Russia's Trade Dynamics Shift to Asia Amid Sanctions
In the face of unprecedented Western sanctions over the past two and a half years, Russia's foreign trade landscape has undergone significant transformation. According to Ivin, the Deputy Head of the Federal Customs Service of Russia, the country has seen a notable shift in its trading partners, with Asian countries emerging as primary partners. This shift is characterized by a substantial increase in trade with China, which now accounts for 34% of Russia's foreign trade, followed by India at 9% and Turkey at 8%.
Despite the challenges posed by sanctions, Ivin stated that trade has not collapsed; in fact, it has grown in certain aspects. The volume of Russia's foreign trade has seen a slight decrease of about 4.5% in physical terms and approximately 2.5% in value since the beginning of the year. This decline is attributed largely to the reduction of trade with Western nations, including the European Union, the United States, and Japan, rather than internal market failures.
Changes in Commodity Structure and Future Projections
The structure of Russia's exports remains dominated by traditional goods, with energy resources constituting around 60% of total exports. Food products have also seen growth, now making up about 10% of exports. Other significant export categories include metals (9%) and chemical products (8%). Looking ahead, Ivin expressed optimism about reaching a trade turnover of over $700 billion and 1 billion tons by the end of 2024.
Challenges in Payment Systems and Customs Revenue
Despite the positive outlook, Russian companies continue to face challenges with payment systems for imports and exports due to fears of secondary sanctions from the West. While the customs service is not directly involved in resolving these issues, it acknowledges that many large industrial enterprises are struggling to establish reliable payment chains. Nonetheless, trade continues to flow, indicating that solutions are being found.
In terms of customs revenue, the Federal Customs Service reported a collection of 5.1 trillion rubles in the first nine months of the year, marking an 11.5% increase from the previous year. Notably, the structure of these payments has shifted, with import payments growing to 74% of the total, a reversal from previous years where export payments dominated. This change aligns with the government's objectives to strengthen import payment administration while reducing regulation on exports.
