Source: Russian State Committee onstatistics (Goskomstat)

The specific share of the ferrous andnon-ferrous metals in the aggregate volume of the Russian export to outside theFSU amounted to 19.7% (against the 19.6% in 1997). Compared with 1997, the costof the export of the ferrous and non-ferrous metals reduced by 15%. The averagecontract prices reduced by 10% (by 13% on the cast iron, by 10% on theferro-alloys, by 17% on the semi-finished products of the carbon steel, by 22%on the copper, and by 5% on the nickel). The physical volume of the suppliesreduced by 5% (by 36% for the semi-finished products of the carbon steel and by5% for the nickel). The export of the cast iron and rolled metal remained onthe level of 1997 and the supplies of the aluminum and copper grew by3%.

The factors holding down the dynamic of theexport of the ferrous metals include the partial loss by the Russian exportersof the world markets for sale of their products and the anti-dumping measuresused by the governments of certain countries with the purpose to limit theimport of the Russian ferrous metals in their territories. Already 63limitations are, today, effective against the Russian firms; 43 of theselimitations are the anti-dumping ones.

In October 1998, the US International TradeCommission made the decision on the anti-dumping proceeding as of the suppliesof the hot-rolled metal from Russia; the proposal to charge the 107% to 199%anti-dumping duties is under discussion. The USA justify this with that Russiaexports its steel at the price equal to one third of the manufacture cost,which is against the laws of the international trade.

The supplies of the mechanical engineeringproducts increased by 1.7%; their share in the aggregate export grew up to 9.8%against the 8.1% of 1997.

The devaluation of the Ruble could havebecome a serious incentive for the development of the export. However, theimportant growth of the physical volumes of the export can hardly be expectedbecause of the limited throughput of the export pipelines, limited externaldemand under the world financial crisis, anti-dumping measures against theRussian producers, and complications with coming to the market of the goodsthat are not exported now or whose export is insignificant due to their lowcompetitiveness.

The devaluation of the Ruble after thefinancial crisis of Augustа1998 and the cutback of the purchasing capacity ofthe population due to the growth of the prices, in the second half of 1998, theimport reducedsignificantly. According to the Russian State Committee on statistics(Goskomstat), in 1998, the US$а45.8аbillion worth of the goods were imported inthe territory of the Russian Federation; this was by 17.9% less than in1997.

Fig. 2.35

Structure by goods of the Russian importfrom the countries outside CIS (%)

Source: Russian State Committee onstatistics (Goskomstat)

The food and the feedstock for itsproduction, and the machinery and equipment remain the largest items of importfrom the outside FSU; the respective shares of these groups of goods were about27% and 38%.

During 1998, the dynamic of the importunderwent the significant changes. The positive dynamic of the first half of1998 of the import from outside the CIS (growth by 15.9% compared with thefirst half of 1997) was replaced by its cutback in August and painful drop inSeptember 1998 (2.1‑fold reduction compared with September 1997 and by 42% comparedwith September 1997). In October 1998, the import reduced 2.6‑fold compared with October 1997and by 6% compared with September 1998. In November 1998, the import reduced2.3‑fold comparedwith November 1997 and by 6% compared with October 1998. In December 1998, ascompared with December 1997, the import supplies reduced by 59.3%; however,they saw the growth by 22.7% compared with November 1998. The largest cutbackin the last months of 1998 was seen in the group of the consumergoods.

Table 2.30

Dynamic of physical volumes of Russianimport of main goods

Source: Russian State Committee onstatistics (Goskomstat)

The estimated volume of the unorganizedtrade was US$а12.9аbillion, which was by 21.3% less than in 1997.

The balance of the foreign trade waspositive, US$а13.2аbillion (against the US$а14.1аbillion in 1997).

The unfavorable situation in the foreignmarkets and the reduction of the average contract prices as of the main itemsof the Russian feedstock export worsened the conditions of trade of Russia (inJanuary to August 1997, the export to import prices change ratio was 1.1; inJanuary to August 1998, it dropped down to 0.95).

In 1999, the situation in the foreign tradewill be worsening. It has become impossible to increase the volumes of theexport supplies. In certain branches of economy, the export quotas have reachedthe upper limit and become equal to 50% to 90% of the production volume. Theextreme wear of the fixed assets and lack of the investments for their updatinghinder the growth of production. The fuel and energy complex has alsopractically exhausted its capacities for the growth of the supplies to theforeign market due to the critical situation of its production basis;meanwhile, the unfavorable situation of the external markets forecast for theshort-term future makes problematic the support of the Russian export at thealready reached level.

The import will be reducing under theeffect of the consequences of the financial crisis, first of all, thedevaluation of the Ruble. Besides, the outlooks of the import will be highlydependent on how Russia will pay for the Eurobonds (in 1999, US$а4аbillion willbecome due). The RF Government has declared these payments mandatory andpayable in full. In the contrary, the foreign counter-agents will request fromthe Russian companies the pre-payment in cash for all the foreign exchangebargains; this will result in the collapse of the import.