EU dominates Ukraine’s trade despite Russian comeback

Outlook

Ukraine’s trade with Russia and the EU is recovering after a slump caused by political turmoil and conflict. Russian commentators have made much of last year’s surge in Ukrainian-Russian trade in goods: exports rose by 10% and imports by 40%.

However, these increases are from all-time lows in 2016. Russia’s share in total Ukrainian exports has plummeted from 24% to 9% and imports from Russia have halved to 15% of Ukraine’s global imports, whereas the EU now accounts for more than 40% of Ukrainian trade.

Russia will remain an important buyer of Ukrainian steel products, alumina, machinery and clothing due to sustained demand and lack of alternative markets.

Impacts

• EU countries will become even more important partners as the Association Agreement facilitates trade.
• Apart from defence-related items, trade with Russia will continue despite the conflict and hostile rhetoric between Moscow and Kyiv.
• Ukraine will remain reliant on Russia for coal, coke, oil products and nuclear fuel despite the breakdown in natural gas supplies.
• Coal purchased from Russia is vital because supplies from eastern Ukraine have stopped, but some of it may originate in the rebel regions.