As we write this post, the war in Ukraine enters its seventh week. The appalling human costs and level of destruction resulting from the conflict are becoming clearer day by day. Refugees are crossing into neighboring countries by the hundreds of thousands to be resettled in the western world. Ever more severe sanctions are imposed on Russia and Russian economic interests across the globe. No doubt, the effects of the war will be felt by all of us to some extent. In this article, Find Your Spain takes a look at trade relations between Spain and Ukraine as well as Spain and Russia to learn more about how the ongoing conflict may affect the Spanish economy. What are some key products and services traded? How dependent is Spain on imports from Russia and Ukraine? And what sorts of products do Spanish companies export to the two warring nations?
Both Ukraine and Russia are often referred to as the world’s bread basket. These two countries are major producers and exporters of wheat, barley, corn, and seed oils. Russia’s territory of 17,098,246 km2, makes it the world’s largest country. Ukraine with its 603,628 km2 is significantly smaller than Russia but is nevertheless the second largest country in Europe and home to some of the world’s most fertile lands. If the current conflict continues much longer, Ukraine’s historically coveted agricultural land may remain fallow and Russia may need its food exports to feed its own population. The UN already warns of imminent hunger catastrophes in countries that rely on Ukrainian grains. It is estimated that some 400 million people worldwide depend on grains and other agricultural products from Ukraine. About 30 percent of all exports of wheat and barley come from Russian and Ukrainian producers and so do 76 percent of total sunflower oil exports.
Spain as a major producer and exporter of agricultural products is unlikely to be among the hardest hit nations. Spanish exports total approximately USD 300 billion (roughly 263 billion euro) per year and imports amount to USD 315 billion (about 276 billion euro) annually. Neither Ukraine nor Russia are major business partners for Spain: In 2020, imports from Ukraine constituted only about 0.4 percent of the total USD 315 billion annual imports figure while exports to Ukraine only reached about 0.2 percent of total Spanish exports. Imports to Spain from Russia and exports to that country constituted between 0.7 and 0.8 percent of the total value of Spain’s imports and exports, according to figures from the Observatory of Economic Complexity (OEC).
That being said, Spain receives a significant proportion of its imports of corn (38%), barley (25%), sunflower seeds and oil (67%), and wheat (10%) from Ukraine. These are all key agricultural products and access to them may well become restricted by the ongoing war between Russia and its neighbor Ukraine.
Turning to imports from Russia, Spain relies most heavily on oil and gas supplied by Russian companies. Around 11 percent of the country’s oil imports and nearly six percent of its gas imports are sourced from Russia, according to figures from The Elcano Royal Institute. The Spanish think-tank also notes that Spain is less dependent on imports of fertilizers for the agricultural sector than most other European countries. Moreover, the country hardly imports any gold, copper, diamonds, titanium or other metals and minerals that are key Russian exports.
However, some 1.3 million Russian tourists visit Spain every year. Their absence is expected to have a noticeable effect on Spain’s tourism industry, particularly in the most popular Russian tourist destinations in the northeastern regions, the Balearic and Canary Islands, and along the Mediterranean coast.
According to the Elcano Royal Institute there are no major Ukrainian or Russian business investments in Spain or any major Spanish investments in Ukraine or Russia although more than 30 Spanish-owned companies operate in Ukraine and in excess of 130 Spanish businesses were present in Russia until sanctions were introduced over the past few weeks. These Spanish-owned businesses mostly operate in the textiles, automotive, luxury goods, and tourism industries.
More on Spain’s trade with Ukraine
Spanish imports from Ukraine 2020
About 70% of goods that Spain imports from Ukraine are from the agricultural sector. Corn, wheat and seed oils (most importantly sunflower oil from the vast Ukrainian sunflower fields) comprise the highest-volume products in this category.
Of total Ukrainian exports to Spain, corn constituted 35.9 percent, seed oils 26.7 percent, and wheat 5.54 percent, according to figures from The Observatory of Economic Complexity. In addition, Ukraine exports minerals and other raw materials as well as some manufactured goods to Spain.
