Foreign Trade Balance in 2012 was Unable to Remain Positive

The National Statistics Committee data showed, the 2012 trade in goods balance was minus USD 412.7 million.

In Q4 of 2012 the foreign trade situation deteriorated due to the termination of petroleum products “controversial” export schemes and to the lack of potash contracts. Active modernization increases the investment imports volumes. In the near future Belarus can only hope for a favorable international market situation with potash fertilizers.

In the first 9 months of 2012 the trade surplus was USD 1 369.8 million. By year-end the balance was minus USD 412.7 million. In Q4 of 2012 all the international trade gains were lost. The main reason was the suspension of solvent schemes and termination of biodiesel exports in November 2012. An additional negative factor was the lack of potash fertilizers contracts with India and China, which resulted in potassium chloride decreased exports to USD 460 million in Q4 2012, which is USD 320 million less than in the same period of 2011.

Enterprises’ modernization has resulted in the increased investment imports. Active dairy-farms construction required equipment imports. Power generating facilities in Belarus need to be modernized, but it leads to increased equipment imports from China because of the related Chinese loans. The efficiency of equipment imports is questionable, since there are no qualitative improvements in foreign trade in terms of natural gas and electricity imports.

In 2013, Belarus will face increased competition in the Russian market for the majority of the supplied goods, foodstuffs in particular, due to Russia’s WTO accession. Belarus is incapable to increase oil exports substantially because of the Belarusian refineries’ existing capacity. Therefore, potash fertilizers are the only export item, which could have a meaningful impact on international trade balance.

In 2013, Belarus’ performance is not likely to repeat the 2012 success without innovative schemes. Stirring up modernization in the long run may improve international trade results, but in 2013 it may cause an increase in imports amid falling exports of Belarusian goods. Only potash fertilizers can improve the negative situation in the international trade, but still unable to entirely compensate for the solvent schemes’ suspension.