Although Ukraine is a relatively small economy in global terms of trade, it is a mainstay in several commodities. The Russian invasion, in fact, will have a direct global impact on products such as sunflower seeds, corn, barley and wheat, where Ukraine has a significant comparative advantage.
International trade equaled 65% of GDP of Ukraine in 2020, with a total of 102.9 billion euros in goods exchanged with countries around the world. In 2014, Russia’s annexation of Crimea contributed to a 30% year-on-year drop in Ukraine’s trade value in 2015 (€75.6bn). Now Ukraine’s trade has been irreversibly disrupted since Russia’s full-scale invasion.
The war in Ukraine, moreover, threatens a greater disruption of supply chains already hit by the pandemic. Ukraine and Russia may account for only a small proportion of imports from major manufacturing nations like Germany and the US, but they are essential providers of raw materials and energy for many crucial supply chains.
The conflict is rapidly reshaping international relations and the trading partners of both countries. Four days after the invasion, Ukrainian President Zelensky requested Ukraine’s special admission to the EU, which would further strengthen Ukraine’s trade with member countries. Although it is impossible to determine the results of this conflict and its effects on international trade, it is likely that the countries that support Ukraine’s defense today will become Ukraine’s main trading partners in the future.
As geopolitical relations and international trade are being reshaped, and to give context to the situation, Visual Capitalist has created a detailed chart using IMF and UN Comtrade data to show Ukraine’s top trading partners and goods traded in 2020 .
You can consult the graph in its maximum resolution here.
Ukraine’s largest trading partner in 2020 was China, with trade value between the two countries reaching €15.3 billion, more than double the value of any other trading partner. Germany (€6.8 billion), Poland (€6.8 billion), and Russia (€6.3 billion) were Ukraine’s next three largest trading partners, and most of Ukraine’s trade with these countries is imports.
While most of Ukraine’s trade with major partners is made up of imports, trade with India and the Netherlands (Ukraine’s ninth and tenth trading partners, respectively) was more export-driven, with a share of exports exceed 70% of the total commercial value.
What goods are the most exported by Ukraine?
In 2020, Ukraine exported cereals worth more than €9 billion, a fifth of its total exports. It was the second largest exporter, behind the US. In fact, Ukraine’s exports were slightly higher than those of Russia. Iron and steel exports (€7 billion) were another important export product.
Ukraine has a comparative advantage in 24 basic products. Fourth largest exporter of corn worldwide (only behind the US, Argentina and Brazil), with 13% of the world’s total corn exports. Fourth largest exporter of barley, accounting for 12% of total world exports, behind France, Australia and Russia. And fifth largest exporter of wheat.
In addition, it is the world’s largest exporter of sunflower seeds, in which it specializes due to its favorable climate and fertile soil. In 2020, exported a value of €5.3 billion. This is more than double the commercial value of Russian exports (€2.5 billion), the second largest exporter, and significantly more than other leading countries such as Turkey, the Netherlands and Hungary.
Ukraine’s economy is still largely focused on its agricultural, forestry, and fishing industries. The sector has experienced growth in recent years. Even in 2020 it grew by 9%. When it comes to other export commodities, in 2020 Ukraine was the second largest exporter of iron o non-alloy steel (€2.2 billion) and the ninth largest exporter of ferroalloys (€600 million)
Which countries will be affected by the war?
China is Ukraine’s largest trading partner (by exports). In 2020, Ukraine exported €6.5 billion worth of goods to China, 14.5% of Ukraine’s total exports. China’s close ties to Russia may outweigh any dependency it has on Ukraine. Ukraine’s main imports include mineral fuels, nuclear reactors, vehicles and electrical machinery and equipment. Combined, these four commodities accounted for almost half (46%) of Ukraine’s total imports in 2020.
Economic powers such as China and the US, as well as neighboring economies, depend on Ukrainian exports. Russia, Belarus, Hungary, Lithuania depend on their mineral fuels. China, Germany, Poland, Italy and Russia also depend on their reactors nuclear, boilers and other machinery such as vehicles.
The move away from Russian dependency
Since its independence from the former USSR in 1991, Ukraine has steadily shifted towards Western trading partners, especially as conflicts with Russia intensified in the 2010s. After years of negotiations, Ukraine’s Association Agreement with the EU in 2014 after the Euromaidan protests facilitated free trade between the EU nations and Ukraine, reducing the country’s dependence on trade with Russia.
Keep in mind that Ukraine is one of the most important economic centers of the former Soviet Union and for a long time was the breadbasket of the USSR thanks to its fertile chernozem soil and agricultural industry.
Graphic: Visual Capitalist