This is the ‘top 5’ of non-oil products that are exported to Russia and Ukraine

Bananas and processed, flowers, shrimp, fresh and canned fish, and industrialized coffee are the five main non-oil products that Ecuador exports to Russia and Ukraine, countries that are facing a war these days. They are data from the Central Bank of Ecuador (BCE) cut to December 2021 and collected by the Corporation of Exporting Guilds of Ecuador (Cordex).

Russia is also sold broccoli, banana and cocoa and processed. In total, non-oil exports to that country totaled $999.7 million.

Sales to Russia

And bananas and cocoa and processed products also arrive in Ukraine. Sales to that market totaled $124 million.

Sales to Ukraine

According to the Central Bank, Russia is the fifth largest market for local exports. While Ukraine is in 28th place. Sales to both countries have a similar composition.

In terms of imports, fuels, fertilizers and inorganic chemical products are brought from Russia, while soaps, fats and sugars are bought from Ukraine. Russia is ranked 14th, behind countries like the United States, China and Colombia, while Ukraine is ranked 86th.

A study by the consulting firm Oikonomics exposes some effects that the war will have on the local economy.

“Analyzing the relative importance of exports and imports of these products, it is found that Russia is an important destination for Ecuadorian banana exports, concentrating 21% of the total of this product to the world. With regard to shrimp, Russia is the sixth largest destination for these exports, representing 3%, and with flowers the second most important destination. Total exports to Ukraine are much smaller”, he indicates.

And as for imports, he adds, “Ecuador would be much more affected by a possible increase in the cost of fertilizers and fertilizers, since Russia represents the origin of 39% of fertilizer imports. While there would be no major impact on imports from Ukraine as it is not a significant trading partner.

In its study, the consultant explains that the armed conflict has increased the price of some commodities, such as precious metals and oil, as well as the appreciation of the dollar.

“The immediate effects for Ecuador will be an increase in income from the sale of oil and in the coming months greater upward pressure on the prices of fuels and derivatives. Regarding the appreciation of the dollar, this generates an automatic effect on the competitiveness of our products in the international market, since with a more expensive dollar all countries will require more money to buy the same amount of product and therefore they will prefer to buy products similar from other countries with lower prices”, summarizes David Gutiérrez, spokesman for the firm.

In its study, Oikonomics proposes two economic scenarios for Ecuador in the face of the war in Russia and Ukraine.

in the moderatethe country could experience a sharp reduction in exports of bananas, shrimp and natural flowers, an increase in the price of imported fertilizers, an increase in oil exports and the value of the dollar and greater dependence on its main trading partners.

in the severe, there will be a significant drop in exports to Europe and the US, a higher cost of production for Ecuadorian farmers, an increase in the price of fuels and derivatives, more expensive Ecuadorian products in international markets and a reduction in destinations of exports.

But what will depend on reaching one or the other? According to the consultant, we must see the duration, scope and magnitude of the conflict, as well as the sanctions that are applied worldwide against Russia.

When asked if the Government is preparing any aid for exporters who have economic losses due to these conflicts, Foreign Minister Juan Carlos Holguín he said that everyone loses in a war; and that although the Government is focused on resolving the situation of Ecuadorians who are fleeing Ukraine, the Ministry of Production is also working on support for entrepreneurs.