The share of exports of chemical products in January-April 2014 amounted to 4.9% for Russia against 5.2% in the same period last year.  Product values declined by 6.0%, whilst physical volumes increased by 8.3%. This increased volume of exports of organic chemical compounds comprised 11.8%, whilst products of inorganic chemistry fell by 13.9%.  The most significant decline was recorded in the export of synthetic rubber where both volumes and values were affected.

The trade deficit for chemical industry products came down slightly in the first four months in 2014, declining from $6.9 billion in 2013 to $6.3 billion.  This decline is attributable to a number of factors including static demand and a weaker than normal rouble.  In the face of sanctions the government has been keen to emphasise the value of import substitution in the chemical industry.  However, the central authorities do not full appreciate that the process of import substitution which cannot be achieved in the space of a few months or even years.  The Russian chemical industry is essentially faced by low competitiveness and a lack of quality and these are the main reasons why consumers have historically preferred imports.   

Despite the potential for the chemical industry in Russia, aside the success of major companies such as SIBUR, Nizhnekamskneftekhim, Kazanorgsintez, etc., progress has been slow.  Average annual sales of petrochemical products in Russia is $35-40 billion whilst in Germany it is $200 billion and in the US $425 billion in China up to $300 billion.  In industrialised countries, the share of the chemical industry in GDP is 9% but in Russia it only comprises 1.6%.  

Moreover, Russian per capita consumption of petrochemical products is about 90 kg per annum per capita, against 300 kg per annum in developed parts of the world.  More than 6,000 plastics converters are unable to supply the domestic market due to low quality and a lack of government support.  Until proper market economics are applied it is hard to see that picture changing. 

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