Impacts within the Eurasian Customs Union: the case of Kazakhstan Independent researcher Food imports ban direct impact Problems with TIR convention execution for transit to Kazakhstan through Russian territory Stricter control for veterinary certification on imports from Kazakhstan Source: National Economic Chamber of Kazakhstan Atameken 1
Tenge to ruble exchange rate 5.50 5.00 4.50 4.00 3.50 3.00 KZT devaluation from 155 to 185 per USD 2.50 2.00 RUB devaluation from 34 to 69 per USD Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Source: National bank of Kazakhstan, Central bank of Russia Effects of exchange rate disproportion Shopping tours to Russia: cars, electronics, furniture and even bread and diapers Increased imports and oil price decline pushed domestic prices on industrial products down 120.0 100.0 80.0 60.0 40.0 20.0 0.0 Industry price index and KZT/RUB exchange rate Mar 14 May 14 Jul 14 Sep 14 Nov 14 Jan 15 Mar 15 May 15 6.00 5.00 4.00 3.00 2.00 1.00 0.00 KZT/RUB (right axis) Source: National bank of Kazakhstan, Statistics committee of Ministry of National Economy Industry price index Mar 2014 = 100 (left axis) 2
CU intra trade statistics issues Statistics and customs are not able to fully trace the intra CU trade Difference in statistics led to embarrassing situation on highest level meeting Trade flow: from Kazakhstan to Russia Rus data Kaz data KAZ/RUS Crops 256 342 134% Livestock 6 9 152% Processed 137 170 124% Other 5 266 5 285 100% Total 5 665 5 807 102% Source: UNComtrade database Example: 2013 trade statistics comparison (USD million): Trade flow: from Russia to Kazakhstan Rus data Kaz data KAZ/RUS Crops 61 79 129% Livestock 30 54 178% Processed 1 356 1 523 112% Other 15 771 16 029 102% Total 17 218 17 686 103% Change in trade between Russia and Kazakhstan Trade statistics, 5 months (USD million): Imports from Russia 2014 2015 2015/14 Crops 32 41 130% Livestock 16 16 101% Processed 532 433 81% Other 4 439 3 934 89% Total 5 018 4 424 88% Exports to Russia 2014 2015 2015/14 Crops 71 29 41% Livestock 4 5 131% Processed 66 39 58% Other 1 923 1 782 93% Total 2 063 1 855 90% Source: Statistics committee of Ministry of National Economy +20 kt of barley and 35 +kt of wheat 522 times beverage water contraction 150 kt wheat and 50 kt of barley 123 t beef and +900 t pigmeat 10 kt of milk, 8 kt flour, 8 kt cotton 3
Impacts on wheat sector (1) Heavy rains and snow during fall 2014 significantly downgraded wheat quality and volume of harvest Producers and millers started looking for high/normal quality wheat to blend own low quality wheat Source: http://www.time.kz/articles/zloba/2014/10/29/a bog ego znaet Impacts on wheat sector (2) Wheat imports from Russia: 60 000 tons officially 500 000 tons Millers association estimate Presumably, local wheat price were pushed down by Russian imports 290 270 250 230 210 190 170 150 Wheat price MY 2015/15 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Kazakhstan, Wheat, 3rd class (offer DAP, st. Saryagash) Russia, Wheat, milling quality (FOB offer, deep water ports) Source: APK Inform 4
Impacts on food processing industry Production, 1 st half of 2015 to 2014: poultry: 37% vegetable oil and margarine: 21% chocolate and confectionary: 20% overall food processing: 15% bordering zone was affected the most (example of Pavlodar) Source: National Economic Chamber of Kazakhstan Atameken Impacts on Kazakhstani economy: anecdotal evidence 151 billion rubles sold in Kazakhstan during October 2014 June 2015 (~2.8 USD bn) car imports from Russia: 79 332 in 2014 and 151 085 in first half of 2015 Employment in industry (~1 million jobs): 7 900 employees lost jobs in 313 companies (4.8 times more than in 2014) 7 112 moved to part time employment 2 051 pushed to unpaid vacation 2 039 pushed to half paid vacation Source: National Economic Chamber of Kazakhstan Atameken 5
Conclusions Food imports ban in Russia has little direct effect on Kazakhstani economy. Turbulence in Russian economy and controversial decision making in Kazakhstan decreased competitiveness of domestic producers. The effect is not reflected at full scale in trade statistics due to measurement issues and, presumably, unwillingness of statistics office to show the inconvenient picture. 6