 billion, imports - $16.9 billion).

 Sanctions restrictions

The dynamics of the trade surplus is explained by the fact that in the current geopolitical conditions, many countries imposing anti-Russian sanctions significantly reduced their exports, but imports from Russia were not reduced so much, and some even increased it, said Ksenia Bannikova, head of the Non-Resource Sector Economics department of the CSR. If you look, for example, Germany, France, USA (by them on the portal of ITC TradeMap mirror available data on the export and import), the total (for all commodity groups in total) exports to Russia decreased by 2022 2-4 times compared to 2021 At the same time, Germany and France increased imports from Russia,  and the United States – reduced only by half (with a 4-fold reduction in exports), the expert added.

In parallel with these trends, Russian exporters also sought and developed alternative export directions, exporting their products to countries that do not impose sanctions, Bannikova recalled. In particular, the aggregate data of Russia's exports to Turkey without division into individual goods and commodity groups show an increase of about 2 times in 2022 compared to the previous one, she added.

The growth of the trade surplus in 2022 is due to the good export situation and import restrictions both due to sanctions and as a result of structural transformation, said Anton Tabakh, Chief economist of the Expert RA agency. Almost the entire increase in the trade surplus was provided by the energy sector, while imports were expected to remain under pressure, said Natalia Lavrova, Chief economist at BCS World of Investments. The main factors in the decline in imports were the categories related to equipment, machinery and transport, i.e. the most technologically advanced sectors, she noted.

What to expect this year

If in 2022 the effect of sanctions was mostly measured by a drop in imports, then in 2023, given the introduction of painful restrictions on oil and petroleum products, it will already be measured by a reduction in exports, Lavrov added. For the first two months, we can say that the effect looks significant both for the ruble exchange rate and for the country's budget positions, the expert noted. In 2023, exports will decline due to the global recession and sanctions, while the restoration of imports to the level of 2021 is more than likely expected by Tabakh.

The situation with foreign trade in 2023 will continue the dynamics of the last months of 2022, i.e. it will worsen, Lavrov believes. Already, according to the statistics of the balance of payments, it is clear how the current account (including the trade balance) is declining, primarily due to a failure in exports – both in volume and in price, she noted. The trade balance in 2023 will be reduced by almost 2 times, since the sectors that provide the greatest contribution to Russia's export flows are now under sanctions pressure, the expert estimates.

According to the available ITC Trade Map data, China and Turkey were among Russia's key trading partners in 2022, Bannikova pointed out. And if China was in the lead in 2021, Turkey's position has strengthened, she noted. In general, we can expect this leadership to remain in 2023, as well as further strengthening of foreign trade cooperation with the countries of the Asian and Middle Eastern regions, the expert believes. In particular, the expansion of cooperation with India and Iran is likely, she added. The focus on Asia in 2023 will obviously continue, Lavrov believes. There are practically no alternatives now, the expert pointed out.

Among the major foreign trade partners will also be the EAEU and CIS countries, including Belarus, with which bilateral cooperation is actively developing, Bannikova expects. Against the background of the prevailing conditions and restrictions in 2023, the trend towards a decrease in the EU's share of trade with Russia while growing with China, Turkey, India and Kazakhstan is likely to continue, Tabakh believes.

In 2023, the situation will be determined by the development of the geopolitical situation and the sanctions steps of foreign states, but it can be assumed that some European countries will not leave the list of Russia's key trading partners, Bannikova added. In general, this is confirmed by the results of 2022, she pointed out: according to mirror data, Germany, Italy and the Netherlands were among the leaders in terms of Russian exports.

There was no particular point in closing the FCS information, Lavrov believes. Most analysts continue to analyze data on mirror statistics of partner countries, of which the main trends are generally clear, the only question is labor costs, she summarized.

Source: https://www.vedomosti.ru/economics/articles/2023/03/14/966321-kak-izmenilas-vneshnyaya-torgovlya-rossii