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Artur Eresko - Grain growers and steel workers as the engine of Latvian export

Artur Eresko - Grain growers and steel workers as the engine of Latvian export

In September in comparison with August the value of the Latvian goods in actual prices grew by 23.1% (!), of import - by 4.8%. This is evidenced by the data of

the Central Statistical Bureau.

 

After decline in August the Latvian export again approached the mark of 1 billion euro. The last time the exporters rose beyond a billion in October last year – at that time Latvia sold goods abroad for 1.062 billion euro in the space of a month. This September — 966 million euro. There are all chances to rise beyond a billion in October this year, when a new harvest from the Latvian fields goes into bakeries of North Africa and Western Europe.

The point is that the September leap of export was secured mostly by two large product groups  — grain (thanks to the highest ever crop) and metals (the production at Liepājas Metalurgs gathers space, export of metals and metalware in September in comparison with August rocketed by 41.8%).

In September most wheat and rye was exported to Algeria – for 44.5 million euro, to Saudi Arabia — for 9.4 million euro, to France - for 6.8 million euro and to Spain - for 5.1 million euro. For comparison: in fruitful September the sale of grain was 26 times greater than in “hungry” August. Nevertheless, the main flow of grain crops had been shipped in October, therefore the CSB would report before long on a new record from the Latvian grain growers.

If Latvian export rises beyond a billion benchmark once a year, then with import it is just another way round — merely twice in the last year (in January and February 2015) Latvia imported goods for less than 1 billion euro. So, in September import made up 1.08 billion euro. But, thanks to an unexpected harvest and Latvian farmers, who gathered it, the total foreign trade deficit was pulled down to the lowest in the last year figure — to 115.9 million euro. With luck the balance of Latvian foreign trade might for the first time in a long period change the minus sign to the plus one.

To whom the Latvian exporters sell their goods? By now traditional buyers – these are the EU countries (72.1% of the total export). The list of main countries, to which the goods under the label Made in Latvia are being shipped, has not changed for years - Lithuania (18.9% of the total volume of export), Estonia (10.7%), Germany (6.4%), Poland (5.7%).

The remarkable thing is that to all CIS countries put together the Latvian goods were sold one - half times less than to Lithuania only, and approximately as much as to Estonia. Whereas Russia remains the main buyer in CIS (merely 7% of the total Latvian export), we may say of the consequences of the economic warfare between EU and RF and of falling of purchasing power of the Russians to whom Latvian goods turn to be too expensive.

Nevertheless, some changes have been captured at the Eastern trade front line too — sales to CIS in September in comparison with August grew by 10.6%.

By the way, it may be noted that EU and CIS are not the only pebble on the beach. The Latvian exporters are quite successful in the cultivation of markets of third countries, sales to which in the space of a month grew by striking 75.6%. Eventually, in September 16.9% of the total Latvian export slid away the EU and CIS borders.

 

Candidate of Economic and Legal Sciences Arthur Eresko (Артур Ересько).