Foreign trade in July: expected results against suspension of innovative schemes
![Foreign trade in July: expected results against suspension of innovative schemes](https://belarusinfocus.pro/wp-content/uploads/2016/04/pictures1347359044_0.jpg)
With high probability it can be argued that a sharp slowdown in the foreign trade surplus is a direct consequence of the suspension of innovative schemes (export of solvents and thinners made from Russian oil products). Further foreign trade trend will depend on which schemes are suspended and for how long.
On September 3rd, Belstat published Belarus’ trade balance data in January-July 2012.
A trade surplus in January-July 2012 was USD 2013.8 million. In January – June 2012 the value was USD 1990.6 million. It would be wrong to conclude that the difference between the two figures made July surplus. Accurate data with monthly breakdown will be announced on September 15-16, and the data for January-June will be adjusted, changing the final balance.
There are a number of innovative schemes with a varying degree of dependence on Russia. The primary one – solvents production based on Russian naphtha supply. At the moment this scheme is suspended and is unlikely to be renewed due to a number of reasons. Solvents supply is under investigation by the Russian Investigative Committee and its outcome is not yet known. Moreover, the demand for straight-run gasoline is high, and it is more economically profitable for Russian companies to supply these products to other destinations.
Lubricants production is based on fuel oil component. The scheme could not be blocked entirely because fuel oil could be produced in sufficient volumes by Belarusian refineries. However, recently the supply of lubricants has decreased, which may be the result of unofficial measures taken against the Russian companies involved in these operations.
Biodiesel is supplied to two main regions: Latvia and Ukraine. Until now there were no problems with supplies to Latvia. However measures undertaken by Estonia with regard to cheap fuel from Russia in a while could affect a wide range of petroleum products, including those made in Belarus, as biodiesel shipments are significant and not only to Latvian market, but to all Baltic countries.
In Ukraine, as a result of both, economic and political processes, biodiesel supplies have been suspended and an investigation has been initiated by the TNK-BP concerning biodiesel supply from Belarus. Moreover, the decision concerning LINIK’s fate (Lisichansk refinery) has been announced, which could have a negative impact also on the traditional petroleum products supply from Belarus.
Therefore, if the majority of schemes are suspended, the share of ‘oil products’ exports in the foreign trade will decrease significantly and the share of imports – to a lesser extent. There are no other exports which could replace such exports. Potash supplies and machinery could compensate these losses to a certain extent. However, they cannot replace the decreasing export volumes entirely. Positive trade balance depends purely on the volume of innovative schemes. If all schemes are suspended, the trade balance will return to its negative values.
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