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Trade surplus – spikes to USD 19.7bn in March, two-year high


According to the CBR, the trade surplus in March jumped to USD 19.7bn, from the multi-month low of USD 12.4bn in February, hitting the strongest level in two years. The annual growth in exports advanced to 5.3% YoY in absolute terms; SA, it reached the highest level since February 2012. Imports dropped 5.5% YoY, following a 9.1% YoY decline a month ago.

In separate news, the Federal Customs Service has published its first estimate for April non-CIS imports. The headline figure was USD 23.0bn, with the YoY contraction of 6.0% deepening from the 4.4% YoY decline in 1Q14.

Ultimate message of the recent external trade report is that at the beginning of this year following the rouble weakness internal rebalancing kicked off and will likely translate into a full-blown trend near term. Thus, contracting imports was expected given a higher cost of imported goods and dampening local demand. However, it was not only shrinking imports that empowered external trade surplus to reach its 2-year high in March, but also jumped exports.

The latter was greatly driven by almost 45% YoY increase in oil products exports. Such a scale of YoY increase looks compensative for a 16% YoY plunge in February, thereby in total over 1Q14 oil products exports advanced at a more reasonable pace of 12.4% YoY. Note that YoY upturn in oil products exports will likely persist (primarily on expanding volumes YoY (new production capacity)) and offset contracting crude oil exports.

As for April, faster and broad based drop in imports with even food imports started to decline (on imposed ban on EU meat imports) alongside with a spike in gas exports (according to MinEnergy, +17.4% YoY; partly owing to beneficial base effect), despite normalized exports of oil products, might have supported external trade surplus near elevated levels.

Looking forward, we expect further internal rebalancing with dropped imports and stagnant exports that will help the rouble to stabilize near a new equilibrium.

Daria Isakova, Vladimir Kolychev
VTB Capital analyst


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