Ukraine external trade reaches USD 3 bln surplus in 1H14

Ukraine's general trade balance (goods and services) in 1H14 reached a USD 3.0 bln surplus compared to a USD 1.6 bln deficit a year ago, according to an UkrStat report released on Aug. 14. A trade surplus in services (USD 3.2 bln in 1H14) played the main role in such a positive result while the trade surplus on commodities was only USD 568 mln for 1H14. The resulting surplus has been adjusted by excluded tolling operations.



On commodities trade, goods imports shrunk faster (-17.9% yoy) in 1H14 compared to their exports (-5.2% yoy). Imports have been falling primarily on the back of contracting demand for vehicles (-48.6% yoy), metals (-29.8%) and machinery (-23.0% yoy). The biggest export declines have been in machinery equipment (-44.9% yoy) and chemicals (-24.2% yoy). At the same time, food exports increased 8.3% yoy.



For June 2014, the trade surplus reached USD 611 mln compared to a USD 606 mln deficit a year ago. Imports declined 17.4% yoy on the back of falling machinery equipment (-61.4% yoy), metals (-39.8% yoy), vehicles (-28.8% yoy) and chemicals (-20.4% yoy). Meanwhile, energy imports rose 34.1% yoy due to doubled natural gas imports. Exports declined modestly (-5.4% yoy), weighed down by a slump in machinery equipment (-45.5% y/y). Metal exports rose 5.5% yoy during the month.



Alexander Paraschiy: Th external trade results in 1H14 look rather strong. For sure, the gas price for April-June will be revised (currently assumed at USD 268.5/tcm), which means that the real trade balance will have approached a USD 200 mln deficit (under a USD 360/tcm gas price) instead of a reported USD 568 mln surplus. However, the result is still better than the USD 4.0 bln deficit for 1H13.



External trade prospects are under a question mark given the intensified armed fighting near Donetsk in July and August. However, in light of steady two-digit contraction of non-energy imports (-29.5% yoy in June for commodities) and an anticipated decline in energy imports (a large part of gas has been already imported), we expect the trade balance will not worsen much. Against this backdrop, we are keeping our forecast (according to UkrStat methodology) of a trade deficit near USD 1.0 bln in 2014 compared to USD 13.7 bln a year ago.

Источник: Конкорд Капитал