On account of what export from Armenia to Russia recorded growth?
Armenia’s macroeconomic indices for 2016 were mainly disappointing. More or less consoling were data for external trade turnover. In 2016 export has grown by 20%, comprising USD 1 billion 782.9 million. From which: export to Eurasian Economic Union (EEU) member countries has considerably grown.
Thus, upon data issued by Eurasian Economic Commission (EEC) in 2016 export from Armenia to EEU member countries, compared with 2015, has grown by 53% and comprised USD 392.1 million.
Greater part of export—USD 371 million is shared by Russia (export to the country has grown by 51.5%). Export to Belarus has grown 2.1 times, comprising USD 14.1 million, growth temp to Kazakhstan is 42.9%, export volume—USD 5.9 million, and export to Kyrgyzstan has grown 2.8 times, however, export volume is yet to small—USD 1 million.
This circumstance is sometimes used to show that Armenia’s membership to EEU stared “working”, and Armenian producers started to take the Eurasian market. Is that so? To answer the question it’s necessary to look at the structure of export from Armenia to Russia, and on account of what it has grown. Large quantity knitted wear and clothes are being exported to Russia from Armenia. For instance, export of women’s textile clothing to Russia has increased 2.7 times, volume comprises USD 1.6 million.
Export of sweaters has grown by 83%, thus, comprising USD 5.8 million. There are also types, regarding which decrease has been recorded, providing volume amounting USD 50 million. Besides clothing and footwear, stones processed for memorials (about USD 6.5 million), vaccines (about USD 4 million) and etc. are being exported to Russia from Armenia. However, the main group is food, beverages and cigarettes, and growth has been provided due to this very group.
Champion of export growth from Armenia to Russia regarding both export volumes and absolute growth are strong alcoholic beverages, or more simply—brandy. In 2016 10.6 million liters of alcoholic beverages with 100% spirit content have been exported to Russia—more by 51% compared with the previous year. In value terms alcoholic beverages amounting USD 125.4 million have been exported in 2016, which comprises 1/3 of Armenia’s export to Russia. Compared with the previous year brandy export has grown by 56.9%. The next champions are tomatoes. In 2016 35842 tons of tomatoes have been exported to Russia from Armenia with USD 22.6 million customs value. To compare, it should be stated that in 2015 1129 tons of tomatoes have been exported with USD 1.5 million customs value. Reasons of rapid growth have been previously more touched upon.
Regarding export influential index has been recorded regarding grapes as well. In 2016 31737 tons of grapes have been exported to Russia from Armenia with USD 17 million customs value. In kind grapes export volume recorded 6 times growth, and by value—about 10 times. From the top 10 exported food export of wine has also grown by 50%, thus, comprising USD 4.5 million. Regarding other types of goods decrease has been recorded. To conclude, sharp export growth from Armenia to Russia is conditioned by export volumes of brandy.
What is brandy export conditioned by?
This question, has been repeatedly given in Armenian media outlets. Regarding the point that brandy export sharp growth should be reflected in tax indices of Armenian companies producing wine. Taxes they have paid should have been proportionally grown, however, that dynamics hasn’t been recorded.
Explanation should be sought in 2014 and 2015. The point is, that in late 2014 due to sharp depreciation of Russian ruble export volumes from Armenia to Russia have considerably decreased. Thus, in 2014 export from Armenia to Russia comprised USD 308.4 million, and in 2015—USD 245.2 million, from which: export of alcoholic beverages has rapidly reduced. In 2014 goods amounting USD 132.2 million have been exported, and in 2015 that figure decreased by about 40%, reaching USD 79.9 million. Thus, in 2016 export volume of alcoholic beverages in 2016 was less than in 2014.
Based on information at our disposal part of local producers refused to export goods to Russia due to ruble depreciation, instead it preferred to store and wait for favorable times. Apparently, that beneficial period was 2016: after certain stabilizing of ruble exchange rate local producers started to export goods not only produced on the same year, but those stored from 2015. Production volumes of alcoholic beverages also prove this. Pursuant data issued by the National Statistical Service of Armenia brandy production volumes in 2016 have grown by 27%, reaching 21.5 thousand liters from 17 thousand, i.e. temp of brandy production is twice less than the export temp. And volumes of vodka production have reduced by 13.7%, reaching 8217 thousand liters.
Concluding this all, it should be stated, that one shouldn’t get enthusiastic with export growth from Armenia to Russia, and say that Armenia is taking EEU market. Growth of 2016 is conditioned by the decline in 2015, which means in 2017 such growth will hardly be recorded. Surely, if serious steps shouldn’t be implemented to boost export.
By Babken Tunyan
