The International Trade Analyses Center Trade+ has analyzed the influence of the quarantine measures on trade, in order to help Ukrainian exporters to plan their work.

The possible loses of the exporters during the corona crisis depends on 2 factors: strictness of the quarantine measures and the products, exported by Ukraine.

The experts’ decision was based on the fact that the strict measures will significantly influence the consumer demand in different countries, while the food products demand will be the same, regardless of crisis. For example, during the world economic crisis in 2009, the total Ukrainian exports decreased by 40%, and the agricultural products export – only by 12%.

The dramatic exports decrease: in Poland, Russia, Italy and Hungary

The Intensified quarantine measures have been introduced in Poland, but the epidemic is not declining, so, the implemented restrictions may be continued. Poland is on the second place among other countries, where Ukraine exports goods. In 2019, our country exported to Poland goods worth 3,3 billion USD. Mostly, those were industrial products. Unfortunately, because of the strict quarantine measures in this country, the biggest drop in Ukrainian exports in 2020 is expected there.

There are less restrictions in Russia, in comparison with the EU countries, but the epidemic is quickly spreading and due to this fact, the quarantine measures may become more severe. In 2019 Ukraine exported to the Russian Federation goods worth 3,2 billion USD. Mostly, those were industrial products. Even despite, weak quarantine restrictions, the experts predict a significant decline in Ukrainian exports to this country.

Among European countries in March 2020 Italy was the mostly influenced by the pandemic. The severe quarantine measures were implemented there. The country experiences significant economic loses and the restrictions will be in force for a long time. In 2019 Ukraine exported to Italy goods worth 2,4 billion USD. More than half of the Ukrainian exports to this country belongs to ferrous metals. In addition to this, Ukraine delivers to Italy grain, fats and oils. Due to severe quarantine measures and our country’s industry-oriented exports to Italy, the experts expect a significant decline in the Ukrainian exports to Italy.

In Hungary only food stores are opened. The quarantine measures are severe and the epidemic continues to spread. In 2019 Hungary bought Ukrainian goods worth 1,6 billion USD. Mostly, those were industrial products and this fact would badly influence the demand for Ukrainian goods in 2020. All this, combined with the strict quarantine measures, can significantly reduce Ukrainian exports to the country.

The medium exports decrease: in Turkey, Germany, Egypt, India, the Netherlands, Spain

There are strict quarantine measures in Turkey but the majority of Ukrainian exports to this country belongs to agricultural products. So, the moderate decline in exports to this country is expected.

The same situation is with exports to Spain, Egypt and India. In these countries it is almost non-diversified. But, if the further restrictions will affect the agricultural sector, then the exporters to these countries may suffer the most.

In Germany the quarantine measures, in comparison with other countries, are mild but the industry-oriented exports of Ukraine to this country, is not in Ukraine’s favour. That is why, the experts expect the mild decline in exports to this country.

In the Netherlands the quarantine measures were not strict at the beginning but but later they were intensified. This country buys mostly agricultural products in Ukraine. Due to this fact, the experts expect the mild decline in Ukrainian exports to this country.

Slight exports decrease: in China, Belarus

The crisis will have the least impact on Ukraine’s trade with China and Belarus. This is very good news because China is the largest trade partner of Ukraine, according to the results of 2019. Ukraine exported there goods (mostly agricultural products) worth 3,6 billion USD. Moreover, Ukraine has a potential to significantly increase exports of agricultural products to China.

Belarus is the only opened country in Europe, which helps to connect to the rest of the world. The quarantine measures there are minimal, that is why the demand for Ukrainian products in this country will not significantly drop. In 2019 Ukraine exported to Belarus products worth 1,5 billion USD. The majority of the exported goods were industrial products but the agricultural products also had a significant share. The experts expect that the decline in Ukrainian exports to this country will not be significant.

Prepared within the project of the Kyiv School of Economics and VoxUkraine “Virus Economy” - a series of studies on the impact of the COVID-19 pandemic and global turbulence on the economy and social life in Ukraine.

Reference source: Economichna Pravda