In 2020, the value of Ukraine’s export to Spain totaled about USD 1.28 billion (or some 1.21 billion euro).
Over the past 25, years exports from Ukraine to Spain increased at an annualized rate of more than 10 percent, from USD 116 million in 1995 to USD 1.28 billion in 2020 according to OEC website statistics.
Spanish exports to Ukraine 2020
Turning to Spain’s exports to Ukraine: the country’s export to Ukraine largely comprises manufactured consumer goods and business-to-business products. Spain has a more diversified economy than Ukraine and relies less on raw materials and natural resources.
The largest categories of products sold to Ukraine are passenger cars and other vehicles, including automotive parts which made up 13.8 percent of total exports in 2020, pesticides making up 4.74%, and non-fillet frozen fish totaling 4.13%.
Ukraine’s imports from Spain were valued at USD 637 million (558 million euro). Wines, other agricultural products (including sunflower seeds) as well as ceramics and women’s clothing were sold to Ukraine in 2020.
Over the past 25, years exports from Spain to Ukraine increased at an annualized rate of 11.1 percent, from USD 45.6 million in 1995 to USD 637 million in 2020.
Have a look at the images above and below to learn more. The Observatory of Economic Complexity is the source of the trade data images presented. Their website visualizes statistics and research findings in a way that makes complex data easy to understand. We encourage you to explore their website in greater detail. Click on the images and scroll down the page to where you find the graphics and let the cursor hover over specific areas (or click on them) to learn more.
Spain’s trade with Russia
Spanish imports from Russia 2020
Spain’s imports from Russia mainly comprise oil and gas products. In 2020, Russia’s exports to Spain had a total value of about USD 2.36 billion (2.07 billion euro). Other raw materials exported to Spain were minerals and metals.
The most important export products were refined petroleum (44%), crude petroleum (16.3%) and petroleum gas (11.3%). Along with other petroleum products, oil & gas sector products comprised about 75 percent of Russia’s exports to Spain. Other Russian exports to Spain are minerals and metals.
Over the past 25 years, Russian exports to Spain increased at an annualized rate of approximately 2.45 percent, from USD 1.29 billion in 1995 to USD 2.36 billion in 2020, according to data collected by OEC.
Spanish exports to Russia 2020
Spain’s exports to Russia are much more diversified than the imports from that country. Spain’s economy is less reliant on a few specific sectors and raw materials and relies more on value-added manufacturing than its trade counterpart.
Spanish exports to Russia amounted to USD 2.31 billion (or about 2.02 billion euro) in 2020 and included an assortment of manufactured products such as non-knit women’s suits (5.32% of total export value), cars (3.37%), and automotive parts (3.07%) followed by agricultural products, a category which includes wine.
Over the past 25 years, Spanish exports to Russia grew at an annualized rate of approximately 7.5 percent, from USD 379 million in 1995 to USD 2.31 billion in 2020, according to data collected by the OEC.
What’s ahead?
It is too early to predict the full impact of the war in Ukraine on Spain’s economy with any degree of certainty. Neither Russia nor Ukraine is a main Spanish trading partner, and Spain enjoys a diversified economy with a robust agricultural sector. The country’s greatest vulnerability may be found in its import of Russian oil and gas. Like consumers in many countries across the globe, Spaniards may see rising energy prices as a result of the conflict in Ukraine. Supermarket price hikes are also likely on key agricultural products imported from Ukraine, however Spanish farmers are well equipped to deliver substitute products for most goods.
If you would like to read more on this topic, we recommend an article entitled “The effects of the invasion of Ukraine on the Spanish economy” written by Enrique Feás, Senior Analyst at The Elcano Royal Institute. The think-tank explores how international events, outlook, and transformations affect Spanish society.
PS: If you are not familiar with the name Elcano, Juan Sebastián Elcano was a Basque navigator who in 1519 joined Magellan on the first around-the-world voyage. After Magellan was killed in the Philippines, Elcano took command of the last remaining ship and arrived in Seville in 1522 with only 18 of the original 285 crew members.
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