In previous publications we have written about the exchange rate fluctuations and that inflation of the dram is good for domestic producers and exporters. We have also written that most of our export is targeted at European countries, thus in fact the exchange rate of Euro should have been more important in this process than dollar. What do we generally export and what are the main countries for export? The conclusions are very interesting.
The national statistics service publishes the foreign trade information according to separate countries. This information does not show specifically which countries import from Armenia and how much. In the beginning of the year this information gap was filled by the ministry of state revenue. The customs department of the ministry published the foreign trade indicators according to products and countries of export. For each country they write the specific types of the products that were circulated. If one wants to get information about a specific country, it is possible to see the structure of trade between that country and Armenia. However, if one wants to have comprehensive information showing the proportions of a specific type of product in export, it is very hard to get that information from the document that contains several thousand lines. For example, if you want to know which country is the largest consumer of mineral water, you have to take out the numbers of consumption for every country and calculate the results. This takes a lot of time.
We have tried to compare the most important products of export. We have taken the list of exported products with higher customs rates in 2011 and made a list of the buyers of 37 types of products made in Armenia. The value of those 37 types of products included in that list makes 1.22 billion dollars (the whole export was 1.33 billion). This list gives a general picture about the export with small exceptions.
For example, one can easily see what we sell and which countries are the buyers. For example, the list shows that the entire capacity of cement export was bought by Georgia in 2011. The readers of this article can find the types of products they are interested in this list, however below we are bringing several facts:
– The export structure according to different and separate types of products is not diversified as we mainly export mining and raw materials. The list also shows that the countries of export are not diversified either. This means that for the main types of products of export we have one or two buyers. For example, molybdenum (not the raw material) produced in 2011 was entirely bought by Germany (15.6 mln dollars), zinc was bought by Korea, electricity and animals were bought by Iran, gold and diamond were bought by Canada, and the only buyer for cement was Georgia. According to the information, in 2011 Bulgaria was one of the main countries where Armenia exported products, but the export mainly consisted of copper mining stones and materials. In a word, every exporter has found a customer and is working in that direction only.
– Our government always speaks about supporting the development of domestic pharmaceutical production. Pharmaceutical companies compliment to those announcements and say that their production complies with international standards and they export to European countries. However, the information reported by the customs service shows that Armenian pharmaceutical products have not been exported to European countries. The main buyers of those products were Georgia, Russia, Uzbekistan and other CIS countries. This means that the European market for pharmaceutical products was close for us.
– When speaking of Europe we always separate France as a window to Europe for us. However, the statistics of the trade shows that Germany was more important during the year. In 2011 the export value to Germany was 158 mln dollars, and to France – 9.6mln. Germany imported 12 types of products with higher customs value, and France – only 5. Armenia mainly exports to France wires and fish. We should be more curious to both of these countries as usually politics and economics are closely connected.
There are funny data as well. It turns out that a large part of Armenia’s export is sent to Benin, which is a country with 308,000 population and was called the British Honduras. Benin is buying black metal and copper scraps. Metal scraps continue flowing to Iran as well. In 2009 the export of metals to our neighboring country was 80.227 tons with a customs value of 4 million dollars (5 cents per kilo).
According to the export statistics, in 2011 Armenia exported inner flame engine with spark burning function with a value of 4.5 million dollars. This is a very interesting indicator, which could be used by the government as a change in the export composition. However, only two engines were exported. One of them was sold to Spain at $3.5 mln, and the other one to Russia at $1,100.
The funniest data we have found in the report concerns vehicles. It turns out that in 2011 Armenia exported 685 cars with a customs value of $5.4 million. It is very strange that we have even exported three cars to Germany with a customs value of $107.1k dollars. Maybe the Germans were interested in our ERAZ cars, but hardly they would pay $35k for those cars.
Georgia is in the first place for export of cars. It turns out that 573 cars out of 685 exported cars have gone to Georgia. This can be explained with several decisions of our government during last year (for example, the compulsory customs clearance condition), but we will leave this issue for readers to think about. We believe that if you think long, you will come to certain conclusions.