Foreign trade of Turkmenistan shows structural changes

Expert Trapeznikov underlined that the volume of exports without fuel and energy resources in 2021 increased by almost 70%.

The changes taking place in the world in the last year and a half harmed most economic indicators, especially at the macro level. In particular, the pandemic of coronavirus infection, and the restrictions imposed in connection with it, have harmed world foreign trade. It affected both quantitative foreign trade indicators and structural changes in this industry.

The foreign trade of Turkmenistan has also been significantly transformed in the above areas. Economic observer Valentin Trapeznikov touched upon the topic in an interview to CentralAsia.news.

Foreign trade turnover in 2020

So, in general, in 2020, which became the first year of the pandemic, the foreign trade turnover of our country decreased by almost 18%, and exports — by 30%. It happened due to a decrease in economic activity in all states, including the main foreign trade partners of our country, and, accordingly, to a drop in demand for energy resources, which form the basis of the export potential of Turkmenistan.

In particular, the export of natural gas compared to 2019 decreased by 10%, and oil products — by more than 20%.

Indicators of 2021

In 2021, the stabilization of the world economy had a positive effect on the indicators of foreign trade of Turkmenistan.

For example, in the first 4 months, the rate of decline in foreign trade turnover was 3,2%, while exports decreased by only 0,3%, amounting to more than 2.5 billion dollars compared to the previous year. The foreign trade surplus amounted to 824.9 million dollars, which is 18,4% higher than in 2020.

The decrease in the total volume of domestic exports was influenced by the decrease in the value of natural gas by 17,8%, which is explained by the negative trends in the price situation on the world market for this product. At the same time, the physical volumes of external supplies of natural gas in comparison with 2020 increased by 24,1%, petroleum products — by 23,5%, gasoline produced from natural gas — by 50,4%.

In the export of fuel and energy resources, there is also a tendency of growth in supplies of petroleum coke and petroleum products, the growth in value of which is 124,7% and 26,8%, respectively.

Structural changes

It is necessary to note the significant structural changes in foreign trade that took place in 2021. Thus, the volume of exports without fuel and energy resources increased by 69,1% compared to four months of the previous year and amounted to 546.8 million dollars. Moreover, if in 2020 the share of this group was 12,8% in total exports, then this year it reached 21,7%.

At the same time, the growth rate of the value of export supplies of electricity was 55,5%, sulfur — 3.0 times, fertilizers — 36,5%, glass and glass products — 105,2%, pipes, hoses and plastic fittings — 4, 0 times, textile materials — 63,2%, iodine — 4,8%, wool — 49,8%, licorice root extract — 57,9%, flour confectionery — 3.8 times, vegetables — 102,8%.

The basis of external supplies of vegetables is made up of tomatoes and that is about 87%. This is the main export food position of Turkmenistan. During the analyzed period, about 37.6 thousand tons of tomatoes for the amount of 41.4 million dollars were exported. At the same time, more than 92% of exports are directed to the EAEU countries (Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia).

For 4 months of this year, the total volume of imports amounted to more than 1.69 billion dollars and decreased in comparison with the previous year by 7,4%. At the same time, the import of technological equipment increased by 23,7%, while raw materials, on the contrary, decreased by 19,4%. Imports of non-food consumer goods decreased by 5,2%, and foodstuffs — by 11,5%.

Geographical structure of foreign trade

There have also been quite significant changes in the geographic structure of foreign trade. Thus, foreign trade turnover with the EAEU countries decreased by 9%. However, this was due to a significant decrease in imports from Russia — by 46,5%. For the rest of the EAEU countries, there is an increase in foreign trade turnover, Turkmen exports, as well as imports. In particular, export deliveries to Armenia increased by 5 times, to Kazakhstan and Kyrgyzstan — about 2 times, to Belarus — by 22,6%, and Russia — by 35%.

There was a significant increase in export deliveries to Iran and Ukraine — by 5.6 times, the UAE and Turkey — by 3.9 and 1.9 times, respectively. At the same time, exports to China decreased by more than 21%. External supplies to India and Azerbaijan also decreased.

Reorientation of external procurement

It should be noted that, along with a decrease in imports from Russia and China, there was a reorientation of external purchases from other countries. For example, imports from Azerbaijan increased by 2.7 times, the UAE — 1.5 times, India — 1.7 times, Ukraine — 1.4 times, Japan — 7.1 times, South Korea — 1.9 times.

Import substitution

The decline in imports is largely due to the implementation of import substitution programs in Turkmenistan.

In particular, due to the increase in the production of building materials, crops, livestock, and food products in the country, the import of ferrous metals and products decreased by about half, dairy products — by 1.5 times, cheese and cottage cheese — by 2.3 times, condensed milk — by 1.7 times, meat and meat products — by 1.7 times, rice — by more than 11 times, wheat — by almost one and a half times, vegetables — by 1.25 times, onions and garlic — by 1.5 times, potatoes — by 13%. The import of tomatoes and cucumbers almost completely stopped, the same happened to the export of potatoes in April.

Thus, in the last year and a half, significant changes have been taking place, both in terms of product nomenclature and geographic orientation in the structure of foreign trade of Turkmenistan. This is due to changes in the needs of the economy in certain commodity items, as well as to the implementation of a whole range of socio-economic programs that determine the diversification of directions for the development of the economy and social sphere of our country.

It should be mentioned that on July 5, the head of the Union of Economists of Turkmenistan, Yuri Aronsky, said that the foreign trade of the turnover in recent years has been declining due to an increase in domestic production. According to him, since 2015, Turkmenistan has been implementing a state program for the production of import-substituting products with a total value of 176 million dollars and it allows to increase production, as well as to achieve a noticeable increase in export volumes even amid crisis.

14 июл 2021, 11:15

Valentin Trapeznikov

Photo source: CentralAsia.news

Ключевые события