Russia-Ukraine war leads to fall in Estonia's exports, price volatility
Last year was a difficult year for Estonian exports with Russia's war in Ukraine bringing uncertainty to many businesses.
Estonia's exports of goods at current prices remained at the same level and imports increased by 12 percent compared with November 2021, data from Statistics Estonia published on Monday shows.
"Imports from EU countries increased by 21 percent, while imports from non-EU countries decreased by 14 percent. The decline was significantly influenced by a drop in imports of goods and raw materials from Russia and Belarus," said Evelin Puura, leading analyst at Statistics Estonia.
One company that faced problems last year was the scrap metal company Kuusakoski which described the year as "satisfactory" to "Aktuaalne kaamera".
Price fluctuations were unprecedentedly large which led to a fall in exports. The company's main export market is Turkey.
Board member Toomas Kollamaa said prices were almost €400 a tonne in March and April but were €200 by the end of the year.
"Export volumes, I believe, could be anywhere between 15-20 percent lower than in 2021. It is always the case with scrap metal that the biggest motivator for people is the price," he said.
At the end of the year, heavy snowfall increased demand, which pushed prices back up. The company hopes exports recover and prices stabilize at the start of this year.
"In December, this price started to improve slightly. Today, as we have started the second week of January, we can say that the price of black metal is going up," said Kollamaa.
Bank of Estonia economist Mari Rell said foreign exports and imports started to fall in the summer.
"This was influenced by the contraction in external demand, which actually remains weak at the beginning of this year," she said.
The war in Ukraine led to shortages of raw materials that have severely impacted the manufacturing sector causing a slowdown in production.
"This also means that it could affect the labor market, i.e. reduce the number of workers," Rell said. "The beginning of this year is a critical one, but we are forecasting that already in the second half of this year, external demand should gradually start to recover."
Some companies have adapted after previous crises and created buffers in better times, she said.
And some companies were also successful last year, "Aktuaalne kaamera" reported.
International energy and automation technology group ABB Estonia board member Leho Kuusk said: "If we compare November-December of last year with November-December of the year before, the export volume actually increased by a full 45 percent."
The company may also expand and take on new staff members in the near future.
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Editor: Barbara Oja, Helen Wright
Source: Aktuaalne kaamera