Petroleum products exports to Russia as a source of bilateral trade growth
By the year-end, trade turnover between Russia and Belarus might reach USD 50 billion.
Further integration within the CES assumes mutual trade growth. Belarus has a limited number of goods with good export potential in 2013. Partial reorientation of petroleum products supply to the Russian market will help making the declared bilateral trade growth closer to reality.
At the end of 2012 Belarusian exports to Russia rose from USD 14.5 billion in 2011 to USD 16.3 billion. Imports from Russia increased from USD 25.5 billion in 2011 to USD 27.5 billion in 2012. Trade improved from USD 40 billion to USD 43.8 billion. On March 15th at a meeting of the Supreme State Council a new benchmark in economic cooperation between the countries was announced. Mutual trade by the end of 2013 could reach USD 50 billion.
From all Belarus’ trading partners, Belarus’ supplies to Russia have the widest assortment of Belarusian products. The main exports include machinery, food products, and tires. In early 2013 there was a negative trend in machinery exports, and, above all, of the largest export product – trucks. Partly, the drop in machinery exports was compensated by dairy products exports: condensed milk and cream exports in January 2013 increased by 23.5 million compared with January 2012. The largest increase in exports to Russia in value terms concerned petroleum products exports: in January 2013 increased by 12 times compared with January 2012 from USD 4.2 million to USD 50.2 million.
Preliminary assessment indicates there will be further increases in petroleum products supply from Belarus to Russia, above all, of gasoline AI-92 K5 Euro. Gasoline supply growth is linked to Belarus’ commitments to deliver petroleum products to the Russian market worth 3.3 million tons in 2013. In 2013 Russia will start the planned repairs at its refineries, which could increase the demand for Belarusian petrol. Reorientation of petrol supply from the European market to the Russian will reduce exports to the EU, and will increase trade with Russia. This will help to preserve the oil supply at 5.5 million tones quarterly, increasing imports from Russia and, consequently, bilateral trade. An additional factor is the growth of bilateral trade in services between the two countries.
Thus, Belarus’ obligation to counter-supply the petroleum products helps to increase the bilateral trade volumes and allows the parties to state the positive dynamics due to the deepening of cooperation in the Customs Union framework. However, export reorientation will result in further strengthening of the Russia’s influence on Belarus’ economic processes and reduce exports diversification.