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Ukraine is a country in the geographical center of Europe with a population of 45 million inhabitants. This territory with a huge market is potentially attractive for almost any business. From the time of its independence to the present, Ukraine has continuously developed trade relations with many countries of the world.
Ukraine is attractive to foreign companies because of the following reasons.
According to the State Statistics Service, in 2017 Ukraine exported its goods and services to 223 countries for a total amount of $ 52.3 billion. 40.5% of this export volume was sent to the countries of the European Union. In 2018, the European Union also remains Ukraine’s largest trading partner. In addition to the EU, in 2018 Ukraine most of all sold its goods to Russia, Turkey, India, China, Egypt, Belarus.
The main Ukrainian export groups of goods are products of the agro-industrial complex and food industry. In total exports, these products account for about 37%. In the second place are the products of the metallurgical complex, which make up 27%, in the third place – engineering products – 11%. In addition, Ukrainian manufacturers export mineral products, chemical products, wood and pulp, light industry products.
Top 10 key products that Ukraine exported to foreign markets in the first 9 months of 2018 (according to the analytical department of the Ukrainian Food Export Board (UFEB):
Poultry meat exports grew by 29% compared with the previous year, chocolate – by 21%. Sales volumes of soybean oil abroad increased by 18%, seeds – by 15%, wheat – by 6%.
The total volume of goods from the TOP-10, which is 85% of the total value of exported goods, is the food and agricultural products. In addition, popular products of Ukrainian exports are pork, salo and honey. In the services sector IT services are the most popular export destination. The share of this industry in the total exports of services in 2017 amounted to 25%.
As noted in UFEB, the main export products are still raw materials. However, despite this, many Ukrainian experts argue that Ukraine has great potential for selling finished products for export, since many Ukrainian goods are of high quality and are competitive in international markets because of their low cost.
The volume of imports of goods and services in Ukraine in 2017 amounted to 54.95 billion dollars, which is 23% higher than in the previous year. In 2018 we also observed an increase in imports compared with 2017.
TOP 10 of products imported by Ukraine in the first half of 2018 is the following (according to the Ukrainian Analytical Center of the UAC)
Top 10 of countries from which Ukraine imported goods in 2017:
In Italy, we buy engineering products, pharmaceuticals, as well as plastics and polymers. In France – mineral products, chemistry and ground transportation, except for railways. In the USA – coal and other mineral products, automobiles and products of machine industry.
Ukraine imports oil products, small amount of fertilizers, as well as vehicles from Belarus. Poland and Germany sell to Ukraine Russian gas and other mineral products, as well as products of machine industry, electrical equipment and various ground transportation. Plastics and polymers, pharmaceuticals and chemistry are also imported from Germany.
Imports from China are diverse, but are based on electrical equipment, products of machine industry, and also partly on plastics and polymers.
The basis of imports from the Russian Federation is mineral products, fertilizers, engineering products.
We see that most of all Ukraine buys energy. However, most of the imported goods from the TOP10 are high value added finished products. While exported goods are mostly raw materials. At the moment, this situation in foreign trade is a common feature of the Ukrainian economy. However, in view of the fact that we can see the increase in machinery and equipment imports, we can assume that this will give impetus to the modernization of Ukrainian enterprises, improving the quality of finished goods and, consequently, increasing exports of such goods.