Ukraine external goods trade balance switches to deficit in June

Ukraine’s external goods trade balance switched to a
USD 648 mln deficit in June from a USD 44 mln surplus in the prior month, the
State Statistics Service said in its preliminary report published on Aug. 14.
The seasonally adjusted goods trade deficit reached USD 717 mln (vs. a USD 409
mln deficit in May) amid 7.9% m/m growth in adjusted exports and a 15.4% m/m
surge in adjusted imports.

Goods exports fell 5.7% yoy in June to USD 3.4 bln
(vs. a 24.1% yoy drop in May). The decline was mostly driven by falling exports
of ferrous metals (-17.1% yoy) and grains (-22.2% yoy).  At the same time,
exports of food oils and fats surged 31.2% yoy, chemicals exports jumped 22.1%
yoy, and machinery exports picked up 10.1% yoy.

Goods imports declined 14.3% yoy to USD 4.0 bln in
June (vs. a 33.1% yoy plunge in May). In particular, imports of energy products
plummeted 48.9% yoy, machinery imports decreased 7.0% yoy, and imports of
chemicals dropped 9.0% yoy. At the same time, imports of foods jumped 26.0%
yoy.

In 1H20, the goods trade deficit amounted to USD 1.3
bln (vs. USD 3.8 bln in 1H19). Goods exports slid 6.4% yoy, while goods imports
dropped 14.3% yoy.

Evgeniya Akhtyrko: Ukraine’s
exports in June were mostly restrained by weak demand for the two major exports
items – ferrous metals and grains. On the other hand, the performance of other
exporters grew significantly year-on-year. Robust growth in consumer goods
imports, particularly foods, offset a declining imports trend.

We expect further renewal in both goods exports and
imports in the nearest months. Exports results will mostly depend on the demand
for Ukraine’s ferrous metals and grains at the external markets, while further
improvement of imports is likely to depend on the renewal of consumer demand
and the situation at Ukraine’s Forex.