In late June, the Russian government decided to begin a gradual lifting of economic sanctions from Turkey, August 9 the presidents of the two countries will speak in St. Petersburg on the normalization of relations. Turkey dropped from sixth to seventh place in the list of the largest trading partners of Russia, behind Belarus. After reconciliation, the trade turnover between Russia and Turkey will grow, but to restore the previous volumes will be difficult, said last week the Minister of economic development Alexei Ulyukayev.
According to the Federal customs service, in the first five months of 2016 (latest available data) trade between Russia and Turkey fell 42.8%, to $6.1 billion from $10.7 billion in the same period a year earlier. Bilateral trade is falling much faster than Russia’s trade with the world (-24% in January—may). However, Russian-Turkish turnover decreased to sanctions in the past year by 26%.
Export to Turkey is falling more slowly than imports from Turkey. For the first five months Russia exported to Turkey in terms of value seven times more than it imported $5.4 billion against us $0,75 billion. This is natural: since the beginning of the year reset to zero the import to Russia of Turkish sanctions goods (see incision), and in 2015 this basket accounted for about a quarter of all deliveries from Turkey ($1.1 billion). In addition, the Rosselkhoznadzor has repeatedly blocked on phytosanitary grounds supplies of goods from the sanctions list, such as pumpkins and squashes, peppers and eggplants, lettuce.
Changes in the export
For analysis we used data from the FCS, processed by the Moscow international trade Centre (ITC). The export of Russian goods to Turkey in the first five months of this year, in monetary terms decreased by 40%, to $5.38 billion This corresponds to the General trend of decline in Russian exports (-30% in January—may this year). A stronger fall under Turkish direction can be explained by the fact that from the beginning it was perceived as risky, says the head of the laboratory of international trade Department of the Gaidar Institute Alexander Knobel. “Our exporters, despite the fact that no taboos, I decided to choose partners from other countries”, — said the economist.
More than half of Russian exports to Turkey accounts for oil and gas. Supply of mineral fuel, oil and petroleum products declined in January—may, almost two times (-46,7%). Exports shrank stronger than in all other countries, where the decline amounted to 37.6%. Money drop Russian energy supplies to Turkey was primarily due to lower prices in 2016: benchmark Brent oil in January—may, 2015 average cost $57,1/barrel. in January—may this year — only $37,9. But decreased and the volume of supply. “Gazprom” in the first quarter of 2016 set in Turkey is 18% less gas in real terms than in the same period a year earlier, according to monopoly in report on the company.
Deliveries of Russian plastics to Turkey fell by 73.8 per cent, although the reduction in exports for this category in other countries for this period was not as dramatic (-9,9%). Exports of organic chemicals (alcohols, esters, acids, vitamins and hormones) fell to 74.2%, while deliveries of the same goods to other countries declined by only 24.3%. Demand and prices for these commodities in the world fell, explained Alexander Knobel. A drop in exports to Turkey can be explained by increased competition in this market.
A reverse trend is observed in the export of ferrous metals: the volume of deliveries to Turkey in five months 2016 fell less than in other countries (-26,1% vs -28,4%), thanks to which Turkey’s share in this category of Russian exports increased slightly. Similar situation with the export of aluminium: there is a decline in the supply to Turkey was 15.3%, in other countries, they narrowed more-than — 23.2%. Exports of fertilizers in Turkey in January—may has also decreased (14.8%), but the reduction was less than the supply in other countries (-25,6%).
Some categories of exports have shown remarkable growth. So, in January—may in Turkey was supplied glass and products from him for $23.6 million (an increase over the same period last year 105%), while in other countries the exports increased by only 18%. 62% increase in deliveries of oil-bearing seeds and fruits. “It is such positions, the export of which is small and very volatile. It exports to several tens of millions of dollars, and it is clear that such volumes can vary within significant ranges,” explains Knobel.
How did the import
The leaders of falling — the secret shipments from Turkey to Russia (in code SS, information on such transfers shall be classified FCS), they collapsed on of 82.6%. However, in monetary terms, their volumes and to the Turkish-Russian conflict was small — $6 million But during the conflict, they had declined to $1 million.
Otherwise, most have contracted the supply of leather and fur — 79.8 (c $15.5 million to $3.1 million), wood and products from it — by 78% (from $6.5 million to $1.4 million), textiles — by 75.5% (c $278,3 million to $68.2 million), products of vegetable origin — at 71.7% (c $521,8 million to $147,5 million), products of stone and glass, ceramics — by 70,3% (from $25.2 million to $7.5 million), shoes — on 68,2% (c $28.3 million to $9 million).
