Russia: Exports and imports collapse in January; Ural oil price continues to recover
March 4, 2015
Exports totaled USD 29.1 billion in January, which marked a 26.5% contraction over the same month last year. January’s print followed the revised 24.1% decrease observed in December (previously reported: -30.2% year-on-year) and marked the seventh contraction in the last eight months. In addition, January’s result represented the sharpest fall in overseas sales in over five years. Imports continued to nosedive, mainly reflecting a downturn in Russia’s economy, falling household consumption, lower investment and a weak ruble. Imports contracted 36.9% annually in January (December: -24.0% yoy) and represented the fastest decline in more than five years.
As a result of the deterioration in exports, the trade surplus narrowed to USD 15.9 billion in January, which was smaller than the USD 18.7 billion registered in the same month last year. In the 12-months up to January, the trade surplus totaled USD 185.9 billion.
In recent weeks, global oil prices have recovered modestly, having an impact on the price for Ural oil, which is Russia’s key export commodity. On 27 February, the Ural oil barrel traded at USD 60.5, which was 31.6% higher than the same day of the previous month. However, in annual terms the price of Ural oil lost 43.8% of its value. Despite expectations that oil prices will remain low this year, Russian authorities had confirmed that the country will not reduce oil output. Meanwhile, the Russian Central Bank published its assessment of the country’s economic outlook, where it sees two scenarios. Under a baseline scenario, the Banks expects the price for Ural oil to average USD 80. Under a worst-case scenario, the Bank sees oil prices averaging USD 60.
Author: Ricardo Aceves, Senior Economist