Ukraine war blows huge hole in Thai exports to Russia
Thai exports to Russia fell 43.3% to $585.44 million in 2022 following Russia’s invasion of Ukraine a year ago. Hardest hit were exports of heavy vehicles, which dropped by 74.01%, according to the Department of International Trade (DITP).
It said the fall in exports is likely to continue in 2023.
The top 10 Thai exports to Russia were vehicles, tyres, machinery and mechanical parts, canned and processed fruits, machinery and mechanical components, refined oil, canned seafood, processed rubber, rice, and food seasoning.
“Cars, equipment, and components, which are high-value products and have always been Thailand's No 1 export product in the Russian market, account for 30% of all Thai exports to Russia," said Phusit Ratanakul Sereroengrit, director-general of the Department of International Trade Promotion.
However, following the invasion of Ukraine, the value of Thai auto exports to Russia has plummeted by 74.01% from 10.234.45 billion baht in 2021 to 2.659.96 billion baht in 2022.
Other Thai exports to Russia climbed significantly in 2022, however. Rice exports rose by 372.94%, refined oil exports by 62.77%, canned and processed seafood exports by 61.14%, and food seasoning exports by 41.33%.
The costs of international transportation to Russia by both air and sea has increased threefold since the start of the war.
Exporters to Russia have adjusted by switching shipments to the Russian port of Vladivostok, which lies to the northeast of Thailand.
After Russia was banned by Western sanctions from using the international money transfer system (Swift), exporters were unable to receive payment from Russian importers. Many Russian importers have since adjusted, some even opening accounts with foreign banks to transfer money internationally.
Meanwhile, since many Western brands are no longer available in Russia, the potential of Thai exports is growing, the DITP said.
Exports of automobile equipment and accessories are expected to rebound in 2023, particularly auto parts, which are in high demand in Russia.
However, with no end in sight for the war, the value of Thai exports to Russia will continue to fluctuate greatly, it added.
Thai exports to Russia whose value rose in 2022 – such as refined oil, canned and processed seafood and food seasoning – should continue on their positive trend, the DITP said.