The share of Turkish imports in Russian market and before the conflict was small — 2,4%. But a number of Turkish suppliers had a serious mission. For example, a year ago, Turkey has supplied nearly half (40.9 per cent) knitted knitted fabric, sold in Russia. Since then, Turkish suppliers actually lost the market, their share declined to 1.8% (supplies decreased from $45 million to $1.6 million in cash). The same happened with Turkish vegetables, which before the conflict had occupied a quarter of the Russian import market: over the year they have almost completely lost position (delivery fell from $290 million to $28 million, market share to 3.6%). Significant losses in the Russian market suffered Turkish natural and artificial fur — their share from 21.7% reduced to 5% (from $4.5 million to $810 million). More than half of the Russian market has lost Turkish fruit and nuts (in monetary terms — from $202 million to $87 million). Import of Turkish rugs decreased from $5.4 million to $528 thousand, cotton — c $16 million to $4 million, clothing — from $90 million to $24 million.
From 1 January 2016 to be imported to Russia from Turkey was banned Turkish tomatoes, which accounted for 57% of the Russian import of tomatoes in monetary terms. Disappeared completely fresh apricots from Turkey, which before the conflict actually prevailed on the Russian import market — their share exceeded 90% in monetary terms. The same fate befell fresh strawberries, half of which were imported to Russia from Turkey (7.4 kt $14.4 million for the five months of 2015), peaches, which was almost 45% of the Russian market (4 kt $5.2 million for the five months of 2015), onion and shallot, cauliflower and broccoli, cucumbers and oranges which belonged to the 13 to 17.5% of the import market of Russia. Overall, the market lost Turkish suppliers only because of the sanctions, estimated at $375 million (over five months last year).
To fully compensate for the departure of the Turkish suppliers in the market of Russian retailers was only in some positions. The most impressive rate of substitution for five months of this year showed a market for tomatoes: in physical terms, their imports from other countries since the beginning of 2016 jumped 504,2%, so the result is import of tomatoes to Russia in the first five months of 2016, six times exceeded last year’s figures — deliveries increased from 377 thousand tons a year earlier (233,4 thousand tons of them were in Turkey) to 2.3 million tonnes, Nearly all of this enormous volume of provided one Armenia, is seen from the data of the FCS. According to these data, the increase of supplies of tomatoes to Russia in natural expression has exceeded 500000%, and their share in the Russian market with 0.1% immediately increased to almost 90%. Based on the database of the FCS, more than 2 million tons of tomatoes were delivery or series of deliveries from Armenia, the Director of branch portal FruitNews Irina Goat. In her opinion, when entering data into the database FCS margin for error: Armenia does not produce such a number of tomatoes. In addition, this amount of tomatoes would be unable to sell or recycle in the Moscow region, where they were delivered, according to the FCS, the expert said.
At amazing volumes of supplies of tomatoes from Armenia highlighted and experts ITC: these data require an explanation. sent a request to the Federal customs service of specification of these data.
Russian retailers are completely able to compensate for the lack of Turkish oranges, cauliflower and plums. The supply of oranges to Russia for the year have greatly increased Syria, Tunisia, and South Africa (954, 909 and 725%, respectively), leading to increasing volumes of imports of cauliflower — Uzbekistan and Syria (growth and 2666 2639% respectively), imports of plums provides Iran — deliveries for the year increased by 351%.
But Turkey suffered not only for sanctions positions of its import in Russia as a whole is shrinking much faster than shipments from other countries: in the first five months of products do not fall under the sanctions, the fall of 43.6% compared with 9.6% in the other countries — suppliers of Russia. If in the first five months of 2015, the supply of “nesanktsionnymi” list of Turkish goods was estimated at $1.3 billion, for the first five months of 2016, their value fell to $751 million In varying degrees reduced deliveries to Russia of the majority of Turkish goods, data from the FCS. Most notably in terms of money sank, the import of cars from Turkey — 81.2% (down from $42 million to $8 million); almost 86% reduction in the supply of trousers and overalls with shoulder straps (drop from $38 million to $5.4 million in the first five months of 2016; almost 75% less comes shoes (only $5.4 million instead of the pre-sanctions $21.6 million). Nearly 61% reduction in the volume of shipments of knit shirts from Turkey — from $13 million to $5 million, 78% of the valves on the 91% — cotton yarn and garment market which for Russia first sought to $10 million, and now down to a few hundred thousand dollars.
However, a number of shipments from Turkey to Russia is not only not decreased, but increased. So, 60% of the value increased imports of tobacco from Turkey — from $20.3 million to $32.5 million in the third in monetary terms, expanded the import of Turkish pumpkins and zucchini in Russia: from $14 million to $19 million On 262% increase for the year of delivery cargo and passenger-cargo ships from Turkey to Russia, is seen from the data of the FCS, from $8.9 million in the first five months of 2015 to $31 million in 2016. However, due to the increase of purchases by Russia of such courts in other countries (by 287% in monetary terms), the share of Turkey in the Russian import market for this position was reduced from 22.6 to 21.4%.