Goods trade deficit narrows on grain exports

Ukraine’s November goods trade deficit improved to USD 1.0 bln from USD 1.4 bln a year ago and from USD 1.3 bln in October, according to UkrStat. November exports declined 5.9% yoy and imports fell 10.2% yoy. Still, the 11M12 result showed an ongoing increase in the trade deficit to USD 13.8 bln from USD 12.8 bln in 2011, with imports growing 2.9% yoy and exports 1.9% yoy. Exports have benefited mainly from grain supplies (+55.5% in November), fats and oils (+9.5% yoy), processed food (+25.2% yoy) and transportation equipment (+23.0% yoy). These four groups make up 34.7% of exports. At the same time, metal exports (24.5% of exports) continued falling, decreasing 20.1% yoy in November. On the import side, traditional items kept falling – machinery equipment by 21.1% yoy and transportation equipment by 22.4% yoy. Only chemical products rose (+15.1% yoy). Energy imports also slid (-22.4% yoy in November) on the back of declining oil imports (-78.5% yoy), coal imports (-48.5% yoy) and gas imports (-6.1% yoy).

Alexander Paraschiy: A temporary upsurge in grain exports and slump in oil imports are the main reasons for the strengthened November trade balance. With nearly 22 mln tons of grain scheduled for export in the 2012/13 marketing year, Ukraine has already shipped nearly 14 mln tons (more than 60% of the state plan). Against this backdrop, we expect a drop in grain supplies in 1H13. In 2012, we estimate the trade deficit grew to USD 15.0 bln from USD 14.2 bln in 2011.