EXPORTS

UKRAINE TURNS WEST: Poland replaces Russia as the number one Ukrainian export market

Egypt, China and Turkey make up list of top five export markets as Putin’s war forces Ukraine to go global

UKRAINE TURNS WEST: Poland replaces Russia as the number one Ukrainian export market
A Polish supermarket offers congratulations on Ukrainian Independence Day. As well as being home to one of the world's largest Ukrainian diasporas, Poland is also now Ukraine's top export market
Business Ukraine magazine
Wednesday, 01 May 2019 15:30

Poland was the number one export market for Ukrainian goods during the first quarter of 2019, displacing Russia from the top spot for the first time since Ukraine gained independence in 1991 as Ukrainian exporters continued to go global. Poland imported goods from Ukraine worth USD 818 million, almost 10% more than the USD 759 million in exports to traditional trading partner Russia. In a reflection of Ukraine’s increasingly global trading horizons, the country’s remaining top five export markets in the January-March 2019 period were Egypt (USD 652 million), China (USD 640 million), and Turkey (USD 638 million). Overall, Ukraine saw exports rise by 7% year-on-year in Q1 2019 to USD 12.3 billion.  

Ukraine’s trade with Russia has plummeted since 2014 and the onset of Vladimir Putin’s hybrid war, which includes military, cyber, informational and economic dimensions. The Kremlin has liberally deployed trade embargos throughout the past five years, with the latest round of bans on Ukrainian imports put in place in December 2018. Prior to the outbreak of hostilities, Russia had long been unassailable as Ukraine’s dominant trading partner, accounting for approximately 24% of Ukrainian exports and 30% of Ukrainian imports in 2013. These close economic ties afforded Moscow considerable influence in Ukraine, but the ongoing trade war within the broader undeclared war between the two nations has served to erode this position.

Faced with the loss of access to Russian markets (and difficulties in exporting to other former Soviet nations due to a Kremlin-imposed ban on cargo transit via Russia), Ukraine has made significant strides since 2014 towards entering new global markets. The country signed a landmark Association Agreement with the European Union in summer 2014, which includes a free trade component. In the past three years, Ukraine has also concluded free trade agreements with Canada and Israel, with a similar Turkish FTA expected in the coming months.

Last year alone, Ukrainian agricultural exporters entered 85 new global markets, highlighting the economic importance of the agribusiness sector for a nation once famed as the breadbasket of Europe and now aiming to play a central role in global food security. The agriculture sector has been a key driver in the process of broadening Ukraine’s international trade horizons. In 2018, Ukraine ranked in fourth place among agricultural exporters to the EU with total annual volumes of USD 6.3 billion. Meanwhile, overall agricultural exports reached a record high of USD 18.8 billion, with India the country’s largest single agricultural export market accounting for USD 1.8 billion. Ukrainian agricultural exports remain on a steep upwards trajectory, growing by 24.4% in the first two months of 2019 to reach USD 3.5 billion.

With no end in sight to Putin’s hybrid war and a fresh round of Kremlin trade bans set to enter into force in early summer 2019, the dramatic decline in Ukraine-Russia trade looks set to gain further momentum even as Ukrainian exports to global markets continue to grow. This shift in the geography of Ukraine’s export economy will reduce Moscow’s ability to leverage its influence in Kyiv, hampering Russian attempts to derail Ukraine’s Euro-Atlantic integration ambitions.   

Business ukraine current issue

Business Ukraine magazine issue 05/2019

Business ukraine reader survey

Which Ukrainian city is best placed to develop as an international tourism destination?
Which Ukrainian city is best placed to develop as an international tourism destination?
You must select at least one item to vote!

Social media