There was little change in Russia’s trade flows in January as Russia continues to run a very healthy trade surplus for goods, the latest Rosstat data shows. China continues to dominate Russia’s foreign trade, while imports from Ukraine continue to slide; Russia enjoys a large $4bn trade surplus with its erstwhile rival.

Russia's current account surplus reached $22.3bn in January-February 2019, according to preliminary data from the Central Bank of Russia (CBR). This implies a $10.5bn surplus in February alone and beats the $20.6bn surplus seen for the first two months of 2018.

While the average price of Brent oil in January-February was almost 8% year-on-year lower, the weaker ruble (down by 17% against the US dollar and by 13% against the bi-currency basket of $0.55 and €0.45) resulted in some decrease in imports, Sberbank CIB commented on March 13.

As reported by bne IntelliNews, capital outflow from the private sector reached $18.6bn in January-February. In February alone, the outflow stood at $8.2bn, jumping from $2.7bn.

"Still, the February capital outflow figure was below the $10.5bn registered in January," Sberbank notes, suggesting that "one reason for the lower capital outflow from the private sector was the increase in FX purchases by the Central Bank of Russia, which bought $4.2bn last month, compared with just $2.8bn in January."

The CBR too attributed the outflow to cutting foreign debt by the Russian banks and simultaneous piling of export cash on accounts. In the first half of 2018 this was neutralised by the regular purchases of foreign currency by the finance ministry on the open market, which was halted in the second half of 2018 following sanction-induced market volatility. Sberbank CIB expects capital outflow to gradually slow in the upcoming months and to amount to $25bn-30bn for 2019 overall.   

In trade there were a few changes. Russia’s main buyers of goods remain the same, led by China that is purchasing a steady $60bn worth a goods a month followed by the Netherlands and Germany with $46bn and $36bn respectively. From the emerging Europe states Belarus and Turkey remain Russia’s biggest customer of goods, buying $23bn each in January.

The first change in the list is Ukraine’s continued slid down the roster of partners, falling from 13^th place to 18^th place with purchases of Russian goods decreasing from $10.4bn in December to $9.98bn in January. Ukraine is well behind Belarus despite the fact that the country is about three times larger.

Overall, the volume of goods Russia sold to its main trade partners fell slightly in January from $411bn in December to $407bn in January.

There were almost no changes in the structure of the suppliers to Russia although the overall volume of imports was down slightly from $227bn in December to $220bn in January, leaving Russia with a substantial trade surplus in goods.

While Russia continues to cut exports to Ukraine the level of imports from Ukraine remained roughly stable at $5.8bn in January leaving Ukraine is a substantial trade deficit in goods of a bit more than $4bn.

 

This article is from bne IntelliNews Russia monthly country report. Sign up to receive the report to your inbox each month, covering the slow moving macro- and micro-economic trends, the major political news and a roundup of the main sectors and corporate news. The first month is free and you can unsubscribe at any time.

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