Exports to Russia on the rise

02/10/2017 15:05
Exports to Russia grew to nearly 3.2 billion euros during the first seven months of 2017, i.e. 35 percent more than in the same period last year. Exports of Dutch-made products increased by 40 percent to 2 billion euros, while re-exports rose by 28 percent, according to the latest export figures released by Statistics Netherlands (CBS).

Despite this growth, the value of goods exports was still 20 percent lower than in 2013, when political and economic developments began to affect exports to Russia. The trade boycott of several food products, imposed by Russia in January and August 2014, partly contributed to the decline in exports, and still remains in effect. CBS is not able to quantify the effect on exports.

In addition to import restrictions, exports to Russia have been heavily affected by currency fluctuations in recent years. During the first seven months of 2017, the value of the euro against the Russian rouble was on average 17 percent down on one year previously. On the other hand, the euro was more expensive in 2017 than in 2013: on average, by 55 percent. A higher currency value usually has an adverse effect on the export position.

In 2017, Russia’s economy improved again, accompanied by increasing imports. Previously, the overall economic development in Russia was not positive: its economy shrank between 2013 and 2016 and total imports fell by over 30 percent during this period.

Food exports reduced by half

The Dutch agricultural sector and food industry were directly hit by the 2014 boycott restrictions. Compared to the period January-July 2013, when exports were unrestricted, exports of agricultural and food products produced in the Netherlands were more than halved.

From January to July 2017, 213 million euros in Dutch agricultural and food products were exported to Russia, versus as much as 477 million euros four years previously. Virtually no meat or dairy products are exported to Russia anymore.

More agricultural machinery and greenhouses

Manufacturers of greenhouses and agricultural machinery, however, saw an increase in exports relative to 2013. These goods exports to Russia were up by 71 and 39 million euros respectively between January and July 2017 relative to the same period in 2013. The number of exported lorries and pharmaceuticals was also significantly higher than in 2013.

Food exports to Russia were down, as well as the export of flowers and plants, which has been reduced by nearly half since 2013. Dutch growers were mainly impacted by a more expensive euro and Russia’s economic contraction between 2013 and 2016.

Decline in Russia’s contribution to Dutch exports

Due to the developments from 2013 onwards, Russia’s contribution to Dutch exports has diminished. In 2013, Russia still ranked tenth among the largest export destinations in terms of value, but has now fallen to number 15. Nearly 3 thousand Dutch firms were engaged in exports to Russia in 2016, i.e. one-quarter down on 2013.

From Russia’s perspective, the share of imported goods originating from the Netherlands dropped from 1.9 percent in 2013 to 1.7 percent in 2016. At the same time, the share held by the European Union in Russian goods imports fell from 43 percent to 38 percent. The share of non-EU countries in Russian imports, on the other hand, increased.