Russian 2021 Exports To Asia Are Now Close To The Levels With Europe
The EU is diminishing in the longer term in importance in Russian export trade significance while Asian exports heat up. Brussels could find its current leverage on Moscow reduced.
Russia has traditionally been a European play, however since sanctions were imposed upon the country by the EU in 2014, Russian exporters have been looking to develop markets to the East.
That is now having a profound impact, Russia shipped US$335.5 billion worth of goods around the globe in 2020, but of that, 49.3% of Russia’s exports by value were delivered to European countries while 42.2% were sold to importers in Asia. Of these, China, Kazakhstan, South Korea, and Japan were the largest markets.
While often considered a limited energy play, Russian exports have also been diversifying. Russia’s biggest export products by value in 2020 were crude oil, refined petroleum oils, gold, coal, and wheat. In aggregate, those major exports accounted for 46.6% of overall exports sales from Russia. That percentage suggests a relatively concentrated range of exported goods, but even so energy is now less than 50% of the Russian export market.
New export lines such as selling pork and chicken to Vietnam, which has a Free Trade Agreement with Russia, have been booming. It is a trend that is likely to continue as concerns the Russian pivot to Asia. Singapore signed off an FTA with Russia (as part of the Eurasian Economic Union) while other major Asian markets such as Indonesia, Thailand and India are all currently negotiating FTA. China has too and signed a non-preferential agreement back in 2018 – negotiations are continuing as concerns tariff reductions.
As concerns new export trends to Asia, the regional appetite for gold and jewelry continues – Chinese and Indian consumers are among the world’s top buyers. Accordingly, it is no surprise that Russia, with its gold and gemstone reserves among the largest in the world has seen its exports to Asia increase by a whopping 98.9% between 2019-2020.
Cereal exports also rose by 20.4% during the same period – China is home to 20% of the global population yet just 5% of its arable land, while the huge, young, and more vegetarian diets in Asian are again a good match – Russia is the world’s largest producer of grains and especially wheat.
Russian IT is also in demand – computers and related products accounted for export values of about US$8.3 billion.
The underlying message is clear – Asia will replace Europe very soon as Russia’s largest export market, and this will have clear implications for the current importance the EU feels it has over Russia – it is clearly diminishing.
This also means – and especially when the pending EAEU FTA come into effect – that there are significant market opportunities for Russian exports to Asia. Russian businesses should be studying these trends and conducting analysis on where and how they can generate market penetration into Asia – as the demand begins to eclipse that in Europe.
Here are some introductions:
- What Russian Companies Can Sell To China
- What Russian Companies Can Sell To India
- What Russian Companies Can Sell To Indonesia
- What Russian Companies Can Sell To The Philippines
- What Russian Companies Can Sell To Singapore
- What Russian Companies Can Sell To Thailand
- What Russian Companies Can Sell To Vietnam
Our firm has offices in each of these countries and can assist Russian businesses with their export and trade development plans. For assistance with market research into Asia, please contact Maria Kotova at firstname.lastname@example.org
Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact Maria Kotova at email@example.com for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.