War in Ukraine has affected exports to Ukraine and Russia more than the pandemic

On February 24, 2022, the war in Ukraine began with the entry of the Russian army into the Donetsk and Lugansk provinces. In addition to the multiple victims it has caused, the conflict has had strong economic repercussions.

The most obvious effect on the economy was the rise in fuel, fertilizer, and grain prices. On the other hand, the United States imposed trade sanctions aimed at stifling Russia economically.

The war in Ukraine has had a greater impact on Colombia’s exports to that country and to Russia than the Covid-19 pandemic did. And among these two destinations, exports to Ukraine have had the most abrupt changes.

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Exports to Russia dropped after the war in Ukraine

The basket of products exported to Russia was not affected after the outbreak of the conflict. On the other hand, the amount of products sold to Russia has been reduced.

Colombia’s export basket to Russia

Colombia’s exports to Russia have historically been concentrated in flowers. From 2008 to 2014 flowers always represented more than 50% of total exports, according to DANE records. Since 2015, the importance of flowers decreased and since 2018 these represent about 20% of all products exported to Russia.

The declining importance of flowers in Colombia’s exports to Russia has been partly replaced by processed meat and coffee threshing. As of 2018, the sum of those two products accounts for more than 40% of exports (DANE).

Thus, meat products, coffee threshing and flowers account for 60% of external sales to Russia, a trend that did not change due to the war in Ukraine.

Drop in exports due to the war in Ukraine

Exports to Russia were not affected by the pandemic, rising from $94.6 million, in 2019, to $102 million in 2020. However, they did show a decline in 2022, following the start of the war in Ukraine.

While in 2021, $139 million dollars were exported from Colombia to Russia, in 2022 the figure dropped to $127.8 million dollars, according to DANE. In terms of volume, this meant a drop from 58,000 tons to 50,000 tons from one year to the next.

In 2023, the trend has remained the same. According to the entity, external sales to Russia in the first four months (January to April) of 2023 were down 39% compared to the same period of the previous year, going from $39.5 million, in 2022, to $23.8 million in 2023.

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War in Ukraine has major effects on exports to the country

In the case of exports to Ukraine, the military conflict between this country and Russia had a positive effect in the first year but has been very negative in 2023.

Colombia’s export basket to Ukraine

From 2010 to 2014, Colombia’s exports to Ukraine were concentrated in flowers and stone coal, the latter used mainly for thermoelectric plants. These two products accounted for more than 60% of exports. In 2012 and 2013, they even exceeded 80%.

As of 2016, coffee and banana threshing began to gain importance within Colombia’s export basket to Ukraine. In 2021, 56% of exports were plantains or bananas.

In 2022, after the war in Ukraine, bananas maintained their preponderance and charcoal regained some of its lost importance.

Exports to Ukraine increased in the first year of the war

Colombia’s exports to Ukraine were affected by the pandemic. Total quantities fell, in the first year, from 279,000 tons to 189,000 tons. However, due to the rise in prices of bananas, coffee, and coal, the drop in quantities was not reflected in the dollars exported.

On the other hand, with the war in Ukraine, Colombia’s exports to that country increased. These went from 32 million dollars in 2021 to 50 million dollars in 2022. In terms of quantities, this meant an increase from 50,000 tons to 350,000 tons (DANE).

However, in the first four months of 2023, exports to Ukraine dropped by a dramatic 98%. From January to April 2022, 45 million dollars were exported, while in the same period of 2023, only 714 thousand dollars were exported. This means that exports went from 330 thousand tons to only 79 tons.

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