Russia foreign trade two years on its all change

The past year has seen significant changes in Russia's foreign trade turnover. Sanctions and geopolitical instability compelled the economy to adapt to wholly new circumstances. Notwithstanding these challenges, export volumes demonstrated growth, rising by 0.5% to reach $278 billion. Russian suppliers demonstrated a strategic focus on key markets in Asia, Africa, and the CIS countries. What was the structure of exports and imports in 2024?

How have exports have The total volume of exports in value terms, according to the Federal Customs Service, increased by 0.5% in 2024 and amounted to $278 billion dollars, says Mikhail Khachaturyan, PhD in Economics and Associate Professor of the Department of Strategic and Innovative Development at the Financial University. Significant changes have also been observed in the structure of supplies, with Asian countries taking the leading positions in terms of exports in value terms last year ($209.2 billion).

The European Union is in second place according to the expert. Despite facing challenges such as sanctions, restrictions on payments, and other negative trends, the European Union's exports reached $43.8 billion. In third place, African countries recorded a total export volume of $16.4 billion. This was mainly oil and gas, metals and fertilisers although around $1 billion was fish products and grains.

Lidiya Roy, head of the creative industries laboratory at the Moscow School of Management Skolkovo, has stated that the reorientation of exports to Asia, the Middle East and the CIS countries has become the main feature of 2024. This trend is explained by new logistical factors and economic circumstances. Sanctions, in particular, have led to increased logistics costs and restrictions on financial transactions with foreign partners. Consequently, companies are enhancing their domestic production capacities and exploring new export destinations.
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Lidiya further elaborates on the strategic shift, citing the ascendant purchasing power of the Chinese middle class and the Middle Eastern market's demand for premium goods as key factors.
Russian companies are adapting their products and marketing strategies to the specifics of these markets. Such changes include the localization of packaging, design, marketing materials, and the use of digital tools.

With regard to the Russian Federation's imports, which countries are they now being sourced from?
In 2024, there has been an increased trend of logistics of goods from Southeast Asian countries, as noted by Dmitry Arzhanykh, co-founder of the SLK group of companies. China has emerged as the clear leader in this regard. According to the General Administration of Customs of the People's Republic of China, the volume of imports from January to November 2024 amounted to $104.19 billion. India ranked second with Russia's import volume in value terms of $35.8 billion for the first half of 2024, as highlighted by Mikhail Khachaturyan.
In the same period, the volume of imports from Belarus amounted to $12.5 billion.For the countries of South and Latin America, this figure for 11 months of 2024 reached $9.3 billion, while the top 5 is rounded out by African countries with an import volume of $2.2 billion.
Turkey, the UAE, the European Union, South Korea, Taiwan, and Singapore also acted as suppliers, Arzhanykh adds to the list.Among the CIS countries, Uzbekistan and Kazakhstan were among the largest exporters of goods to Russa, clarifies Nikolai Vavilov, a specialist in the strategic research department of the TR company.

Arzhanykh also notes that the overall volume of goods imported into the Russian Federation has decreased slightly due to importers experiencing difficulties related to payment throughout 2024.

The ongoing trade and financial restrictions are expected to persist, exerting a negative influence on foreign trade turnover between Russia and EU countries. Consequently, Dmitry Zavyalov, Director of the Higher School of Economics and Business at the Plekhanov Russian University of Economics, anticipates an expansion in the share of Asian and African countries in both exports and imports.
"It is important to note that Asian countries are also a bypass supply channel for sanctioned European goods, which is why logistics chains have become more complicated, and it is extremely difficult to give an unambiguous assessment of the real source of import flows," the expert believes.
Supplies from the EU have significantly decreased in the past year, as Dmitry Arzhanykh notes. While shipments from the European Union constituted approximately 50% of the total import volume prior to 2022, this figure has decreased significantly, reaching approximately 25% in 2024.

Nikolai Vavilov further elaborates on the decline in deliveries, stating that the volume has decreased from $60 billion for the initial eight months of 2023 to $43.8 billion for the corresponding period in 2024.

Overall, export volumes to the EU fell by 27.2%, while imports fell by 10.3%.Settlements in trade with EU countries were mainly conducted through special accounts in euros and rubles.
In the second half of 2024, there was an improvement in the situation with foreign trade turnover with EU countries. The primary Russian exports to the EU during this period included fertilizers, natural gas, and iron and steel, while there was a decline in nickel and crude oil supplies.

The expert forecasts that in 2025, the current trend of a decline in the share of exports and imports to the EU and other unfriendly countries will most likely continue, while the share of exports to friendly and neutral countries is expected to rise.
Mikhail Khachaturyan has stated that the basis of Russian exports remains mineral goods (oil, gas and their derivatives), metals and products made from them, food products and agricultural raw materials. Dmitry Zavyalov has said that of the total volume of supplies, 61% were mineral raw materials, 14.5% were metals, and 10% were food and agricultural products.
The primary categories of imports comprise equipment and electronics, clothing and footwear, automobiles and related components, food and beverages, and medical products and equipment, as outlined by Khachaturyan.
In addition, in 2024, equipment for various purposes (processing, construction, etc.), machine tools, pumps, compressors, fans, air conditioners, measuring instruments, plastic and rubber products, ferrous metal products, tableware, cutlery and kitchen utensils, furniture and components, and so on were actively imported to Russia, Dmitry Arzhanykh lists.In what currencies was the trade conducted?
Mikhail Khachaturyan notes that Russia aims to settle trade in national currencies, with the Central Bank reporting that the dollar, euro and currencies of unfriendly countries account for around 18% of settlements. Currencies of friendly countries (tenge, rupees, dirhams and yuan) account for 42%. The ruble is the most popular currency for payments related to exports and imports in several regions, including the Caribbean (59.4%), Oceania (73.1%) and Africa (92%).
The transition to settlements in national currencies is largely driven by challenges in making payments under contracts, according to Dmitry Arzhanykh.He notes that most Chinese banks stopped accepting funds from Russian importers at the beginning of 2024. This has led to a significant number of companies having to make substantial changes to their financial logistics systems, according to the expert.
In this regard, Dmitry Arzhanykh acknowledges that difficulties associated with payment under trade contracts and the disruption to international logistics chains will continue into 2025.

However, forecasts for the export of Russian goods in 2025 remain optimistic, according to Lidiya Roy. The primary growth is anticipated to be driven by further expansion into Asian, Middle Eastern, and CIS markets.

He anticipates that the utilisation of marketplaces, social networks and local partnerships will emerge as a pivotal strategy for accessing new markets. However, success will depend on Russian companies' ability to overcome competition and geopolitical risks, while continuing to adapt products to the specifics of target markets.