Russian Exports To South & Southeast Asia Show Significant Year-on-Year Increases

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The Russia-Ukraine conflict has produced unusual movements in Russia-Asia trade, as sanctions start to have an effect, yet the need for energy in Asia increases. Figures released by several Asian customs authorities have revealed that the majority of Asian exports to Russia were sharply down from a year earlier, with China the main exception. Western media have tended to display this as a result of sanctions imposition; however it is more likely to be a result of shifting supply chains and difficulties getting product received in Russia – many Russia-bound exports have been trapped as a result of European bans on shipping to Russia. This means that Asian exporters are facing either delays or trade distortions due to Western sanctions rather than their own unwillingness to supply, although Japan, Singapore and South Korea have placed some restrictions in place.

However, it is quite a different story when looking at Russian exports to South and South-East Asia:

Asian Imports From Russia March 2022 YoY Increase
China 52.3%
India 14.1%
Indonesia 42.9%
Japan 89.6%
Malaysia 60.2%
Philippines 47.9%
Singapore 40.5%
South Korea 43.6%
Taiwan 9.1%
Thailand 28.2%
Vietnam 84%
(sources: Trading Economics)

Asia is the world’s fastest growing region, and energy demand is rising sharply. In 2022, this is also driven by economic recovery from the pandemic.

Russia’s inroads into ASEAN, with the exception of the recent sanctions issue with Singapore, have been consistent and welcome. The country offers energy supplies into what is the fastest growing region in the world, with ASEAN’s energy supply needs growing at double the rates elsewhere. According to the IEA, ASEAN’s overall energy demand has grown by 80% the past two decades with this trend expecting to continue until 2040. Of the region’s ten countries, the four largest by electricity consumption, Indonesia (26%), Vietnam (22%), Thailand (19%) and Malaysia (15%), make up more than 80% of total demand in the region. Put another way – ASEAN needs Russian energy supplies. This more than compensates for the loss of the EU markets, and in fact will out-perform it in terms of future demand.

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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 russia@dezshira.com for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.

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