Money deposits on accounts of agricultural enterprises increased 2.3 times during the year. Given a substantial and growing shadow turnover in the farm sector, money returns of farms are even larger. This means that agricultural producers will have smaller seasonal credit requirements in the coming season, the amount of various commodity credits to agrifood sector will decrease and consequently the next year's financial performance will be better. As we repeatedly pointed out, the pricing in barter transactions, commodity credits, mutual settlements is usually not to the benefit of agricultural producers, thus draining resources from agriculture. The availability of own money funds will help farms to avoid such detrimental transactions in the coming season.
The trend of loans borrowed and lent by agricultural enterprises is also positive: as of October 1 the latter grew twice faster than the former. The debts of buyers to agricultural producers increase most rapidly which is natural given larger marketing volumes.
It was Iraq which until recently has been the major factor of uncertainty in the world oil market. On November 20, 1999, a regular half-year stage of “Oil in exchange of food” UN- Iraqi agreement was over. Trying to blackmail developed countries with high oil prices thus struggling for a complete lifting of the sanctions, Iraq stopped its oil export that immediately resulted in the discontinuation of the fall in oil prices, which had started in October, and in the renewal of their growth.
It is Russia, which benefits greatly from the discontinuation of the Iraqi export. The Iraqi oil by its quantity is comparable to the Russian Urals, while the other exporters supply oil of a higher quality. It is very hard to re-profile oil refineries which were built to refine low- quality oil. That is why upon discontinuation of the Iraqi oil export, the Russian oil enjoys a great demand, and it is quoted at the level of Brent- and sometimes higher, while in the normal circumstances Urals is at USD 1- 1.5/barrel cheaper than Brent.
The average world prices in November of the respective year
Oil (Brent), USD/barrel
Natural gas, USD/1 mln. BTE
Source: calculated basing on the data of the London metal Exchange, New York Mercantile Exchange
In November 1999, Russia’s foreign trade turnover made up USD 11.0 and at 24.5% exceeded the index of November 1998; exports grew by 25.3% and broke the record value over the last two years USD 7.4 bln. Imports also showed substantial growth relative to November 1998- at 22.8% - and made up USD 3.6 bln.
However, during the 11 months 1999 vs. the respective index of the prior year. The value volume of the Russian exports dropped by 17% (USD 101.6 bln.), mostly because of the fall in the value volume of imports (at 33.8%), which made up USD 36.8 bln. That was caused by the Rb. depreciation and downfall in the populace’s real purchasing power. However, during 1999 the growth rate of Rb. exchange rate sometimes lagged behind the domestic price growth rate, which entailed the strengthening of the national currency. That generated some renewal of import operations. Since September 1999, one has noted some growth in the importation of goods compared with the respective month of 1998.
Main indices of the Russian foreign trade turnover
Between January to September 1999, exports fell by 3.1% compared with their respective period of the prior year and made up USD 64.8 bln. That can be attributed to the fact that in the Ist half 1999 export prices were significantly lower than the respective prices in 1998, while the growth in the physical volume of exportation resulting from the Rb. depreciation and the growth in export pries during the IInd half year only compensated for the initial downfall in the value volume of export supplies.
On January 24- 25, Moscow hosted the CIS leader summit. They undertake the regular attempt to implement the Agreement on free trade zone that thus far has not been ratified by parliaments of some CIS countries, including Russia. That is related to the awareness of the fact that because of the Agreement, the losses of Federal budget’s from the discontinuation of receipt of customs payments might have reached several billion USD annually. The CIS leaders approved the draft Agreement on multilateral cooperation between CIS states for the forthcoming five years. At the same time, Russia proceeded with bilateral negotiations regarding paying off the debts for the Russian supplies of energy sources to the neighboring countries.
Between January through November 1999 Russia’s turnover with the CIS countries made up USD 13.9 bln. And fell by 27.4% relative to its respective index of the prior year. However, in late 1999, the dynamics of mutual supplies gained a positive momentum. Thus, in November the goods turnover grew by 4.4% vs. November 1998 and made up USD 2.2 bln. Nonetheless, according to preliminary data of Goskomstat, for the whole 1999 the volume of Russia- CIS trade should make up USD 22.6 bln., or at 22% down than in 1998, including Russian exports accounted for USD 12.4 bln. (Down at 19%), while imports made up USD 10.2 bln. (down at 25%).
Since January 1, 2000 RF has abolished the customs regime of processing goods under customs control in the course of processing raw materials for the production of primary aluminum or aluminum articles. At present the raw materials are processed in the conditions of the regime of processing in the customs territory which provides for placement of funds, which are designated for paying VAT and customs duties, on a special deposit account, with the reimbursement of such funds in the course of importation of the raw materials.
Since January 1, Russia has also abolished the domestic tolling regime, under which the Russian raw materials supplied for further processing were exempted from VAT and customs duties.
In January 2000, the representatives of the RF Ministry of Trade and the US Trade Department signed an agreement on the cease of anti-dumping investigation against some kinds of Russian cold- rolled steel products. In compliance with the Agreement, since 2000 and until 20005 all Russian companies may supply to the US market no more than 340 Thous.t. of cold- rolled steel (in 1998, they supplied to the US 6,480 Thous.t.).
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